For discussion PWSC(96-97)102
on 19 February 1997

ITEM FOR PUBLIC WORKS SUBCOMMITTEE
OF FINANCE COMMITTEE

HEAD 704 - DRAINAGE
Civil Engineering - Drainage and erosion protection
31CD - Shenzhen River improvement works, stage II - remaining works

Members are invited to recommend to Finance Committee the upgrading of 31CD, retitled "Regulation of Shenzhen River stage II phase II - improvement to river sections between Liu Pok and Lok Ma Chau and from Lok Ma Chau to estuary", to Category A at an estimated cost of $526 million in money-of-the-day prices.

PROBLEM

The hydraulic capacity of Shenzhen River (the River) is inadequate to alleviate the problem of flooding in the northern New Territories and Shenzhen.

PROPOSAL

2. The Director of Drainage Services, with the support of the Secretary for Planning, Environment and Lands, proposes to upgrade 31CD to Category A at an estimated cost of $526 million in money-of-the-day (MOD) prices to meet half of the estimated cost of implementing the stage II phase II works of the Shenzhen River regulation project 1 .

PROJECT SCOPE AND NATURE

3. The scope of the project comprises the following -

(a) erection of about 14 kilometres site security fence and ancillary lighting at Ma Tso Lung, Mai Po and Futian (Shenzhen);

(b) improvement of about 7 kilometres of the River between Liu Pok and Lok Ma Chau and from Lok Ma Chau to the estuary by widening and deepening, as well as the construction of new river embankments and river channel protection works;

(c) construction of ancillary drainage works including drainage pipes, culverts and hydrological stations;

(d) ecological mitigation measures which include planting of mangrove and related species, reinstatement of fishponds and ecological restoration works at the existing Lok Ma Chau river bend;

(e) general landscaping works which include tree planting and hydroseeding along the new embankment and at the Lok Ma Chau spoil disposal area; and

(f) environmental monitoring and audit during construction.

JUSTIFICATION

4. The hydraulic capacity of the River is incapable of handling the sudden flow of a large volume of water. As a result, flooding occurs during periods of typhoons and heavy rainstorms. Rapid developments in both the northern New Territories and Shenzhen in recent years have decreased the number of fishponds and the natural land area and have further aggravated the flooding problem. Several serious flooding incidents in recent years have disrupted transport, communication, social and commercial activities causing enormous economic losses to both Hong Kong and Shenzhen. There is an urgent need to implement the Shenzhen River regulation project to reduce the risk of flooding.

5. The Legislative Council, Heung Yee Kuk and Yuen Long and North District Boards have urged the Government to implement the Shenzhen River regulation project as soon as possible. At the seventh Joint Working Group 2 meeting on 2 August 1996, both the Hong Kong and Shenzhen authorities agreed to start the proposed works under 31CD in April 1997 or earlier if possible. To meet the target date, we need to obtain Finance Committee's approval for upgrading 31CD to Category A not later than March 1997.

6. The Shenzhen River regulation project comprises three stages. We have started the stage I and stage II phase I works. The stage II phase II works being proposed, together with the stage I works will improve the whole section of the River from Lo Wu to the estuary. We are carrying out a preliminary project feasibility study for stage III works which will realign, widen and deepen the section of the River from Lo Wu upstream to Lo Shue Ling.

7. In addition, we will implement large drainage improvement schemes 3 in the northern New Territories to reduce flooding in that area. These works will only be totally effective when we complete the Shenzhen River training work downstream.

8. Before we can start the proposed works, we need to erect site security fencing and ancillary lighting on both sides of the River at Ma Tso Lung and Mai Po in the New Territories, and at Futian on the Shenzhen side. We will also need to carry out ancillary drainage works to collect the stormwater flow from local areas into the River. We will construct two hydrological stations along the River to facilitate collection of hydrological data for the future surveillance of the River.

9. We will implement ecological mitigation measures to compensate for the loss of fishponds and mangroves due to the river improvement works. Proposed ecological restoration works at the old Lok Ma Chau river bend include the regrading of the river slopes and the enhancement of flora and fauna. This will compensate for the loss of fishponds arising from the stage I works 4.

FINANCIAL IMPLICATIONS

10. We estimate the total project cost to be $1,052 million in MOD prices. Our share of the cost is $526 million in MOD prices (see paragraph 11 below), made up as follows -




$ million

(a) Site security fence and ancillary lighting



5.2

(b) River channels improvements



294.5

(i) Between Liu Pok and Lok Ma Chau


111.5


(A) dredging

21.5



(B) disposal of spoil materials

32.3



(C) embankment construction and protection works

50.4



(D) geotechnical works for embankment

7.3



(ii) From Lok Ma Chau to the estuary


183.0


(A) dredging

33.7



(B) disposal of spoil materials

50.5



(C) embankment construction and protection works

78.9



(D) geotechnical works for embankment

19.9



(c) Ancillary drainage works



9.9

(d) Ecological mitigation measures



15.6

(e) Landscaping works



0.5

(f) Environmental monitoring and audit



3.7

(g) Contract management and supervision 5



18.0

(h) Contingencies



34.4




_____

Sub-total

(at December 1995 prices)



381.8

(i) Inflation allowance



144.2




_____

Total

(in MOD prices)



526.0




_____

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

Year

$ million

(Dec 1995)

Price

adjustment

factor

$ million

(MOD)

1997 - 98

63.0

1.18250

74.5

1998 - 99

135.0

1.30075

175.6

1999-2000

102.0

1.43083

145.9

2000-2001

52.0

1.54708

80.4

2001-2002

29.8

1.66311

49.6


_____


_____


381.8


526.0


_____


_____

12. We have derived the MOD estimate on the basis of the Government's forecast of trend labour and construction prices for the period 1997 to 2002.

13. We will tender the works contracts as two fixed-price lump-sum contracts because the scope of river improvement works is well defined. The Hong Kong Government and Shenzhen Municipal Government have agreed not to allow for adjustments to the tender price due to inflation in the contracts although the contract periods will exceed 21 months. This is because there is no inflation factor applicable to both Hong Kong and Shenzhen. Allowing adjustments for inflation in cross-border contracts may lead to contractual difficulties and disputes.

14. We have agreed with the Shenzhen Municipal Government that each side will be responsible for the maintenance of its own embankment and associated structures, while future maintenance dredging of the river channel will remain a joint undertaking. On this basis, we estimate the annually recurrent expenditure on our part to be $5.7 million. This includes the annual cost of maintaining the mangroves and trees planted on the Hong Kong side, estimated to cost about $135,000. We need only to provide for the upkeep of the plants for a period of nine years, after which the plants will become self-maintaining.

ENTRUSTMENT ARRANGEMENTS

15. It is neither practicable nor efficient for each side to implement separately those river improvement works falling within its own territory. We have agreed in principle to entrust the proposed works to the Shenzhen side for implementation. We have adopted this arrangement in view of access to the site, the existing usage and management of the River, and the cost and efficiency of contract administration. The Shenzhen River Regulation Office of the Shenzhen Municipal Government will take up the role of the contract employer and will be responsible for inviting tenders for the works contracts on the basis of tender documents agreed between Hong Kong Government and Shenzhen Municipal Government. The Office will be responsible for supervising the works and carrying out environmental monitoring and audit during construction. The works contracts will be subject to overall control and monitoring by the Joint Working Group. We carried out the stage I works under similar arrangements which worked satisfactorily.

16. We are finalizing an entrustment agreement with the Shenzhen side and we will sign the agreement before the award of the works contracts. The entrustment agreement will, among other things, set out the duties and obligations of each side, and arrangements on funding, financial control, contract management, site security and payments.

PUBLIC CONSULTATION

17. We presented the proposed works to the Yuen Long District Board and North District Board on 24 August 1995 and 12 October 1995 respectively. Members of both District Boards supported the proposal. We gazetted the works under the Foreshore and Sea-bed (Reclamations) Ordinance in May 1996 and received no objections.

ENVIRONMENTAL IMPLICATIONS

18. We completed an Environmental Impact Assessment (EIA) study in October 1995 to assess the potential environmental impacts of the stage II works of the Shenzhen River regulation project. Apart from measures to minimise construction noise, dust, spoil disposal, the increase in sedimentation in Deep Bay and water quality impacts from sediment releases during construction, the EIA study recommended measures to mitigate ecological impacts. The EIA study report concluded that with the application of the recommended mitigation measures, we will control the environmental impacts of the stage II works within established standards and guidelines.

19. The Advisory Council on the Environment endorsed the EIA report on 20 November 1995 on condition that we would implement all the mitigation measures proposed in the report. The Joint Working Group agreed to implement the mitigation measures as well as the environmental monitoring and audit programme.

20. We will implement the remaining part of the ecological mitigation measures recommended in the EIA report under this project while the others have either already been included in the stage II, phase I or will be implemented by the Shenzhen side. We will reinstate fishponds, plant mangrove at the southern side of the estuary and plant mangrove-related species along the northern embankment downstream of Lok Ma Chau to act as an ecological corridor. We will also carry out the outstanding ecological restoration works at the existing Lok Ma Chau river bend to compensate for the loss of fishponds arising from the stage I works.

21. We have also included relevant mitigation measures in the works contracts to control noise, dust, spoil disposal and other environmental nuisances. The Shenzhen River Regulation Office will carry out environmental monitoring and audit during construction at an estimated cost of $7.4 million at December 1995 prices (our share being $3.7 million at December 1995 prices and we have already included the cost in the project estimate).

LAND ACQUISITION

22. We have agreed with the Shenzhen Municipal Government that each side shall be responsible for the acquisition and clearance of land required for the project within its own territory, including the costs thereof. We will acquire and clear 8.5 hectares of agricultural land and will clear 118.9 hectares of Government land for the proposed works. We will charge the land acquisition and clearance costs, estimated to be about $115 million, to Head 701 - Land Acquisition. The clearance will remove 30 temporary structures affecting five families comprising 16 persons. We will rehouse the affected families according to the current housing policy.

BACKGROUND INFORMATION

23. We upgraded 31CD to Category B in November 1991.

24. In October 1993, we created a Category D project 63CD "Regulation of Shenzhen River stages I and II - preparatory works" at an approved project estimate of $6.6 million to fund the Hong Kong Government’s share of land survey for the stage I works, site investigation and hydraulic model test for the Lo Wu rail-bridge and an environmental impact assessment study for the stages I and II works.

25. In January 1995, we upgraded 24CD "Regulation of Shenzhen River, stage I - improvement to the river bends at Lok Ma Chau and Liu Pok" to Category A at an estimated cost of $188 million in MOD prices for implementing the stage I works. We started the works in May 1995 and will complete the works in May 1997.

26. In October 1995, we started the preparatory works for stage II under block allocation Subhead 4006DX " 6 Consultants' design fees and charges and major in-house investigations for drainage projects". The works included site survey and hydrological data collection to facilitate detailed design of the works. We also commissioned a design consultancy in April 1996 under Subhead 4100DX to carry out detailed design, site investigation and hydraulic model tests. The cost of these works were shared equally by both sides and our share of the cost was estimated to be $9.5 million.

27. In July 1996, we upgraded 44CD "Regulation of Shenzhen River, stage II, phase I - reprovisioning of border road between Lok Ma Chau and Tam Kon Chau" to Category A at an estimated cost of $200 million in MOD prices for implementing the stage II advance works. We started the works in November 1996 and will complete the works in November 1998.

28. The design consultants have substantially completed the detailed design of the proposed stage II phase II works. We plan to start the proposed works in April 1997 for completion in November 2000.

(JJ162)

1 -- The Hong Kong Government and the Shenzhen Municipal Government have agreed in principle to implement the stage II phase II works. Both sides have further agreed to share equally the costs of the works including site supervision costs. In our case, this is subject to Finance Committee's approval to upgrade 31CD to Category A.

2 -- In September 1992, a Joint Working Group was set up between Hong Kong Government and Shenzhen Municipal Government to discuss how to regulate the Shenzhen River.

3 -- For example, the training of the River Indus and the River Beas to be carried out under 53CD "new Territories North East development -- main drainage channels for Fanling, Sheung Shui and hinterland" and 64CD "Rural drainage rehabilitation scheme" respectively.

4 -- We cannot effectively implement the ecological restoration works to the old Lok Ma Chau bend until we have constructed an embankment under stage II phase II to cut off the polluted flow from the River.

5 -- The estimated total cost of contract management and supervision is $36 milion at December 1995 prices (5% of the total cost excluding environment monitoring and audit). Our share of the cost is $18 million at December 1995 prices.

6 -- Subhead 4006DX was combined with other block allocation subheads under Head 704 to form Subhead 4100DX "Drainage works, studies and investigations for items selected in Category D of the Public Works Programme" in the financial year 1996-97.

Last Updated on 16 August 1999