For discussion FCR(95-96)122
on 9 February 1996

ITEM FOR FINANCE COMMITTEE

LOTTERIES FUND
HEAD 341 - NON-RECURRENT GRANTS
Subhead 182 Nursing homes

Members are invited to approve a grant of $128.96 million in money-of-the-day prices to the Pok Oi Hospital Board for constructing, furnishing and equipping a nursing home for the elderly.



PROBLEM

There is a need for more nursing homes for the elderly to fill a service gap between care-and-attention homes and infirmaries.

PROPOSAL

2. The Director of Health (DH) proposes to grant $128.96 million in money-of-the-day (MOD) prices from the Lotteries Fund to the Pok Oi Hospital Board (POHB) to construct, furnish and equip a nursing home in Tuen Mun.

Project scope and nature

3. The proposed home will be a seven-storey building with a gross floor area of 6 800 square metres located at a site in Tuen Mun. It will provide 200 residential care places for the elderly in need of regular medical, nursing and personal care. A site plan is at Enclosure 1.

JUSTIFICATION

4. There is a considerable number of elderly people who, because of their poor health condition, cannot be adequately cared for in care-and-attention homes but do not require the intensive medical and nursing care provided in infirmaries. We are introducing a new nursing home service to fill this gap. These nursing homes will take in clients from care-and-attention homes who require a higher level of nursing care, and clients from infirmaries who require less intensive medical and nursing care. The target clients served by nursing homes are set out at Enclosure 2.

5. We have pledged to construct six nursing homes to provide a total of 1 400 beds by 1997. Members have so far approved five nursing home projects (providing 1 200 beds) financed by the Lotteries Fund. Details of these projects are set out at Enclosure 3. The project under consideration is the sixth nursing home which will provide the remaining 200 beds.

6. The Social Welfare Advisory Committee supports the use of the Lotteries Fund to finance the construction of nursing homes.

FINANCIAL IMPLICATIONS

7. On the basis of the design proposed by POHB (which will operate the proposed home) and accepted by the Director of Architectural Services and DH, the estimated capital cost of the project is $128.96 million in MOD prices, made up as follows -


$ million

(a) Building works

46.87

(b) Building services

33.33

(c) Drainage and external works

3.97

(d) Professional fees

10.58

(e) Contingencies

4.00

(f) Furniture and equipment

13.00

Sub-total (at December 1995 prices)

111.75

(g) Inflation allowance

17.21

Total cost in MOD prices

128.96

8. The estimated cashflow is as follows -

Year $ million
(December 1995)
Price
adjustment
factor
$ million
(MOD)

1995-96

3.30

1.00000

3.30

1996-97

27.02

1.07500

29.05

1997-98

78.77

1.18250

93.15

1998-99

2.66

1.30075

3.46

Total

111.75


128.96

9. We derive the MOD estimate on the basis of the Government’s forecasts of trend labour and construction prices over the period 1996 to 1999. We shall tender the piling and superstructure works under two fixed-price lump-sum contracts. We adopt a lump-sum approach as we can define clearly the scope of the works in advance, leaving little room for uncertainty.

10. Based on the current programme of work, the nursing home will be completed by end-1997 and will come into operation in the first quarter of 1998. The estimated annual operating cost (excluding rates) of the nursing home is $26.097 million at 1995-96 price level, made up as follows -


$ million

Personal emoluments

21.601

Other charges

4.496

Total

26.097

DH will subvent the operation of the nursing home net of the income from fees.

ENVIRONMENTAL IMPLICATIONS

11. The Director of Environmental Protection conducted an environmental review in July 1995 and concluded that, with the provision of central air-conditioning to the nursing home, traffic noise from the nearby roads will not become a nuisance. For short-term construction impact, POHB will require the contractor to implement standard pollution control measures to control the dust, noise and run-off nuisance during construction.

Land acquisition

12. The District Lands Officer (Tuen Mun) approved the private treaty grant to POHB for the proposed nursing home on 27 July 1995.

Public consultation

13. The project has the support of the Tuen Mun District Board.

BACKGROUND INFORMATION

14. Under section 6(4) of the Government Lotteries Ordinance, the Financial Secretary has the authority to approve payments from the Lotteries Fund to finance the development of welfare services. However, as a matter of practice, he would seek Members’ approval for any proposal that has recurrent financial implications exceeding $8 million a year. The proposal under consideration falls into this category.

Health and Welfare Branch
January 1996


Enclosure 2 to FCR(95-96)122

Proposed Admission Criteria for Nursing Homes

To qualify for nursing home care, applicants should be elderly persons -

  1. with a medical condition(s) which is stabilised but which has nevertheless caused functional disability and loss of personal care ability;
  2. whose medical conditions require regular medical and nursing care; and
  3. who do not have any uncontrollable psychiatric behaviour, such as a tendency to violence, self-destruction/self-injury or disruptive behaviour.

Priority will be accorded to those with low income, lack of family support and/or poor housing conditions.


Enclosure 3 to FCR(95-96)122

Nursing Home Projects Approved by Finance Committee (FC)

Date of approval
by FC
Location of the
nursing home
Capacity
(beds)
Target
completion date

3 March 1995

Sheung Shui (Po Ping Road)

200

Second quarter 1997

14 July 1995

Wong Tai Sin (between Po Kong Village Road and Choi Hung Road)

250

Fourth quarter 1997

14 July 1995

Tseung Kwan O (Po Lam Road)

250

Fourth quarter 1997

28 July 1995

Kowloon Bay (Kai Yan Street)

200

Second quarter 1998

1 December 1995

Tsuen Wan (Yan Chai Street)

300

Fourth quarter 1997

Total

1 200



Last Updated on 2 December 1998