For discussion
FCR(97-98)69
on 28 November 1997
ITEM FOR FINANCE COMMITTEE
CAPITAL WORKS RESERVE FUND
HEAD 701 - LAND ACQUISITION
New Subhead " Pilot scheme on contracting out certain land resumption work in the New Territories"
Members are invited to approve the creation of a new subhead with a commitment of $17.57 million for engaging consultants to undertake land resumption work in the New Territories under a pilot scheme.
PROBLEM
We forecast a significant and rapid increase in the amount of land that needs to be resumed for projects in the Public Works Programme (PWP) and for non-PWP projects1 over the next five years. Lands Department (Lands D) do not have sufficient in-house resources to cope with the workload arising from such a need.
PROPOSAL
2.We propose to engage consultants to undertake land resumption work for two public works projects in the New Territories on a pilot basis at an estimated cost of $17.57 million.
JUSTIFICATION
3.We have compared the projected demand for land acquisition and clearance over the next five years against Lands D's likely ability to meet this demand in terms of staffing resources. The demand for resumption of private land and clearance of both private and Government land between 1996-97 and 2000-01 will exceed 4 000 hectares
2 (ha) whereas the maximum area of land that Lands D is likely to be able to deliver over the same period is at best 2 000 ha, based on current staffing resources devoted to land acquisition work.
4.We need to tackle this problem in ways which will make the best use of available staff resources to ensure the timely delivery of capital works projects. We expect to provide additional staffing resources to Lands D to meet the increase in demand for land acquisition, but it is unlikely that we can recruit sufficient experienced staff to meet the projected demand fully. While the Director of Lands (D of L) will redeploy the staff available to focus on high priority projects which will have a significant impact on the delivery of the public works programme and major transport and infrastructure initiatives, the traditional approach to land acquisition will need to be augmented to enable Lands D to fully meet its obligations in terms of land acquisition in the medium term.
5.One option, which we believe could assist in meeting this requirement would be to contract out certain aspects of land acquisition work to the private sector. The D of L considers that private sector consultants could carry out specific, pre-defined tasks related to land acquisition which would not compromise in any way the existing relationship between private landowners and the Government in terms of statutory rights and obligations but would free up Lands D staff to carry out the core aspects of the resumption work. To some extent this would relieve the pressure on lands acquisition staff and allow a greater area of land to be cleared or resumed within the required tight time frame. D of L therefore proposes to conduct a pilot scheme to test the feasibility and effectiveness of employing consultants to undertake certain activities in the land acquisition and clearance process.
Under the scheme, D of L proposes to contract out the following aspects of land acquisition work -
- preparing various land resumption and related plans such as the clearance plan, land status plan, land boundary status plan and land use plans;
- surveying and measuring all affected domestic and farm structures, crops, pine trees, graves/Kam Taps, fishponds, etc.; identifying their land status; assessing and calculating the amount of ex-gratia allowances payable to eligible claimants;
- checking the title of claimants and proof of entitlement to compensation; conducting land searches to update landowners' particulars and schedule of title deeds;
- preparing statutory offer letters3 to the affected landowners; and arranging payments of ex-gratia allowances for both agricultural and building land affected by land acquisition;
- liaising with government departments such as Agriculture and Fisheries Department and Housing Department on land clearance; assisting in the demolition of affected structures and the removal of graves to facilitate the handover of the sites to Government;
- providing legal advice to Lands D on all matters relating to land resumption projects, including the area of the land to be resumed, the title and exact boundaries for resumption, the nature of compensation payable and the identification of persons eligible for compensation; and
- other miscellaneous tasks such as preparing draft resumption gazette notices and progress reports.
6.While we propose to contract out the above activities certain tasks will remain firmly the responsibility of the Land Authority. Lands D staff, therefore, will continue to be responsible for posting and serving Gazette Notices, signing cancellation letters in respect of Government Land Licences, Modification of Tenancy, Short Term Tenancies, and Short Term Waivers, and for signing Notices to Quit, Statutory and Non-statutory Offer Letters. As the contracting out of resumption work is a new venture, Lands D staff will explain carefully the activities, responsibilities and span of authority of the consultants to affected landowners, whenever necessary. For example, the consultants will have no right of entry into private land before the land reverts to the Government (normally three months after the day on which a notice of resumption is posted on site). Lands D will, therefore, invite affected landowners to allow the consultants access to their property for the purpose of measurement and assessment of ex-gratia allowances for loss of crops, etc. We do not anticipate insurmountable difficulties in this respect as it will be in the landowners' interest to co-operate with the consultants in order to speed up the process of making compensation payments. If the consultants, as the Government's agent, cause any loss of or damage to private property in the course of their work, the affected landowners may claim against the Government. The Government will require the consultants to indemnify the Government against such claims.
The proposed pilot scheme
7.As land is normally resumed under either the Crown Lands Resumption Ordinance (to be construed in accordance with section 2A of the Interpretation and General Clauses Ordinance as added by the Hong Kong Reunification Ordinance) or the Roads (Works, Use and Compensation) Ordinance, we have identified one project under each Ordinance to be covered by the pilot scheme. These projects are -
- Yuen Long-Tuen Mun Corridor : site formation works for areas 10 and 11 in Hung Shui Kiu (PWP project 7222CL)
This is a Category B project in the PWP covering the formation of sites for residential developments in Hung Shui Kiu, Yuen Long. The project requires the acquisition of 1.5 ha of private land under the Crown Lands Resumption Ordinance and the clearance of 0.7 ha of Government land. We have finalised the clearance boundary of the project. We expect to gazette the scheme in November 1998, resume and clear the land for site formation works in May 1999. Before gazetting the scheme and after clearing the land, the consultants would need about nine months to carry out the preparatory and follow up work related to the acquisition and clearance exercise, such as checking land titles and arranging the payment of ex-gratia allowances which are still outstanding.
- Kam Tin Bypass, Yuen Long (PWP project 6246TH)
This is a Category B project in the PWP aimed at relieving traffic congestion in Kam Tin Road, Yuen Long. The project requires the acquisition of 9.5 ha of private land under the Roads (Works, Use and Compensation) Ordinance and clearance of 3.2 ha of Government land. We have finalised the clearance boundary of the project. We expect to gazette the scheme in June 1999 and resume and clear the land for road construction in November 1999. The consultant would also need about nine months to carry out the preparation and follow up work outlined in paragraph 7(a) above.
8.D of L expects the consultants to complete the designated land resumption work for the site formation works for areas 10 and 11 in Hung Shui Kiu in about two years and that for the Kam Tin Bypass in about 2 -1/2 years. He plans to commence the pilot scheme in mid-December 1997 for completion in November 1999 and May 2000 respectively.
9.D of L will redeploy existing staff to form a steering group within Lands D to monitor the progress of the pilot scheme and to ensure its timely completion. Upon completion of the scheme, D of L will review its scope and effectiveness. If the scheme proves to be successful, we will consider contracting out land resumption work for other projects. This would help to ease the pressure on Lands D staffing resources, expedite land acquisition work and allow capital works projects to proceed more quickly.
FINANCIAL AND STAFFING IMPLICATIONS
10.We estimate the pilot scheme will cost $17.57 million, broken down as follows -
| Kam Tin
Bypass
$ million | Site
formation
works at
Hung
Shui Kiu
$ million | Total
$ million |
|
|---|
| (a) Consultancy fees
| 10.09 | 4.12 | 14.21 |
|
| (b) Out-of-pocket expenses
| 0.10 | 0.10 | 0.20 |
|
| (c) Contingencies (10% of (a) and (b))
| 1.00 | 0.40 | 1.40 |
|
| Sub-total | 11.19
| 4.62 | 15.81 | (at
November
1997
prices)
|
| (d) Inflation allowance
| 1.25 | 0.51 | 1.76 |
|
| Total | 12.44
| 5.13 | 17.57 |
|
Analysis by man months of the estimates for consultants' fees are at Enclosures 1 and 2.
11.D of L advises that the cash flow of the pilot scheme will be as follows -
| $ million
(Money-of-the-day)
|
|---|
| 1997-98 | 2.53
|
| 1998-99 | 6.45
|
| 1999-2000 | 7.85
|
| 2000-01 | 0.74
|
| Total | 17.57
|
12.We will award the proposed consultancy on a lump-sum basis with provision for inflation adjustment, based on the Hang Seng Consumer Price Index.
BACKGROUND INFORMATION
13.Lands D is responsible for acquiring and clearing land for the implementation of PWP and non-PWP projects. The land acquisition costs, including various ex-gratia allowances, are charged to various subheads under Head 701 Land Acquisition, except for the clearance costs of Government land not required for PWP projects which are charged to Head 91 Lands Department.
Planning, Environment and Lands Bureau
November 1997
1.Non-PWP projects include projects financed by the Provisional Municipal Councils, Land Development Corporation and Housing Society.
2. The estimated demand of 4 000 ha is made up of -
| Hectares
|
|---|
| PWP projects | 3 251
|
| West Rail | 400
|
| Other high priority rail projects (MTR Tseung Kwan O extension, MTR Quarry Bay extensions and the Ma On Shan Railway) | 10
|
| Housing projects | 700
|
| 4 361
|
3. Although the consultants would prepare the offer letters, representatives of D of L will counter-check the letters before signing them. D of L remains the authority to approve the payment of ex-gratia allowances.
Enclosure 1 to FCR(97-98)69
Breakdown of Estimates for Consultants ' Fees -
Land Resumption Work of 6246TH Kam Tin Bypass
| Consultants ' staff cost | | Estimated
man
months
| Average
MPS
salary
point | Multiplier
factor | Estimated
fee
($ million)
|
|---|
| Land survey and mapping work
|
|---|
| (i) | Preparing resumption and related plans
| Professional
Technical
| 0.5
5 | 38
18
| 3
3 | 0.08
0.33
|
| Land executive work
|
|---|
| (ii) | Site investigation and analysing land data
| Professional
Technical
| 8.5
16 | 31
14
| 3
3 | 1.02
0.86
|
| (iii) | Taking measurement of affected structures, crops, etc. and assessing compensation payments
| Professional
Technical
| 19
36 | 31
14
| 3
3 | 2.28
1.95
|
| (iv) | Arranging payment of compensation
| Professional
Technical
| 10.5
20 | 31
14
| 3
3 | 1.26
1.08
|
| (v) | Co-ordinating and conducting clearance work
| Professional
Technical
| 4
8 | 31
14
| 3
3 | 0.48
0.43
|
| Legal work
|
|---|
| (vi) | Title checking and resumption related legal services
| Professional
Technical
| 1
1.5 | 44
21
| 3
3 | 0.21
0.11
|
| Sub-total | 10.09
|
| Consultants' out-of-pocket expenses
| 0.10
|
| Total consultants' fees
| 10.19
|
Notes -
1.A multiplier factor of 3 is applied to the average Master Pay Scale (MPS) point to arrive at the full staff costs including the consultants' overheads and profits, as the staff will be employed in the consultants' office. At 1 April 1997, the monetary equivalent of individual MPS point per month is as follows -
MPS point| $ per month
| |
| 14 | 18,010
|
| 18 | 21,900
|
| 21 | 25,340
|
| 31 | 40,085
|
| 38 | 54,255
|
| 44 | 69,615
|
2.Consultants' out of pocket expenses are the actual costs incurred. The consultants are not entitled to any additional payment for overheads or profit in respect of these items.
3.The figures given above are based on estimates prepared by the Director of Lands. We will only know the actual man months and actual fees when we have selected the consultants through the usual competitive bidding system.
Enclosure 2 to FCR(97-98)69
Breakdown of the Estimates for Consultants Fees -
Land Resumption Work of 7222CL Site
Formation Works
for Areas 10 and 11 in Hung Shui Kiu
| Consultants ' staff cost | | Estimated
man
months
| Average
MPS
salary
point | Multiplier
factor | Estimated
fee
($ million)
|
|---|
| Land survey and mapping work
|
|---|
| (i) | Preparing resumption and related plans
| Professional
Technical
| 0.5
3.5 | 38
18
| 3
3 | 0.08
0.23
|
| Land executive work
|
|---|
| (ii) | Site investigation and analysing land data
| Professional
Technical
| 3.5
6 | 31
14
| 3
3 | 0.42
0.32
|
| (iii) | Taking measurement of affected structures, crops, etc. and assessing compensation payments
| Professional
Technical
| 7.5
14.5 | 31
14
| 3
3 | 0.90
0.78
|
| (iv) | Arranging payment of compensation
| Professional
Technical
| 4
8 | 31
14
| 3
3 | 0.48
0.43
|
| (v) | Co-ordinating and conducting clearance work
| Professional
Technical
| 1.5
3 | 31
14
| 3
3 | 0.18
0.16
|
| Legal work
|
|---|
| (vi) | Title checking and resumption related legal services
| Professional
Technical
| 0.5
0.5 | 44
21
| 3
3 | 0.10
0.04
|
| Sub-total | 4.12
|
| Consultants' out-of-pocket expenses | 0.10
|
| Total consultants' fees
| 4.22
|
Notes -
1.A multiplier factor of 3 is applied to the average Master Pay Scale (MPS) point to arrive at the full staff costs including the consultants' overheads and profits, as the staff will be employed in the consultants' office. At 1 April 1997, the monetary equivalent of individual MPS point per month is as follows -
MPS point| $ per month
| |
| 14 | 18,010
|
| 18 | 21,900
|
| 21 | 25,340
|
| 31 | 40,085
|
| 38 | 54,255
|
| 44 | 69,615
|
2.Consultants' out of pocket expenses are the actual costs incurred. The consultants are not entitled to any additional payment for overheads or profit in respect of these items. The expenditure includes the payment of Land Registry service fees.
3.The figures given above are based on estimates prepared by the Director of Lands. We will only know the actual man months and actual fees when we have selected the consultants through the usual competitive bidding system.
