FCR(98-99)40

For discussion
on 30 October 1998

ITEM FOR FINANCE COMMITTEE


HEAD 44 - ENVIRONMENTAL PROTECTION DEPARTMENT
Subhead 700 General other non-recurrent

    Members are invited to approve a commitment of $15 million for engaging consultants to study the air pollution problems in the Pearl River Delta Region.

PROBLEM

The continuing development and urbanisation of Hong Kong and Guangdong are putting pressure on air quality in the entire Pearl River Delta Region (the Region). Air pollution emissions from sources such as motor vehicles, power stations, industries and construction activities are rapidly increasing.

PROPOSAL

2. We propose to engage consultants to study the air pollution problems in the Region that are relevant to Hong Kong with a view to developing effective preventive and control measures jointly with the Guangdong authorities.

JUSTIFICATION

3. In view of the continuing pressure put on air quality in the entire Pearl River Delta Region, the Hong Kong - Guangdong Environmental Protection Liaison Group has agreed that a joint study should be done on the air quality in the Region.

4. The Liaison Group considered that the study should identify the emerging air quality problems in the Region, project into the future, assess their impacts and recommend effective preventive and control measures. Guangdong has a pressing need to tackle acid rain. For Hong Kong, the priority is to alleviate pollution problems caused directly and indirectly by motor vehicles, e.g. nitrogen dioxide, photochemical oxidants and particulates. In practice, therefore, two studies will need to be done - "Study on Acid Rain Pollution and its Control Measures" and "Study of Nitrogen Dioxide, Photochemical Smog and Particulates and their Control Measures". Guangdong will take up the former and Hong Kong the latter, both at their own cost.

5. Both sides agreed to seek funds to commence the studies in April 1999 for completion by end 2000. Afterwards, a joint final report will be prepared for consideration and approval by the Liaison Group. The findings will assist in the formulation of future control strategies and plans to prevent further deterioration in the air quality of Hong Kong in the long term due to the growth of pollution sources in the Region.

6. The scope of the "Study of Nitrogen Dioxide, Photochemical Smog and Particulates and their Control Measures" is described in detail in paragraphs 8 to 10 below. This study requires extensive data collection and analysis work, much of which will need to be conducted in the field with the aid of scientific equipment. The Director of Environmental Protection has carefully assessed the capability of his department to undertake the study in-house. He has come to the conclusion that with the existing staff resources, the department will not be able to complete the study within the prescribed time frame without affecting the progress of its other work and services. If the study is deferred, Hong Kong and Guangdong would not be able to consider the preventive or control measures required in time to prevent further deterioration in air quality in the Region. Hong Kong would also look slow in taking steps to deal with the air pollution problems. We therefore propose engaging consultants to carry out the work for completion within the required time frame.

FINANCIAL IMPLICATIONS

7. The estimated cost of the study is $15 million, made up as follows -


$ million
(a) Study fees for -
  1. Collection and collation of baseline information

  2. Air quality monitoring and analysis

  3. Air quality projection and evaluation of control measures

5.03

4.21

3.01

(b) Out-of-pocket expenses

1.80
(c) Miscellaneous expenses and contingencies

0.40
Sub-total 14.45
(d) Inflation allowance10.52
Total 14.97
Say $15.0 million

____________

A detailed breakdown of the estimated study fees is at the Enclosure. We will commission the study on a lump sum fixed price basis.

8. As regards paragraph 7(a)(i), the estimated cost is for -

  • collecting baseline air quality information such as the existing levels of nitrogen oxides, suspended particulates and ozone monitored in Hong Kong, and the existing levels of nitrogen oxides and suspended particulates monitored in Guangdong. The consultants will also collect relevant meteorological information from relevant departments/authorities to study the effects of meteorological conditions on the formation of photochemical smog;

  • collecting information from relevant government departments/authorities as well as industrial and commercial establishments in the public and private sectors in Hong Kong and Guangdong on the distribution of pollution emission sources, emission levels, production technologies and existing mitigation measures. The consultants will collect information on the distribution of population and vegetation, land uses, transport networks as well as on activities in the sectors of transport, industry, commerce and household in the Region. They will use this information in estimating the intensity of emission from various sources. A desktop study of the archived data and publications, surveying and statistical analysis will also be required;

  • collecting information from relevant government departments/authorities and research institutions about policy, legislation and technical standards on pollution control and land uses, as well as projections on transport planning, social development, population growth and energy demand. The consultants will use this information to estimate the future emission levels of gases involved in the formation of photochemical smog in the Region; and

  • finally, collating, quantifying and digitising the data acquired. The consultants will construct an emission inventory for the existing and future situations for use in the prediction models.

    9. As regards paragraph 7(a)(ii), the estimated cost is for monitoring and sampling in the Region to measure air quality and to collect the relevant meteorological information at different times, locations and altitudes for a period within six months. This will provide information on those essential items which are currently not available, including the distribution of ozone levels as well as the levels and composition of volatile organic compounds in the Region.

    10. As regards paragraph 7(a)(iii), the estimated cost is for running prediction models with those baseline and additional information collected from the other two areas of work referred to above to predict future air pollution situations up to 2010. The consultants will also recommend pollution prevention and control options based on the actual situations of Guangdong and Hong Kong with reference to local and overseas experiences. In addition, they will prepare a comprehensive implementation plan for the optimal preventive and control strategy and a monitoring plan for assessing the effectiveness of the strategy.

    11. As regards paragraph 7(b), the out-of-pocket expenses are for meeting the costs of hiring of equipment, travelling, accommodation and chemical analysis. The equipment include analysers for pollutants like nitrogen dioxide, ozone and particulates; canisters for collecting samples for volatile organic compounds; and equipment for measuring meteorological parameters like wind, temperature, humidity and solar radiation. We expect approximately 100 to 130 samples of volatile organic compounds to be collected in canisters.

    12. As regards paragraph 7(c), the expenditure is on miscellaneous and unexpected items.

    13. The estimated cashflow is as follows -

      Year$ million
      1999-200010.0
      2000-20015.0

      		_____
      Total15.0

      		_____

    14. Subject to Members' approval of the proposal, we shall include sufficient provision in the 1999-2000 draft Estimates to meet the cashflow requirement. The proposal has no additional recurrent financial implications. The Environmental Protection Department will oversee the study with its existing staff resources.

    BACKGROUND INFORMATION

    15. The Hong Kong - Guangdong Environmental Protection Liaison Group was set up in 1990 to enhance cooperation and coordination between Hong Kong and Guangdong on environmental management and pollution control in areas of mutual concern. The Liaison Group is made up of senior officials from both sides. Annual joint meetings are held alternately in Hong Kong and Guangdong. A Technical Sub-group has been formed to implement the annual work programme of the Liaison Group. Both sides have organised visits, workshops and seminars to share experience and exchange views on environmental protection.

    -----------------------------------



    Planning, Environment and Lands Bureau
    October 1998


    Enclosure to FCR(98-99)40

    Detailed Breakdown of the Study Fees

    Consultant's staff costs
    		Estimated man months Average MPS salary point Multiplier factor Estimated fee
    ($ million)
    (a) Collection and collation of baseline information
    1. Collection of
      information

    2. Collation of information
    		Professional
    Technical

    Professional
    Technical     		6
    15

    12
    11     		40
    16

    40
    16     		3.0
    3.0

    3.0
    3.0     		1.13
    0.95

    2.26
    0.69
    _____
    5.03
    (b) Air quality monitoring and analysis
    1. Field work

    2. Data analysis
    		Professional
    Technical

    Professional
    Technical     		4
    28

    8
    3     		40
    16

    40
    16     		3.0
    3.0

    3.0
    3.0     		0.75
    1.76

    1.51
    0.19
    _____
    4.21
    (c) Air quality projection and evaluation of control measures
    1. Mathematical modelling

    2. Evaluation of control measures
    		Professional
    Technical

    Professional
    Technical     		4
    8

    8
    4     		40
    16

    40
    16     		3.0
    3.0

    3.0
    3.0     		0.75
    0.50

    1.51
    0.25
    _____
    3.01
    Total staff costs

    		12.25
    Out-of-pocket expenses
    (for item (b) above)
    (a) Hiring of equipment 1.00
    (b) Travel and accommodation 0.30
    (c) Chemical analysis 0.50
    _____
    Total out-of-pocket expenses

    		1.80
    Others
    Miscellaneous expenses and contingencies 0.40
    Total 14.45
    _____


    Notes -

    1. A multiplier factor of 3 is applied to the average Master Pay Scale (MPS) point to arrive at the full staff cost including the consultant's overheads and profit, as the staff will be employed in the consultant's offices. (At present, MPS Point 40 is $62,780 per month and MPS Point 16 is $21,010 per month.)

    2. Out-of-pocket expenses are the actual costs incurred. The consultant is not entitled to any additional payment for overheads or profit.

    3. These are only estimates. The actual man months and actual fees required will be known when we have selected the consultant through the usual competitive bidding system on a lump sum fixed price basis.




    1.Inflation allowance based on Composite Consumer Price Index of 2.7% as at August 1998.