For discussion FCR(96-97)61
on 19 July 1996


Subhead 700 General other non-recurrent

Members are invited to approve a commitment of $40 million for a consultancy study on sustainable development for Hong Kong (SUSDEV 21).


Members considered FCR(96-97)44 at the Finance Committee meeting on 12 July 1996. We withdrawn the item in the light of concerns and queries raised by Members. We have considered such issues and present this paper aims to further clarify and support the need to examine how the concept of sustainability should apply to Hong Kong. We are also addressing the specific questions raised by Members at the meeting at the Enclosure.


2. We propose to engage consultants to assist the Government to undertake a study on how we can apply the principles of sustainable development achieved through the formulation and implementation of policies, plans and programmes on a corporate basis. We have revised the estimated cost of the proposal from the original $41.7 million to $40 million.


3. About 55 per cent of the world's population now live in the Asia-Pacific region and this figure is growing very rapidly. There has been an accelerating trend in urban development in many of the countries in this region which is associated with rapid economic growth, especially through increased industrialisation. This can bring about negative environmental and social impacts, such as reduced air and water quality, loss of productive agricultural land and increased health risks. In order to cope with such pressures, it will be necessary to strengthen and better co-ordinate policies, plans and infrastructure development programmes so as to balance and satisfy economic, social and environmental needs within the resources constraints.

4. Such concerns are also apparent on a global scale and were brought into sharp focus at the 1992 Rio Earth Summit which came to the conclusion that "a Government's strategy should build upon and harmonise the various sectoral, economic, social and environmental policies and plans that are operating in the country......Its goals should be to ensure socially responsible economic development while protecting the resource base and the environment for the benefit of future generations. It should be developed through the widest possible participation."

5. Whilst Hong Kong is a relatively small place, it does form part of a wider region comprising the Pearl River Delta and other parts of South China. This region has undergone rapid economic changes over the past 15 years which and that, in turn, is having major impacts on the economic, social and environmental conditions in Hong Kong. A key factor is that such growth is stimulating various "hub functions" of Hong Kong, especially in respect of its role as a major port, an international and regional airport, a financial and business centre, a tourist destination et alia. Such functions have created increasing demands for land for a wide range of economic activities and new infrastructures to handle growing volumes of cross-border trade. In parallel, the domestic needs of Hong Kong continue to grow apace, especially with regard to the provision of additional housing and a wide range of community facilities.

6. The current review of the Territorial Development Strategy (TDSR) provides a planning framework within which we could meet such needs could be met in terms of the formation of new land and the provision of transport systems and other infrastructure services. However, clearly the TDSR proposals alone will not guarantee that we can meet the economic, social and environmental needs of the community can be met in a balanced and sustainable way.

7. We therefore, need to set and achieve sustainable development objectives in carrying out the TDSR proposals. This is likely to require measures, for example, to help control the level of demand for various services; to keep levels of air and water pollution within acceptable limits; to adjust resource allocations between various sectors according to changing priorities;, to monitor and assess the cumulative impact of various development demands, etc.

8. The growth-generated issues before us will become more difficult to handle as both economic and social pressures increase within confined territorial limits. It will therefore be necessary within the broad framework of the TDSR to move towards an improved system of government that provides a more integrated way of setting community-based goals, of measuring the extent to which we achieve such goals are being achieved, of deploying resources and introducing administrative measures to make timely adjustments to plans and programmes, and of strengthening channels of communication with appropriate bodies beyond territorial limits.

9. At the core of an improved system we have to take stockthere has to be a stock-taking of various baseline conditions and to set up comprehensively organised monitoring systems that employing a range of key "indicators" to reflect conditions relative to agreed sustainable development objectives. To that end, we need a study to establish an integrated system through which to derive and apply better-integrated, corporate decisions. Furthermore, it is necessary to develop a sustainable development framework through which we can incorporate sustainable goals and targets into all our major policies and programmes, as well as to achieve the widest possible public support.

10. Governments in an increasing number of countries are now taking such initiatives and the recent Asia-Pacific Economic Co-operation (APEC) Forum held in Manila, attended by ministerial representatives of 18 countries and economies (including Hong Kong) has strongly reiterated the need for all countries in the Pacific region to move towards the goal of sustainable development. As a member of APEC, we have a commitment to fulfil that objective.


11. The total cost of the study would now be $40 million with a breakdown as follows -



Consultancy fees for -


development of sustainability indicators, criteria, and working assumptions



review of regional development trends and cross-border issues



environmental and ecological baseline study (including geographical information system development and training)



baseline assessments of economic, social and other relevant aspects



review of current policies/institutional systems



formulation and testing of sustainable development system



refinement of system and identification of future institutional and study requirements



public awareness and consultation exercises


Total consultancy fees



Consultant’s out-of-pocket expenses


computer facilities






exhibition and video


Total consultant’s out-of-pocket expenses



Contingencies (8% of (a) and (b) above)



Inflation related allowance






12. The Director of Planning now estimates that the cash flow of the study will be as follows -

$ million











13. To take into account the need to base the study on the actual situation in Hong Kong, we will incorporate into the tender conditions that actual relevant experience in Hong Kong will be a factor for consideration in selecting and awarding the consultancy.


14. Given the importance of the subject to Hong Kong’s development, we would very much like to make as early a start with the study as possible. Since this will be the last meeting of the Finance Committee before the summer recess, we hope Members would consider our proposal for funding approval to allow work to start soon. We regret late issue of this paper, but we were only able to explain again the need for the study at the briefing on TDSR on 16 July 1996.

Planning, Environment and Lands Branch
July 1996

Enclosure to FCR(96-97)61

List of Specific Questions Raised by Members on FCR(96-97)44

In considering FCR(96-97)44 at the Finance Committee meeting on 12 July 1996, Members raised a number of queries on the study, which we summarise generally as follows, with our response-

  1. whether something concrete would be produced at the end of the study, rather than one study leading to another;

    The principal products of the study would be a series of key reports relating to such matters as -

    1. a set of guiding values to reflect community aspirations and policy objectives, along with sets of sustainability indicators that will enable changing conditions to be monitored on a co-ordinated basis e.g. the amount of land taken up by open storage, the rate of increase of demand of trade handled by the port, levels of air pollution, the incidence of respiratory diseases, etc.;
    2. comprehensive assessments of existing baseline conditions in respect of key aspects that relate to the main economic, social and environmental components of a sustainable development system;
    3. proposals for community-based educational programmes to increase awareness of the importance of sustainable development principles and also to obtain feedback on changing aspirations; and
    4. proposals for the setting up of an improved corporate, consultative and decision-making process to facilitate a better understanding of and response to inter-related economic, social and environmental changes.

      In the above context, the original study brief proposed a Phase 2 to examine how we could carry forward the results of and decisions from Phase 1. We have reconsidered the matter and now propose that Phase 1 be made self-contained by modifying the scope of a final part of the study programme to produce firm recommendations for the implementation of a Sustainable Development System. We also proposed to undertake this work primarily by the Administration, thus avoiding any further cost implications.

  2. how the study would relate to previous and on-going studies;

    The work for the study would require the consultants to comprehensively review the scope and outcome of all related studies with the objective to bring together relevant findings. So far, we have identified 62 studies in Hong Kong, in addition to which the consultants will need to review published material from other countries. A special report on the findings of this task will be produced.

  3. whether the study would cause delay in the implementation of current plans and programmes;

    We must look at the introduction of a Sustainable Development System in a long-term context. While we need to carry forward current policies, standards, plans and programmes we may need to modify them where appropriate in due course to tie in with any new system of corporate decision making.

  4. whether it would be better to invite a well renowned expert in the field to work as an adviser to the Government;

    We will co-ordinate the study at technical level by a well-experienced, senior professional officer in the Planning Department. We consider close familiarity with conditions in Hong Kong and with our system of Government essential. We will also draw in experts in other fields from both Hong Kong and other countries that have taken forward the principles of sustainable development. Appointing an expert in the field to work as an adviser to the Government will place him in the same category as a consultant, but the complexity of the tasks required in the proposed study will not enable such consultancy work to be done by one person.

  5. whether the cost of certain items could be justified, especially in respect of printing, exhibitions, contingencies and inflation allowances;

    The cost of the study has been examined in some detail and we have proposed some reductions to reduce the overall cost from $41.7 million to $40 million, as follows -

    1. reduction of the cost of printing from $1.427 million to $1 million but with the consequence that the total number of two consultation digests would be reduced from about 40 000 to about 22 000 copies; and
    2. reduction of contingencies from $3.197 million to $2.506 million but with the consequence that this would constrain the scope of any essential additional work that may need to be undertaken.
  6. how the cost of the study compares to other previous similar studies;
    We set out at Annex the costs of other major studies undertaken over the past seven years. Each study, of course, is for a particular purpose but we consider that the cost of the present study, covering a period of 30 months and involving a number of essential baseline studies, is within reasonable bounds.
  7. whether it is appropriate for consultants to be involved in proposing policy changes.
    The consultants will not generate on their own account any proposals for policy or major procedural changes. Rather, it will be their job to identify areas where new perspectives would seem desirable and to present their case for such conclusions to the appropriate government bodies, including the relevant Panels of the Legislative Council. Such bodies will thus provide key inputs throughout the study.


Study on Sustainable Development for the 21st Century (SUSDEV21)

Costs of Other Major Studies - Some Examples

Name of study

Year approved

Duration of study

Approved commitment

Equivalent current cost

Port and Airport Development Strategy



* 37,200,000


Metroplan Development Statement Studies

89/90 to 93/94




Strategic Sewage Disposal Scheme Feasibility Study





Lautau Port and Western Harbour Development Studies





Study on Marine Activities, Associated Risk Assessment and Development of a Future Strategy for the Optimum Usage of Hong Kong Waters





South East Kowloon Development Feasibility Study





Air Quality Modelling Study





* actual cost of study in the Agreement
** 7.4% annual inflation rate assumed

Last Updated on 2 December 1998