Sewerage at Clear Water Bay Road, Pik Shui Sun Tsuen and West of Sai Kung Town

For discussion PWSC(2012-13)40 on 17 December 2012

ITEM FOR PUBLIC WORKS SUBCOMMITTEE OF FINANCE COMMITTEE

Head 704 – DRAINAGE Environmental Protection – Sewerage and sewage treatment 382DS – Sewerage at Clear Water Bay Road, Pik Shui Sun Tsuen and west of Sai Kung town

Members are invited to recommend to Finance Committee to increase the approved project estimate of 382DS by $68.4 million from $290.6 million to $359.0 million in money-of-the-day prices.

PROBLEM

The approved project estimate (APE) of 382DS is not sufficient to cover the cost of works under the project.

PROPOSAL

2. The Director of Drainage Services, with the support of the Secretary for the Environment, proposes to increase the APE of 382DS by $68.4 million from $290.6 million to $359.0 million in money-of-the-day (MOD) prices.

PROJECT SCOPE AND NATURE

3. In June 2012, the Finance Committee (FC) approved the upgrading of part of 272DS “Port Shelter sewerage, stage 2” and part of 273DS “Port Shelter sewerage, stage 3” to Category A as 382DS at an estimated cost of $290.6 million in MOD prices. The approved scope of 382DS comprises the construction of –

/(a) ….. PWSC(2012-13)40 Page 2

(a) about 12.8 kilometres (km) of sewers ranging from 150 millimetres (mm) to 300 mm in diameter for 11 unsewered areas, namely Kap Pin Long, Nam Shan, Pak Kong, San Uk, Sha Kok Mei, Tai Ping Village, Tai Shui Tseng, Wo Tong Kong, Lung Wo Tsuen, Pik Shui Sun Tsuen and in the vicinity of Fei Ngo Shan Road;

(b) about 3.6 km of gravity trunk sewers ranging from 225 mm to 450 mm in diameter along Clear Water Bay Road from Shun Chi Street to Razor Hill Road and around Pik Shui Sun Tsuen;

(d) about 900 metres (m) of twin rising mains ranging from 150 mm to 350 mm in diameter –

(i) at Pik Shui Sun Tsuen in association with construction of the SPS in (c) above;

(ii) along sections of Clear Water Bay Road near Tseng Lan Shue and Pak Shek Wo; and

(e) ancillary works.

Site plans showing the proposed works are at Enclosure 1.

4. We are going to implement the project under two contracts. The first contract covers the construction of civil engineering works associated with (a), (b), part of the works in (c), (d) and (e) in paragraph 3 whereas the second contract covers the electrical and mechanical (E&M) works of (c) in paragraph 3.

5. Tender assessment for the first contract was completed in October 2012. We will tender the second contract for the E&M works in early 2015. Having reviewed the financial position of the project, we propose to increase the APE of 382DS before recommending the award of the first contract. Subject to funding approval by the FC, we plan to commence the construction of the proposed sewerage works in January 2013 for completion in January 2017.

/JUSTIFICATION ….. PWSC(2012-13)40 Page 3

JUSTIFICATION

6. We need to seek approval from the FC to increase the APE of 382DS by $68.4 million to cover the additional costs due to higher-than-expected tender prices and increase in the provision for price adjustment over the duration of the project. The justifications for the increase are set out in paragraphs 7 to 10 below.

Higher-than-expected tender prices

7. All returned tender prices for the works under the first contract are higher than expected. We understand that tenderers have included more risk allowance taking into account the severe site constraints such as the difficult access to the hilly and congested village areas in Sai Kung and the stringent traffic restrictions at Clear Water Bay Road, leading to higher-than-expected risk costs. Based on the returned tender prices, this has led to an increase in construction cost by $59.7 million.

8. In the tender document for the first contract, we have presented an optimised design for the sewer alignment. We have also proposed to adopt open- trench construction method as far as possible to contain the construction costs. We have reviewed the design and construction method of works after the tender exercise but found little room to reduce the construction costs. We have also carefully considered the option of re-tendering. However, in view of the severe site constraints leading to higher cost as mentioned in paragraph 7 above and the fact that all bidders have submitted higher-than-expected tender prices, it is unlikely that the tender prices can be reduced by re-tendering. We have therefore decided not to pursue the option of re-tendering and propose to increase the APE for the project accordingly.

Increase in the provision for price adjustment

9. According to existing Government practice, monthly payments to contractors for most construction contracts are adjusted to cover market fluctuation in labour and material costs, which are known as Contract Price Fluctuation (CPF) payment. The payment for the works of 382DS is subject to CPF, and the provision for price adjustment was allowed when FC’s funding approval for 382DS was given in June 2012. At that time, on the basis of the assumptions on the trend rate of change in the prices of public sector building and construction output in March 2012, a provision of $52.8 million was allowed for price adjustment in the original APE.

/10. ….. PWSC(2012-13)40 Page 4

10. Given the need to provide for price adjustment for the $59.7 million increase in construction cost in paragraph 7 above and the increase in the latest forecast on the trend rate of change in the prices of public sector building and construction output1, we anticipate that the provision for price adjustment will be increased by $19.2 million from $52.8 million to $72.0 million. Detailed calculation on the proposed increase in provision for price adjustment is at Enclosure 2.

Offset by contingencies

11. After reviewing the financial position of 382DS, we recommend to partly offset the combined increase of $78.9 million in paragraph 7 and 10 above by drawing down a sum of $10.5 million in the project contingencies. The resultant shortfall will be met by increasing the APE of the project by $68.4 million from $290.6 million to $359.0 million in MOD prices. We consider it necessary to retain $10.0 million as contingencies to cater for possible instances incurring additional costs throughout the remaining stages of the project, such as variations of works as necessary, possible claims and valuation of works during finalisation of the project account.

Review of financial position

12. A summary of the proposed increase of $68.4 million is as follows –

Proposed increased % of the total Factors amount/savings increased in MOD prices amount/savings ($ million)

Increase due to –

(a) Higher-than-expected 59.7 76 tender prices

/(b) …..

1 The original funding application was approved by FC in June 2012, which assumed that the construction prices would increase by 5.5% per annum from 2012 onwards. The latest forecast in October 2012 assumes an increase of 7.0% per annum in 2012, 6.0% per annum from 2013 to 2017 and 5.0% per annum from 2018 onwards.

PWSC(2012-13)40 Page 5

Proposed increased % of the total Factors amount/savings increased in MOD prices amount/savings ($ million)

(b) Increase in provision for 19.2 24 price adjustment

Partly offset by – (d) Contingencies (part) 10.5 100

(e) Total savings 10.5 100 (e = d)

(f) Proposed increase 68.4 (f = c – e)

A comparison of the cost breakdown of the APE and the latest project estimate is at Enclosure 3.

13. Since the first contract as mentioned in paragraph 4 above constitutes most of the project estimate and the cost of the first contract is now ascertained by the tenders received, the uncertainties of the project are reduced. We will closely monitor and control the project programme and spending during the entire duration of the project with a view to containing the total expenditure within the latest project estimate. Also, we have reserved some contingencies for any possible additional costs in the latest project estimate. Hence, we consider that the revised APE is sufficient to cover the costs of the project.

FINANCIAL IMPLICATIONS

14. Subject to approval, we will phase the expenditure as follows –

/2012 ….. PWSC(2012-13)40 Page 6

$ million Year (MOD)

2012 – 2013 0.9 2013 – 2014 80.5 2014 – 2015 85.4 2015 – 2016 81.8 2016 – 2017 74.2 2017 – 2018 25.6 2018 – 2019 10.6 359.0

15. The proposed increase in the APE will not give rise to additional recurrent expenditure.

PUBLIC CONSULTATION

16. As the proposed increase in the APE does not involve any change in project scope, we consider further public consultation not necessary. Nevertheless, we will maintain close liaison with the local community throughout the construction period.

17. We consulted the Legislative Council Panel on Environmental Affairs on 26 November 2012 on the proposed increase in the APE. Members raised no objection to the proposal.

ENVIRONMENTAL IMPLICATIONS

18. The proposed increase in the APE will not give rise to any adverse environmental implications.

/HERITAGE …..

PWSC(2012-13)40 Page 7

HERITAGE IMPLICATIONS

19. The proposed increase in the APE will not affect any heritage site, i.e. all declared monuments, proposed monuments, graded historic sites/buildings, sites of archaeological interest and Government historic sites identified by the Antiquities and Monuments Office.

LAND ACQUISITION

20. The proposed increase in the APE will not involve any land acquisition.

BACKGROUND INFORMATION

21. In June 2012, the FC approved the upgrading of part of 272DS and part of 273DS to Category A as 382DS at an estimated cost of $290.6 million in MOD prices for implementing the proposed sewerage works in the Port Shelter catchment.

22. The proposed increase in the APE will not involve any additional tree removal or planting proposals.

23. The proposed increase in the APE will not create any new jobs.

------

Environment Bureau December 2012

“ ENCLOSURE 1 21.2 116.1 51.6 9.5

402.7 63.5 SHEET 1 OF 2 68.7 ¥G⁄i

60.3

76.5

¶¸ 118.6 91.2

136.8 Wong Chuk Wan 58.5 104.6 44.7 55.1 81.7 72.0 71.8 27.5 52.1 391.5 F¨¤ 828 000 N 38.1 50.1 Sha Kok Mei 34.5 22.6

42.9 51.6 6.8 38.6 29.9 371.8 è¦ 66.9 38.7 61.8 49.7 SAI KUNG 37.4

26.3 _¥ s· p 23.1 30.6 Pak Kong x San Uk 398.6 28.5 20.5 102.5

14.7 19.7 j¤F ¥ 40.9 · 14.7 61.1 Jetty 22.4 391.0 Tai Chung Hau 33.5 Wo Tong Kong 14.9 14.4 5

67.6 54.1 54.5 10.9 ¥© 14.5 Rocky Area 50.3 n« 11.3 13.3

ß⁄ Nam26.6 Shan 5.7 11.1 PORT SHELTER 40.8 17.9 58.6 12.9

85.8

4.2

31.1

50.3 40.8 5.6 F¨¤ 10.8 81.3

50 43.6 13.7 827 500 N j⁄ Sha15.8 Kok Mei ƒm LOCATION PLAN 7.4 11.3 SCALE 1 : 100 000 Tai Shui Tseng 21.3 ñ¤ 44.4 5.3 30.6 78.9 5.0

6.7 I¬u ˇ„ 121.4 15.0

7.5 LEGEND: 47.4 5.6

10.6

5.3

124.8 217.2 6.3 –Ø»ƒ{†‡ƒ”“ 5.6 85.7

¥ 3.7 CONNECT TO EXISTING 76.5 53.6 6.1

5.6 4.6 GRAVITY TRUNK SEWERS 43.2 Kap Pin Long3.6 34.7 I¬u Works in 5.4 progress «”“m¶ł§ˆƒ 32.2 195.7 90.3 4.3 110.0 ⁄D¥— 36.4 5.4 PROPOSED AREA FOR 50.7 IMPLEMENTATION OF 4.5 VILLAGE SEWERAGE WORKS 4.2 97.1 3.8 57.1 76.3 4.4

20.0 94.1 70.5 91.6 p 827 000 N 88.7 3.8

100.6 88.4 4.5 33.4 59.1 63.1 4.3

3.9 3.7 ⁄› p 19.5 X½ 14.2 6.1 X½ Pier Tai Ping Village Pier 146.1

107.0 73.3

168.3 4.1

51.5 _¥ 28.2 68.7 10.4 7.2 82.9

105.8 29.5 3.9 4.8 è¦ 91.0 63.2 Pak Kong 4.0

88.9 6.2

56.8 23.8 5.9 105.8 SAI KUNG

95.1 40.2

23.5 99.1 o´ 4.0 X½ Filter Bed 29.6 X½ 5.7 Pier Pier

36.8 5.8 26.8 90.2

21.4 36.8 29.6

17.7 p 31.8 23.5 27.4 † Slipway 26.8 X½ X½ p 18.8 12.9 Pier 106.3 Pier X½ X½ Pier 826 500 N 27.6 Pier 30.0 5.1 27.3 63.5 0 100 200 300 400 500 m

34.8 17.1 44.7

24.0 15.0

22.2 68.2 1 : 7500 SCALE BAR 17.4 34.6 48.5 27.0 33.3 48.1 111.1

13.9

78.4 44.7 53.0 38.2 35.4 5.0

18.6 24.8 47.5 43.6

C. C. CHAN 13 NOV 2012 DSP/382DS1/11023 AS SHOWN u⁄¨p›”„¶¥˜† 382DS „‚ - M† Ir S. P. CHOW 13 NOV 2012

PWP ITEM NO.382DS - SEWERAGE AT CLEAR WATER BAY ROAD, Ir C. C. YEUNG 13 NOV 2012 PIK SHUI SUN TSUEN AND WEST OF SAI KUNG TOWN

Col_pdf_cswp_v8.plt PLOTPEN.TBL c:\temp\dsd_pw\dms12377\DSP_382DS1_11023.dgn “ ENCLOSURE 1 Tsiu Hang 5.6 Che Keng Tuk 10.2 Ta Ho Tun Sheung Wai 23.0 103.3 91.8 30.0 j¤F Tai Chung Hau 103.7 36.0 Ta Ho Tun INNER PORT SHELTER 53.3 18.7 Ha Wai ( SAI KUNG HOI ) T⁄ Sam Fai Tin 44.7 SHEET 2 OF 2 30.0 ¥G⁄i 18.8 410.5 y¼| Hing Keng Shek ]Łƒ 823 500 N Kau Sai

San Tsuen 5 ¥F HEBE HAVEN 12.8 Pak Sha Wan ( PAK SHA WAN ) 80.2 ˇ„ 65.1 EªÐ 62.5 _¥ 43.7 Pak Wai 45.1 22.1 ‡ Luk Mei Tsuen Jƒ LEGEND: 53.1 Marina Cove ®Ä 41.4 Ho Chung

82.5 22.7 ⁄ Shui Hau Au Tsai 24.6 ®ÄF¯ Tsuen ¸¤ Ho Chung D¿J TÅ Yuen Ling New Village Heung Chung n« 65.3 ‚› Z n« Nam Wai –Ø»ƒ{†‡ƒ”“ Nam Pin Wai @« Pei Tau ” 27.4 KOWLOON PEAK Wo Mei 105.4 58.5 121.0 83.6 64.4 †B 105.9 Mok Tse Che 30.5 ( FEI NGO SHAN ) CONNECT TO EXISTING GRAVITY 35.8 51.7 ´¥ª ”⁄ 123.1 TA KU LING 121.5 61.0 ´¥ª¹ 127.7 Pik Uk Ta Ku Ling San Tsuen HEBE KNOLL 42.6 p˘ Pik Shui TRUNK SEWERS DIAMOND HILL Pik Uk ”⁄ Pik Shui Sun TsuenSun Tsuen «⁄ ˛« y¦· Pik Uk San Tsuen HEBE HILL ÂÅl ( TSIM FUNG SHAN ) ˛«g RAZOR HILL ¸Z ( CHE KWU SHAN ) PORT SHELTER Tseng Lan Shue Pik Uk KOWLOON PEAK B§½ Correctional ˛ ( NGAU MEI HOI ) ( FEI NGO SHAN ) PAK KUNG AUR Institution PIK UK AU «⁄ ß⁄ «”“L£ 366.6 Tseng Lan ¥ 75.3 Pak Shek Shue Terrace ËÄs ¥ ù¯d Denon U¸º Pak Shek j¤H 67.2 Terrace Man King Wo ˛ CHA LIU AU Terrace Tai Po Tsai PORT SHELTER Pik Uk Au PROPOSED GRAVITY TRUNK SEWERS s `² Lung Wo ´¬ 234.8 SAM LONG «ˆƒ Tsuen s·a 153.5 TAN SHAN Sun Tei A KUNG WAN p⁄ﬁ Village Siu To Yuen Bella Vista Village ¥

69.6 71.0 Pak Shek Wo213.7 PROPOSED SEWAGE 101.3 ıƒ «”“ø´” JORDAN SHELTER ISLAND 150.1 VALLEY (NGAU MEI CHAU) E¤s 105.9 75.0 PUMPING104.4 STATION KOWLOON BAY

SILVERSTRAND BEACH

82.9 N±x PROPOSED TWIN RISING MAINS 124.9 TSEUNG KWAN O 82.9 BAYSIDE BEACH 823 000 N 100.7

Fu Ning Garden

HANG HAU

Ng Fai Tin 164.7 O Mun Village Wo Tong Kong «”“m¶ł§ˆƒ Wai Sum Hung Uk “‚ 350.3 Village Pan Long Yu Uk Village Wan 162.5 s©½Chan Uk Village [Æ Mang Kung 118.4 KWUN TONG Uk PROPOSED AREA FOR IMPLEMENTATION 95.6 SHEUNG YEUNG SHAN Sheung Yeung 157.0

KOWLOON BAY Portofino Villas 166.5 133.5 OF VILLAGE SEWERAGE WORKS ˝ﬁ SAI TSO WAN Sheung Sze Wan Ha Yeung 219.9 315.5 Tai Hang Hau 10 MIU TSAI Siu Hang Hau

Leung Fai Mau Po ”⁄

«ˆƒ 172.1 103.6 135.5 146.9 178.6 147.6 144.3

ƒm LOCATION PLAN PROPOSED SEWAGE PUMPING STATION Pik Shui178.0 186.0

196.0 116.9 ñ¤ SCALE 1 : 100 000 151.2 Sun Tsuen 210.2 199.1 172.9

316.8

296.0 310.5 y¦· 144.3 126.2 HEBE HILL (TSIM FUNG SHAN) 132.3 128.3 8.2 345.8 129.1

822 500 N 130.0 115.7 340.8 297.5

343.5 137.6 227.9 108.5 240.9 ¯•⁄

248.6 223.4

340.4 x 342.5 Water 235.4 125.3 251.5 Tank ÂÅl 120.7

139.6 277.4 239.9 RAZOR HILL 240.8

125.0

˛ 130.2 94.4 242.9 (CHE KWU SHAN) 119.6 320.1 ¥¥ 267.0 234.2 ÂÅl B§½ Pik Uk Au 137.2 PAK KUNG ¸ZAU RAZOR HILL Pak Shek Wo 432.2 (CHE KWU SHAN) 231.4 248.5 KOWLOON PEAK 431.9 130.6 230.3 122.0 246.7 246.6 224.7 121.2 San Tsuen 240.4

( FEI NGO SHAN ) 231.0 130.4

207.4 268.5 p 214.6 198.3 121.3 210.1

200.2 207.6

217.0 822 000 N 254.1

209.4

233.8 238.5

249.1

279.5 I¬u 133.4 196.1 174.3 «⁄ 123.0 194.4 ¥ 163.8 264.8 298.3

124.5 Tseng Lan Shue 187.1 286.3 Pak Shek Wo ù¯d 186.0 CHA LIU AU 192.9 136.8 134.4 124.6

204.6 163.0 194.2

201.6

185.3 199.7 138.0

168.9 208.0

175.2 217.8

194.0

197.3 155.1 133.3 206.6 124.4 Works in progress 190.3

192.9 198.3 201.5 p 200.9 188.7 198.8 203.5

125.8 260.9 191.5 128.5

203.2

135.9 I¬u s 202.6

132.1 821 500 N 225.5 139.6 123.5

I¬u Lung Wo Tsuen 169.1 130.0 231.9 132.3

118.8 201.9

Works in progress x 199.1 216.6 ⁄ 179.6 206.9 111.2 202.7 p

202.1 156.7 65.5 SAM LONG 162.3 185.9 58.9 197.8

´¬ 133.8 203.7

46.7 p 55.8

153.3 TAN SHAN x 215.5 153.0 Water Works in progress 182.6 Tank

28.2 0 100 200 300 400 500 m

37.0 109.5 151.9

1 : 10 000 SCALE BAR

140.3

143.4 152.7

194.0 24.8 I¬u

C. C. CHAN 13 NOV 2012 DSP/382DS1/11024 AS SHOWN u⁄¨p›”„¶¥˜† 382DS „‚ - M† Ir S. P. CHOW 13 NOV 2012

PWP ITEM NO.382DS - SEWERAGE AT CLEAR WATER BAY ROAD, Ir C. C. YEUNG 13 NOV 2012 PIK SHUI SUN TSUEN AND WEST OF SAI KUNG TOWN

Col_pdf_cswp_v8.plt PLOTPEN.TBL c:\temp\dsd_pw\dms12377\DSP_382DS1_11024.dgn

Enclosure 2 to PWSC(2012-13)40

382DS – Sewerage at Clear Water Bay Road, Pik Shui Sun Tsuen and west of Sai Kung town

Table 1 – Cash flow and provisions for price adjustment in PWSC(2012-13)13 Year Original project Original price Approved project Provision for estimate adjustment factors estimate price adjustment ($ million, in (March 2012)# ($ million, in ($ million) September 2011 MOD prices) prices) X Y Z A=Z – X 2012 – 2013 21.2 1.05325 22.3 1.1 2013 – 2014 34.6 1.11118 38.4 3.8 2014 – 2015 49.7 1.17229 58.3 8.6 2015 – 2016 52.1 1.23677 64.4 12.3 2016 – 2017 53.4 1.30479 69.7 16.3 2017 – 2018 18.4 1.37656 25.3 6.9 2018 – 2019 8.4 1.45227 12.2 3.8 Total 237.8 290.6 52.8

Table 2 – Latest cash flow and provision for price adjustment due to latest project estimate (PE) and latest adjustment factors Year Latest PE Latest PE Latest price Latest PE Latest Net ($ million, in ($ million, in adjustment ($ million, in provision increase in September September factors MOD prices) for price provision 2011 prices) 2012 prices)^ (October adjustment for price 2012) ## ($ million) adjustment ($ million) a b c d e f 2012 – 2013 0.8 0.9 1.00000 0.9 2013 – 2014 71.1 75.8 1.06250 80.5 2014 – 2015 71.1 75.8 1.12625 85.4 2015 – 2016 64.2 68.5 1.19383 81.8 e = d – a f = e – A 2016 – 2017 54.9 58.6 1.26545 74.2 2017 – 2018 17.9 19.1 1.34138 25.6 2018 – 2019 7.0 7.5 1.41180 10.6 Total 287.0 306.2 359.0 72.0 19.2

Notes:

# Price adjustment factors adopted in March 2012 are based on the projected movement of prices for public sector building and construction output at that time, which are assumed to increase by 5.5% per annum from 2012 onwards.

## Price adjustment factors adopted in October 2012 are based on the latest movement of prices for public sector building and construction output, which are assumed to increase by 7.0% per annum in 2012, by 6.0% per annum from 2013 to 2017 and by 5.0% per annum from 2018 onwards.

^ The latest project estimate (in September 2011 prices) is multiplied by 1.06675 for conversion to September 2012 prices. The figure of 1.06675 represents the changes in price movement for public sector building and construction output between September 2011 and September 2012.

Enclosure 3 to PWSC(2012-13)40 (Page 1 of 2)

382DS – Sewerage at Clear Water Bay Road, Pik Shui Sun Tsuen and west of Sai Kung town

A comparison of the approved project estimate and the latest project estimate is as follows –

(A) (B) (B) - (A) Approved Latest Project Project Estimate Estimate Difference ($ million) ($ million) ($ million) (a) Construction of 81.6 110.2 28.6 sewers within villages

(b) Construction of 69.0 93.1 24.1 gravity trunk sewers

(d) Construction of 12.9 14.3 1.4 sewage pumping station

(i) civil engineering 4.5 5.9 1.4 works

(ii) electrical and 8.4 8.4 0 mechanical works

(e) Ancillary works 0.5 0.6 0.1

(f) Environmental 4.3 4.3 0 mitigation measures

(g) Consultants’ fees for 3.0 3.0 0

(i) contract 0.8 0.8 0 administration

(ii) management of 1.7 1.7 0 resident site staff

(iii) environmental 0.5 0.5 0 monitoring and audit

Enclosure 3 to PWSC(2012-13)40 (Page 2 of 2)

(A) (B) (B) - (A) Approved Latest Project Project Estimate Estimate Difference ($ million) ($ million) ($ million) (h) Remuneration of 30.3 30.3 0 resident site staff

(i) Contingencies 20.5 10.0 (10.5)

Sub-total 237.8 287.0 49.2

(j) Provision for price 52.8 72.0 19.2 adjustment Total 290.6 359.0 68.4

2. As regards 1(a) (Construction of sewers within villages), 1(b) (Construction of gravity trunk sewers), 1(c) (Construction of rising mains), 1(d)(i) (Construction of sewage pumping station – civil engineering works) and 1(e) (Ancillary works), the increase of $59.7 million is due to higher-than-expected tender prices.

3. As regards 1(i) (Contingencies), after review we consider that a smaller sum of contingencies of $10.0 million would be adequate to cater for variations of works as necessary, possible claims and valuation of works during finalisation of the project account, etc.

4. As regards 1(j) (Provision for price adjustment), the increase of $19.2 million is due to an increase in payment for projected contract price fluctuation.