Finance Committee -- Public Works Subcommittee (Papers) 20 Jan 99

For discussion
on 20 January 1999

PWSC(98-99)60

ITEM FOR PUBLIC WORKS SUBCOMMITTEE OF FINANCE COMMITTEE

HEAD 711 - HOUSING
Civil Engineering - Land development
B567CL - Site formation for redevelopment of Hung Hom Estate phase 2

Members are invited to recommend to Finance Committee the upgrading of B567CL, entitled "Site formation for redevelopment of Hung Hom Estate phase 2", to Category A at an estimated cost of $38.6 million in money-of-the-day prices. PROBLEM

We need to carry out site formation works to form a platform for the redevelopment of Hung Hom Estate phase 2.

PROPOSAL

2. The Director of Civil Engineering, with the support of the Secretary for Housing, proposes to upgrade B567CL to Category A at an estimated cost of $38.6 million in money-of-the-day (MOD) prices to carry out the site formation works for the redevelopment of Hung Hom Estate phase 2.

PROJECT SCOPE AND NATURE

3. The scope of the project comprises -

formation of housing platform including the removal of an existing knoll; and
construction of associated drainage works.

JUSTIFICATION

4.In 1989, the Working Group on Housing Sites approved the inclusion of the existing knoll adjacent to Hung Hom Estate into its redevelopment plans. The Planning Brief for Hung Hom Estate redevelopment was approved by the then Development Progress Committee in June 1994.

5.According to the Public Housing Development Programme, the redevelopment of Hung Hom Estate phase 2 is to be completed in September 2003 with a population intake of 2,600. It is necessary to commence the site formation works in June 1999 for completion by December 2000 so as to enable Housing Department to complete the building works as programmed.

6.The site of the existing knoll and the adjacent site of the existing public rental housing blocks are to be formed as an integral site for the housing redevelopment of Hung Hom Estate Phase 2. In order to expedite the development process and provide a more co-ordinated approach, we will entrust the formation works in respect of the site of the existing knoll to the Director of Housing (D of H). Since the planning and design of the housing layout will still be at a preliminary stage at the time of finalization of the design of the site formation and associated drainage works, entrusting the site formation works to D of H would give him greater flexibility to make any necessary adjustments to the site formation/drainage works to suit the evolution of the housing layout design. This will also minimize possible interfacing problems between the removal of the existing knoll under this project and the demolition of the existing housing blocks by the Housing Authority under another project, which will proceed simultaneously.

FINANCIAL IMPLICATIONS

7. We estimate the capital cost of the project to be $38.6 million in MOD prices (see paragraph 8 below), made up as follows-

	$ million
(a) Formation of housing platform	28.2
(b) Drainage construction	0.7
(c) Housing Authority on-cost¹	0.6
(d) Environmental mitigation measures	1.1
(e) Contingencies	2.2
	_____
Sub-total	32.8	(at December 1997 prices)
(f)Provision for price adjustment	5.8
	_____
Total	38.6	(in MOD prices)
	_____

8. Subject to approval, we will phase the expenditure as follows-

Year	$ million (Dec. 1997)	Price adjustment factor	$ million (MOD)
1999 - 2000	13.1	1.12890	14.8
2000 - 2001	16.4	1.19663	19.6
2001 - 2002	3.3	1.26843	4.2
	______		______
	32.8		38.6
	______		______

9. We have derived the MOD prices on the basis of the Government's forecast of trend labour and construction prices for the period between 1999 and 2002. We will tender the site formation works under a standard remeasurement contract, as the project involves earthworks, the quantities of which are subject to variation depending on actual ground conditions. The contract for site formation works will not provide for price adjustments as the contract period will not exceed 21 months.

10. The proposed site formation works have no recurrent financial implications.

PUBLIC CONSULTATION

11. We consulted the Works & Development Committee of Kowloon City Provisional District Board on the proposed works on 12 November 1998. While indicating their support to the proposal, members of the committee expressed concern over the environmental and traffic implications and requested that adequate control be exercised to minimise nuisances caused to nearby residents.

ENVIRONMENTAL IMPLICATIONS

12. The consultants of D of H have completed the Preliminary Environmental Review which sets out detailed measures to keep the noise and air quality within acceptable standards during the period of site formation work. These mitigation measures have been agreed by the Director of Environmental Protection. We have included $1.1 million in the project estimates for the implementation of these environmental mitigation measures. The project will have no long term environmental impact.

LAND ACQUISITION

13. The project does not require land acquisition. A small area, within the site, has been allocated to Director of Urban Services under a temporary land allocation. This arrangement can be terminated by giving 3 months' advance notice.

BACKGROUND INFORMATION

14. We upgraded this project to Category B in December 1998.

15. We plan to start the site formation works in June 1999 for completion in December 2000.

-------------------------------------------

Housing Bureau
January 1999

(PWSC0060/WIN3)

¹This is the cost to be charged by Housing Authority for the comprehensive management, design and supervision of this government reimbursable site formation project.