For discussion FCR(96-97)45
on 12 July 1996

ITEM FOR FINANCE COMMITTEE

CAPITAL WORKS RESERVE FUND
HEAD 708 - CAPITAL SUBVENTIONS AND MAJOR SYSTEMS AND EQUIPMENT
Medical Subventions
New Subhead “Butterfly Beach Laundry”

Members are invited to approve a commitment of $341.67 million in money-of-the-day prices for the construction of Butterfly Beach Laundry.

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PROBLEM
PROPOSAL
PROJECT SCOPE AND NATURE
JUSTIFICATION
FINANCIAL IMPLICATIONS
ENVIRONMENTAL IMPLICATIONS
PUBLIC CONSULTATION
BACKGROUND INFORMATION
22MM - Butterfly Beach Laundry --DETAILS OF CONSULTANTS’ FEES

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PROBLEM

The existing laundry facilities at Queen Elizabeth Hospital (QEH) are inadequate to meet increasing demands arising from patient activities in the hospital and projects in the pipeline.

PROPOSAL

2. The Secretary for Health and Welfare (SHW) proposes to construct a new laundry at Area 40, Tuen Mun at a total non-recurrent cost of $341.67 million in money-of-the-day (MOD) prices to cope with projected demands.

PROJECT SCOPE AND NATURE

3. The project will involve the construction of a new four-storey laundry in Tuen Mun. A site plan is at Enclosure 1.

4. The new laundry with a total gross floor area of 12 390 m² will provide the following facilities -

1. Ground Floor : Loading/unloading bay, sorting area, central disinfection room, boiler room, transformer room and engineering workshop;
2. First Floor : Linen and blanket stores as well as bulk storage facilities;
3. Second Floor : Laundry washing and ironing areas; and
4. Third Floor : Administrative offices and linen repair workshop.

JUSTIFICATION

5. We installed the existing laundry facilities at QEH in 1962 mainly for the purpose of handling demands arising from patient activities in the hospital. These facilities have since been expanded over the years to a maximum capacity of 4.8 million kg per year to cater for other hospitals in the vicinity including Lai Chi Kok Hospital, Fanling Hospital and Hong Kong Eye Hospital.

6. Given improved standards over time, the laundry facilities at QEH are below current standards in terms of design layout and processing technology. The limited capacity is also unable to cope with projected demands arising from projects in the pipeline such as North District Hospital, Tai Po Infirmary and Convalescent Hospital, Kowloon Medical Rehabilitation Centre, and Tseung Kwan O Hospital which will come into operation between 1998 and 2000. As expansion within the existing site is not feasible, SHW proposes to construct a new laundry with a maximum capacity of 10.8 million kg a year in Tuen Mun to meet current standards and to cope with the increase in demand.

FINANCIAL IMPLICATIONS

7. The Director of Architectural Services (D Arch S) estimates the total project cost to be $341.67 million at MOD prices, made up as follows -

A breakdown of estimates for consultants’ fees is at Enclosure 2.

8. The estimated cashflow is as follows -

9. D Arch S derives the MOD estimate based on Government’s forecast of trend labour and construction prices over the period between 1996 and 2001. We will tender the project under two fixed price lump-sum contracts for piling and superstructure respectively as D Arch S can define clearly the scope of the works in advance, leaving little room for uncertainty.

10. The Hospital Authority (HA) estimates that the additional annual recurrent expenditure will be $7.23 million at 1996-97 prices, made up as follows -

11. This project does not require land acquisition and clearance. Subject to Members’ approval, D Arch S plans to start work in November 1996 for completion in March 1999.

ENVIRONMENTAL IMPLICATIONS

12. The Director of Environmental Protection completed an Environmental Review (ER) for the proposed laundry in August 1993. He concluded that with liquid effluent pre-treatment and chimney facilities, the environmental impacts associated with the operation of the laundry would meet the established criteria. D Arch S will design the laundry to meet these criteria. For short term impacts, he will control the noise, dust and run-off nuisance during construction to established standards/guidelines through the incorporation of standard mitigation measures in the contract. D Arch S confirmed that the scope of the project had not changed since the ER.

PUBLIC CONSULTATION

13. HA first presented the project to the Tuen Mun District Board (TMDB) on 10 October 1995. Tuen Mun District Office (TMDO) and HA also jointly arranged for TMDB members to visit the Shum Wan Laundry on 14 March 1996 to familiarise them with the operation of similar facilities. At a subsequent meeting held on 16 April 1996, TMDB members expressed concern about the potential impact on water quality in the area and declined to support the project with seven voting against, five voting for and five abstentions.

14. In order to address the specific concern about water quality, HA and D Arch S have adopted the suggestion raised by TMDB members to upgrade the control standard of water treatment facilities in the new laundry. TMDO circulated to TMDB members an information paper prepared by D Arch S and HA on this subject on 27 June 1996. We have so far received no further objection to the project.

BACKGROUND INFORMATION

15. At present, HA provides the laundry services for public hospitals and clinics through a network of 13 laundries, six being stand-alone facilities and seven located within hospitals. In order to rationalise its supporting services and enhance productivity, HA is consolidating and integrating some existing laundries to operate on a regional basis. Upon completion, the Butterfly Beach Laundry will form a network with laundries in Tuen Mun Hospital and Yan Chai Hospital to serve New Territories North, New Territories and Kowloon West.

Health and Welfare Branch
July 1996

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Enclosure 1 to FCR(96-97)45

A site plan is not attached

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Enclosure 2 to FCR(96-97)45

22MM - Butterfly Beach Laundry --DETAILS OF CONSULTANTS’ FEES

Breakdown of estimate for consultants’ fees

Notes

1. A multiplier of 3 is applied to the average MPS point to arrive at the full staff costs including the consultants’ overheads and profits, as the staff will be employed by the consultants (At 1 April 1995, MPS points 40 and 16 are equivalent to $51,440 and $17,270 per month respectively).

2. These figures are based on estimates prepared by D Arch S. We will only know the actual man-months and level of fees after we have selected the consultants through the usual competitive lump-sum fee bid system.

3. The estimated consultants’ fees represent 2% of the total project estimate, and cover services for quantity surveying discipline.

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