on 11 November 1998
ITEM FOR PUBLIC WORKS SUBCOMMITTEE OF FINANCE COMMITTEE
HEAD 708 - CAPITAL SUBVENTIONS AND MAJOR SYSTEMS AND EQUIPMENT
The Chinese University of Hong Kong
26EF - Science building complex, phase I
Members are invited to recommend to Finance Committee to increase the approved project estimate of 26EF from $62,080,000 by $19,247,000 to $81,327,000 in money-of-the-day prices.PROBLEM
The approved project estimate of 26EF is insufficient for the works under the project.PROPOSAL
2. The Secretary-General, University Grants Committee (SG, UGC), on the advice of the Director of Architectural Services (D Arch S) as Technical Advisor to the University Grants Committee (UGC), and with the support of the Secretary for Education and Manpower, proposes to increase the approved project estimate of 26EF from $62,080,000 by $19,247,000 to $81,327,000 in money-of-the-day (MOD) prices.
PROJECT SCOPE AND NATURE
3. 26EF is the phase I construction of a science building complex for the Chinese University of Hong Kong (CUHK). The project has a construction floor area of 7 079 square metres. Upon completion, it will provide a net usable area of 4 000 square metres in an eight-storey building for use as laboratories, lecture theatres, classrooms and offices.
4. The approved project estimate for 26EF is $62,080,000 in June 1992 prices. As a result of inflation over the years, this is insufficient to meet the costs of the works, professional fees and furniture and equipment required to complete the project. Details of the shortfall in provision are as follows -
|Reasons for additional requirements||$*000|
|(a) Price increases in construction works and furniture and equipment from the date of the preparation of original cost estimates to the date of the acceptance of tenders for the various contracts||17,394||90.4
|(b) Corresponding increase in professional fees as a result of price increases in construction works||1,853||9.6
A more detailed comparison of the approved project estimate for 26EF and the proposed revision, together with explanations for the deviations, is at the Enclosure
5. Subject to Members' approval, we will phase the expenditure as follows -
|Up to 31 March 1998||58,510
|1998 - 99||18,017
|1999 - 2000||4,800
6. The proposed increase in project estimate will not give rise to any additional annually recurrent expenditure.
7. We do not consider it necessary to consult the public for the proposed increase in project estimate.
8. The project has no long term adverse environmental impact and the proposed increase in project estimate will not give rise to any additional impact.
9. The proposal does not require additional land acquisition.
10. 26EF is part of CUHK's development programme aimed at providing adequate academic facilities for its approved students contingent. The Finance Committee of the Legislative Council approved funding of $1,160,000 in March 1992 for site investigation and preliminary design work, and in May 1993, revised the total project estimate to $62,080,000 at June 1992 prices for the construction phase (FCR(93-94)19).
11. Site preparation and slope improvement works under the project commenced in late 1995. CUHK invited tenders for the superstructure construction works in February 1996 and awarded the main contract in May 1996. The construction works are now nearing completion.
12. Since 1 April 1995, project estimates for all newly approved UGC-funded capital works projects have been expressed in MOD prices to take into account anticipated inflation from the time the project estimates are approved to the acceptance of the main tenders for the works. UGC-funded institutions are required to complete projects within the approved project estimates where these are expressed in MOD prices.
13. Nevertheless, under existing arrangements, UGC-funded institutions may apply for funds from Government to cover additional expenditure on projects approved prior to April 1995 (from which date project estimates were expressed in MOD prices). Such funding shall not exceed the increase in tender price indices from the date the project estimate was approved and the dates the main tenders were received. In the same spirit, the approved project estimates will be reduced where there is a corresponding fall in tender price indices.
Education and Manpower Bureau
Enclosure to PWSC(98-99)40
26EF - Science building complex, phase I, CUHK
The table below shows the difference between the approved project estimate and the proposed revised project estimate for 26EF -
|(a) Site investigation and development works||7,200||9,446
|(b) Building works||24,950
|(c) Building services works
|(d) Professional fees
|(e) Furniture and equipment
|(at June 1992 prices)||81,327|
|(in MOD prices)||19,247|
2. As regards (a) above, the increase of $2,246,000 is due to upward movement in the tender price index (TPI) for building works from the period when the original budget was fixed in the second quarter of 1992 to the period when tenders for the various works were received between the second quarter of 1995 and the first quarter of 1996 (TPI for building works increased from 548 to 712 and 772 respectively).
3. As regards (b) above, the increase of $10,199,000 is due to an upward movement in the TPI for building works from the period when the original budget was fixed in the second quarter of 1992 to the period when tenders for the various contract/subcontracts were received in the first quarter of 1996 (TPI for building works increased from 548 to 772 over this period).
4. As regards (c) above, the increase of $2,996,000 is due to an upward movement in the TPI for building services works from the period when the original budget was fixed in the second quarter of 1992 to the period when tenders for the various contract/subcontracts were received between the first and third quarters of 1996 (TPI for building services works increased from 111 to 127 and 129 respectively).
5. As regards (d) above, the increase of $1,853,000 reflects the increase in professional fees as a result of the increase in the cost of construction works.
6. As regards (e) above, the increase of $1,953,000 represents the inflation adjustment (37.9%) for furniture and equipment since the original budget was fixed in the second quarter of 1992.