For discussion FCR(95-96)107
on 12 January 1996

ITEM FOR FINANCE COMMITTEE

HEAD 100 - MARINE DEPARTMENT
Subhead 603 Plant, vehicles and equipment

Members are invited to approve a commitment of $50.4 million for procuring six purpose-built vessels to improve the marine refuse scavenging and collection service.



PROBLEM

The existing refuse scavenging fleet of the Marine Department (MD) needs to be expanded to adequately meet and improve the marine refuse collection service.

PROPOSAL

2. The Director of Marine (D of M) proposes to procure six purpose-built vessels to expand and modernise the scavenging service at a capital cost of $50.4 million.

JUSTIFICATION

3. MD is responsible for scavenging and collecting refuse at sea, including waste from ocean-going vessels moored in the harbour and from boats in the typhoon shelters. With a combined fleet of seven government and 23 contract vessels, MD’s scavenging service covers mainly the central harbour and waters around some outlying areas in Sai Kung, Tai Po and Cheung Chau. In 1993 and 1994, MD collected 4 872 tonnes and 5 413 tonnes of floating refuse respectively.

4. MD operates the service through five scavenging teams. Each team normally comprises one or two government vessels and three or four contract vessels. The government vessels, which are commonly known as waterwitches, are special boats equipped with a hydraulic scavenging scoop stretching out to lift floating refuse at sea. These waterwitches do not have any container on board to carry the refuse and therefore have to work in parallel with the contract vessels, which are motorised working boats or sampans basically used for refuse transfer purpose. When the waterwitches pick up refuse from the sea, they will load the refuse onto the working boats which will in turn carry the waste in bulk to the marine refuse collection points (MRCPs) for disposal. This mode of operation is inefficient and unsatisfactory. It also cannot provide an efficient refuse scavenging service in congested waters and typhoon shelters. As an alternative, the department can only provide a manually operated scavenging service in these areas using motorised sampans.

5. To improve the marine refuse scavenging service in Hong Kong waters, D of M considers it necessary to expand and equip the government scavenging fleet with modern vessels purpose-built to meet the local requirements. The proposed vessel is a purpose-built 20 metre long catamaran (twin hull) type vessel with a speed of 13 knots. The vessel will be fitted with an improved mechanical refuse collection system for collecting floating refuse as it sails along. The twin hull design allows floating refuse to flow between the hulls whereby a conveyor installed underneath the hulls will collect and lift the trapped refuse out of water and deposit them in containers on the deck. The new vessel will have a carrying capacity of 15 cubic metres (or five tonnes). The obvious advantage of this new type of vessel is that it can operate independently for scavenging, collection and transfer purposes without a working boat. Moreover, to cater for refuse collection needs at littoral areas, two of the six vessels will be provided with a dinghy with an outboard engine to operate in those congested waters.

6. D of M envisages that the expanded fleet will enable his department to widen the coverage of refuse scavenging service in Hong Kong waters and to visit black spots of floating refuse more frequently. When the new vessels are in operation, D of M will deploy two of them to work in the central harbour and the other four to cover Tolo Harbour and coastal waters around Hong Kong South, Sai Kung and Tuen Mun. The existing fleet will continue to provide services in support of the new vessels. D of M anticipates that the provision of six additional purpose-built vessels would increase the quantity of floating refuse collected by about 34%. There would also be other less readily quantifiable benefits in terms of speedier removal of refuse floating at sea, thereby improving marine safety and the environment.

7. The proposed timetable for the procurement of the six vessels is as follows -

Design and preparation of specifications

January 1996

Invitation of tenders

March 1996

Award of tender

July 1996

Delivery of the first two vessels

April 1997

Delivery of the third and fourth vessels

March 1998

Delivery of the fifth and sixth vessels

March 1999

The phased delivery of the vessels takes into account the lead time required for construction.

FINANCIAL IMPLICATIONS

Non-recurrent expenditure

8. D of M estimates that the non-recurrent cost of procuring the six purpose-built vessels is $50.4 million which includes a 5% contingency. The estimated cashflow is as follows -


$ million

1996-97

10.92

1997-98

21.84

1998-99

16.80

1999-2000

0.84

Total

50.40

Recurrent expenditure

9. D of M estimates that the additional annually recurrent expenditure to operate the expanded fleet is as follows -


1997-98
$ million
1998-99
$ million
1999-2000
onwards
$ million

(a) Staff

0.77

2.04

3.06

(b) Running cost of the vessels

1.05

2.80

4.20

Total

1.82

4.84

7.26

10. As regards paragraph 9(a), the staff cost is to cover the phased increase of 24 additional posts from 1997-98 to 1999-2000 to man the new fleet. The 24 posts include six Launch Masters, 12 Launch Assistants and six Senior Launch Mechanics.

11. As regards paragraph 9(b), the running cost covers the maintenance and fuel consumption of the vessels.

12. If Members approve the proposal, we shall include the necessary provision in the annual Estimates for the purpose.

OTHER PROPOSALS CONSIDERED

13. We have considered the alternative of contracting-out the entire marine refuse scavenging and collection service, including an expanded and improved service to be provided by the private sector. For this purpose, we conducted a tendering exercise in early 1995. The tender was for a ten-year contract based on a Design-Build-Operate approach. That is to say, we asked the tenderers to design a work plan for providing the required coverage and standard of services, build new specialised vessels and operate them. Government would pay for the capital cost of the proposed new vessels, lease the vessels to the successful tenderer and pay the operating charges.

14. Following a vigorous assessment and cost-benefit analysis, none of the four tenders received were considered acceptable. Three of them failed to meet the operational requirements while the fourth one was not cost-effective. Regarding the latter, a cost comparison done indicated that MD would be able to provide the service at a much lower cost. The respective capital and recurrentcosts of providing the full range of services including the fleet and onshore facilities were $246 million and $107 million under the tender compared to $89 million and $42 million required by MD. We therefore concluded that MD should provide an expanded service with in-house resources.

BACKGROUND INFORMATION

15. The procurement of six purpose-built vessels is part of MD’s overall strategy and plan to improve the existing marine refuse scavenging and collection service. Other measures include -

  1. improvement works to three existing MRCPs and construction of four new MRCPs at strategic locations to reduce the vessels’ steaming time to unload the collected refuse and hence to increase their scavenging time;
  2. procurement and installation of shore cranes in seven MRCPs to facilitate the lifting of marine refuse from scavenging and collection vessels; and
  3. contracting additional working boats to improve scavenging service in typhoon shelters and collection service of refuse from ships.

16. We regularly briefed the LegCo Panel on Environmental Affairs on progress in tackling the problem of the floating refuse, most recently on 3 January 1996.

Planning, Environment and Lands Branch
January 1996


Last Updated on 2 December 1998