PWSC(2012-13)49 on 5 February 2013

For discussion PWSC(2012-13)49 on 5 February 2013

ITEM FOR PUBLIC WORKS SUBCOMMITTEE OF FINANCE COMMITTEE

HEAD 705 – CIVIL ENGINEERING Support – Boundary facilities (other than road works) 13GB – Liantang/Heung Yuen Wai Boundary Control Point and associated works

Members are invited to recommend to Finance Committee –

(a) the upgrading of part of 13GB, entitled “Liantang/Heung Yuen Wai Boundary Control Point and associated works – regulation of Shenzhen River stage IV”, to Category A at an estimated cost of $595.1 million in money- of-the-day prices; and

(b) the retention of the remainder of 13GB in Category B.

PROBLEM

An existing section of Shenzhen (SZ) River between Ping Yuen River and Pak Fu Shan cannot meet the flood protection standard for the development of a new Boundary Control Point (BCP) at Heung Yuen Wai in North District.

/PROPOSAL ….. PWSC(2012-13)49 Page 2

PROPOSAL

2. The Director of Civil Engineering and Development, with the support of the Secretary for Development, proposes to upgrade part of 13GB to Category A at an estimated cost of $595.1 million in money-of-the-day (MOD) prices for carrying out river regulation works to upgrade the flood protection standard of a section of SZ River between Ping Yuen River and Pak Fu Shan for the development of the new BCP at Heung Yuen Wai.

PROJECT SCOPE AND NATURE

3. The part of 13GB that we propose to upgrade to Category A (the proposed works) comprises –

(a) regulation of about 4.5 kilometres (km) long river channel of SZ River between Ping Yuen River and Pak Fu Shan;

(b) construction of a water storage basin with a capacity of about 80 000 cubic metres; and

A layout plan showing the proposed works is at Enclosure 1.

4. Subject to funding approval of the Finance Committee (FC), we plan to commence the proposed works in August 2013 for completion in September 2017.

5. We will retain the remainder of 13GB in Category B, which covers the construction works for the proposed BCP buildings and associated facilities. Funding will be sought to dovetail with the implementation programme of the project.

/JUSTIFICATION ….. PWSC(2012-13)49 Page 3

JUSTIFICATION

6. The SZ River is the boundary river between the Hong Kong Special Administrative Region (HKSAR) and the SZ Municipality. To alleviate the perennial flooding problem in Yuen Long and North District, a section of SZ River with a total length of 13.5 km from Ping Yuen River to SZ Bay has been upgraded under stages I, II and III of the regulation of SZ River projects completed in 1997, 2000 and 2006 respectively. To provide flood protection for the proposed BCP 1 and the adjacent areas, a feasibility study jointly commissioned by the HKSAR Government and the Shenzhen Municipal Government (SZMG) was completed in December 2009. It revealed that the existing section of SZ River between Ping Yuen River and Pak Fu Shan can just withstand a rainstorm with a return period2 of one in two to five years, which only meets the flood protection standard for agricultural land uses. To facilitate development of the BCP project, the above section of SZ River has to be upgraded3 to withstand a rainstorm with a return period of one in 50 years. A water storage basin will be constructed to attenuate the peak flow so as to reduce the rate of discharge to the downstream of SZ River during heavy rainstorms.

FINANCIAL IMPLICATIONS

7. We estimate the cost of the proposed works4 to be funded by the HKSAR Government is $595.1 million in MOD prices (please see paragraph 8 below), broken down as follows5 –

/(a) …..

______

1 The HKSAR Government and the SZMG jointly announced after the second meeting of the Hong Kong-Shenzhen Joint Task Force on Boundary District Development in September 2008 the implementation of the Liantang/Heung Yuen Wai BCP for operation in 2018.

2 “Return period” is the average number of years during which a certain severity of flooding will occur once statistically. A longer return period means a rarer chance of occurrence of a more severe flooding.

3 The proposed river regulation works mainly cover widening and deepening of the section of SZ River between Ping Yuen River and Pak Fu Shan.

4 In September 1992, a Joint Working Group was set up between HKSAR Government and SZMG to oversee the implementation of the regulation of the SZ River. The Joint Working Group agreed in January 2011 that funding for regulating SZ River should be equally shared between the two governments pursuant to the arrangement for stages I, II and III of the regulation of SZ River projects.

5 Figures only reflect the HKSAR Government’s share of the cost.

PWSC(2012-13)49 Page 4

$ million

(a) Construction works 366.2

(i) river channel 291.0

(ii) water storage basin 28.6

(iii) ancillary works 46.6

(b) Environmental mitigation 43.6 measures and environmental monitoring and audit (EM&A) programme

(d) Contract management and 23.5 supervision cost7

(e) Contingencies 43.6

Sub-total 479.9 (in September 2012 prices) (f) Provision for price adjustment 115.2

Total 595.1 (in MOD prices)

/8. …..

______

6 The total consultants’ fees for the design of the proposed river improvement works is $16.6 million, of which $6.0 million is for professional services during the construction stage. Hence, our share of the cost is $3.0 million.

7 The estimated cost of contract management and supervision to be shared by the HKSAR Government is $23.5 million, i.e. 5.7% of the cost of the proposed works. PWSC(2012-13)49 Page 5

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

Price $ million adjustment $million Year (Sept 2012) factor (MOD)

2013 – 2014 44.0 1.06250 46.8

2014 – 2015 95.2 1.12625 107.2

2015 – 2016 108.9 1.19383 130.0

2016 – 2017 105.9 1.26545 134.0

2017 – 2018 48.9 1.34138 65.6

2018 – 2019 38.5 1.41180 54.4

2019 – 2020 38.5 1.48239 57.1

479.9 595.1

9. We have derived the MOD estimates on the basis of the Government’s latest set of assumptions on the trend rate of change in the prices of public sector building and construction output for the period from 2013 to 2020. The proposed works will be tendered through a competitive bidding basis. As there is no price adjustment factor that can be applied in common to both HKSAR and SZ, we have agreed with the SZMG that there will be no price adjustments in the cross-border river improvement works contracts to avoid contractual difficulties and disputes.

10. Following the practice in stages I, II and III of the regulation works, we have agreed with the SZMG that each side will be responsible for the maintenance of its own embankment and associated structures, while future maintenance of the SZ River including dredging of the river channel will remain a joint undertaking. We estimate the annual recurrent expenditure to be borne by the HKSAR Government to be $4.1 million.

/ENTRUSTMENT …..

PWSC(2012-13)49 Page 6

ENTRUSTMENT ARRANGEMENTS

11. Since the proposed river regulation works and the ancillary works straddle Hong Kong and SZ, it is neither practicable nor cost-effective for each side to implement separately the proposed works falling within its own territory. Both governments agreed to employ a single contractor to carry out the proposed works. Taking into account the problems associated with access to the site and the existing usage and management of the SZ River, and to achieve effective contract management and carry out the daily supervision of the construction works, we plan to entrust the proposed works in paragraph 3 to the SZMG for implementation, subject to funding approval of the FC and internal procedures being cleared. The Shenzhen River Regulation Office (the Office) of the SZMG will take up the role of the employer of the works contracts and be responsible for inviting tenders for the works contracts on the basis of tender documents agreed between the HKSAR Government and the SZMG. Qualified contractors of both sides will be invited to submit tenders for the works contracts. The Office will be responsible for daily supervision of 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 formed by the HKSAR Government and the SZMG. The river regulation works for SZ River stages I, II and III have been smoothly completed under similar arrangements.

PUBLIC CONSULTATION

12. We consulted the Ta Kwu Ling District Rural Committee, the North District Council and the Concern Group on the Construction of Liantang BCP of the North District Council on 8 April 2011, 14 April 2011 and 12 October 2012 respectively. Members generally supported the implementation of the proposed works.

13. We consulted the Legislative Council Panel on Development (the Panel) on two funding proposals8 of the project on 30 October 2012. The Panel agreed that the proposals should be submitted to the Public Works Subcommittee (PWSC) for consideration. Whilst Members did not raise any objection to the proposed works, some Members did not support the proposed BCP and expressed concerns on the justification, design and land resumption issues of the BCP. We

/submitted …..

______

8 The funding proposals are for carrying out (a) the proposed works; and (b) the design and site investigations of the buildings works and the associated facilities of the BCP.

PWSC(2012-13)49 Page 7

submitted an information note to the Panel to address Members’ concerns on 20 November 2012 and attached as Enclosure 4 to PWSC(2012-13)379 discussed at the PWSC meeting on 28 November 2012.

ENVIRONMENTAL IMPLICATIONS

14. The regulation of SZ River between Ping Yuen River and Pak Fu Shan is a designated project under Schedule 2 of the Environmental Impact Assessment (EIA) Ordinance (Cap. 499) and an Environmental Permit (EP) is required for the construction and operation of the project. The EIA report for the project was approved on 22 March 2011 with conditions under EIA Ordinance and an EP was issued on 21 November 2011. The EIA report concluded that the environmental impact of the project can be controlled to within the criteria under EIA Ordinance and the Technical Memorandum on EIA Process.

15. We will implement the mitigation measures and the EM&A programme during the construction and operation stages of the project as set out in the approved EIA report, such as landscape planting, watering of the site, covering of materials on trucks, and use of silenced construction plant. We have included $43.6 million (in September 2012 prices) in the project estimate for the implementation of the environmental mitigation measures and the EM&A programme to be funded by the HKSAR Government.

16. At the planning and design stages, we have considered ways to optimise the design and construction sequence in order to reduce the generation of construction waste where possible. In addition, we will require the contractor to reuse inert construction waste (e.g. use of excavated materials for filling within the site) on site or in other suitable construction sites as far as possible, in order to minimise the disposal of inert construction waste at Huangmao Dao in Zhuhai. We will encourage the contractor to maximise the use of recycled / recyclable inert construction waste, and the use of non-timber formwork to further reduce the generation of construction waste.

/17. …..

______

9 On 11 January 2013, the FC approved the upgrading of part of 13GB to Category A as 20GB “Liantang/Heung Yuen Wai Boundary Control Point and associated works – Boundary Control Point buildings and associated facilities – pre-construction consultancy services”. PWSC(2012-13)49 Page 8

17. We estimate that the proposed works will generate in total about 1.02 million tonnes of construction waste. Of these, we will reuse about 0.06 million tonnes (5.9%) of inert construction waste on site and deliver 0.94 million tonnes (92.1%) of inert construction waste to Huangmao Dao in Zhuhai. We will dispose of the remaining 0.02 million tonnes (2.0%) of non-inert construction waste at SZ landfills. The total cost for accommodating construction waste at Huangmao Dao in Zhuhai and SZ landfill sites is estimated to be $84.4 million for the proposed works (based on a unit cost of $89 per tonne for disposal at Huangmao Dao and $37 per tonne at SZ landfills).

HERITAGE IMPLICATIONS

18. The proposed works 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

19. We have resumed a total of about 12 451 square metres (m2) of private agricultural land and have cleared about 80 200 m2 of government land for the proposed works. All the three structures affected by the proposed works were of non-domestic nature. As such, no re-housing commitment is required. We will charge the cost of land resumption and clearance estimated at $123.86 million to Head 701 – Land Acquisition. A breakdown of the land resumption and clearance costs is at Enclosure 2.

BACKGROUND INFORMATION

20. We upgraded 13GB to Category B in July 2008.

21. On 9 January 2009, the FC approved the upgrading of part of 13GB to Category A as 14GB “Liantang/Heung Yuen Wai Boundary Control Point and associated works – investigation and preliminary design” at an approved project estimate (APE) of $89.0 million in MOD prices for carrying out the investigation and preliminary design for the development of the BCP. The preliminary design was completed in December 2010.

/22. …..

PWSC(2012-13)49 Page 9

22. On 30 April 2010, the FC approved the upgrading of another part of 13GB to Category A as 16GB “Liantang/Heung Yuen Wai Boundary Control Point and associated works – village reprovisioning works” at an APE of $51.3 million in MOD prices to provide a village resite area with supporting infrastructure for reprovisioning of the existing Chuk Yuen Village to make way for the construction of the BCP. Construction was substantially completed in March 2012.

23. On 18 February 2011, the FC approved the upgrading of another part of 13GB to Category A as 17GB “Liantang/Heung Yuen Wai Boundary Control Point and associated works – detailed design and ground investigation” at an APE of $265.8 million in MOD prices for carrying out the detailed design and ground investigation for the development of the BCP and the associated SZ River improvement works. The detailed design of the BCP site formation and the connecting road was completed in April 2012, and the detailed design of the SZ River improvement works has been substantially completed in early 2013.

24. On 6 January 2012, the FC approved the upgrading of another part of 13GB to Category A as 18GB “Liantang/Heung Yuen Wai Boundary Control Point and associated works – reprovisioning of boundary patrol road and associated security facilities” at an APE of $393.5 million in MOD prices for the reprovisioning of a section of boundary patrol road and the associated security facilities for the development of the BCP. Construction commenced in March 2012 for completion in early 2015.

25. On 13 July 2012, the FC approved the upgrading of another part of 13GB to Category A as 19GB “Liantang/Heung Yuen Wai Boundary Control Point and associated works – site formation and infrastructure works” at an APE of $16,253.2 million in MOD prices for carrying out the site formation and infrastructure works (including the new road connecting Fanling Highway and the proposed BCP) for the development of the BCP. We plan to commence construction in phases in the first half of 2013 for completion in mid 2018.

26. On 11 January 2013, the FC approved the upgrading of another part of 13GB to Category A as 20GB “Liantang/Heung Yuen Wai Boundary Control Point and associated works – Boundary Control Point buildings and associated facilities – pre-construction consultancy services” at an APE of $180 million in MOD prices for undertaking the design and site investigation works for the proposed BCP buildings and the associated facilities. The detailed design and site investigation works will commence in February 2013 for completion in early 2015. /27. ….. PWSC(2012-13)49 Page 10

27. The proposed works do not involve removal, felling or transplanting of trees. We will incorporate planting proposals as part of the proposed works, including the planting of about 450 trees.

28. We estimate that the proposed works will create about 155 jobs (125 for labourers and another 30 for professional/technical staff), providing a total employment of 6 730 man-months.

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‹‰¶/»›Ø¶‡f⁄⁄'P»‹û⁄ O« dfl COPYRIGHT RESERVED § approved é¤ date PWP PROJECT NO.13GB (PART) »›·SflO§ƒF‹ DRAINAGE SERVICES DEPARTMENT ¡³office LIANTANG / HEUNG YUEN WAI BOUNDARY CONTROL POINT AND ASSOCIATED WORKS: ˘– ⁄ u GOVERNMENT OF THE HONG KONG REGULATION OF SHENZHEN RIVER STAGE IV DRAINAGE PROJECTS DIVISION SPECIAL ADMINISTRATIVE REGION

Col_pdf_cswp_v8.plt PLOTPEN.TBL $$colortable$$ $$rend_attr$$ c:\temp\dsd_pw\dms07758\szr_090b.dgn A3 420x297 Enclosure 2 to PWSC(2012-13)49

13GB – Liantang/Heung Yuen Wai Boundary Control Point and associated works

Breakdown of the land resumption and clearance costs (for regulation of Shenzhen River stage IV) $ million

(I) Estimated resumption cost 110.49

(a) Agricultural land ex-gratia compensation 110.49

57 agricultural lots (with a total area of 12 451 square

metres (m2)) were resumed

12 451 m2 x $8,873.76 per m2

(please see Notes below)

(II) Estimated clearance cost 2.11

(a) Ex-gratia allowance of crop compensation 1.89

(b) Ex-gratia allowance for farm structures and miscellaneous 0.20 permanent improvements to farms

matters, e.g. Tun Fu ceremonial fee

(III) Interest and contingency payment 11.26

(a) The interest payment on various ex-gratia compensations for 0.0011 private land

(b) Contingency on the above costs 11.26

Total 123.86

Notes

1. There are four ex-gratia compensation zones, namely Zones A, B, C and D, for land resumption in the New Territories as approved by Executive Council in 1985 and 1996. The boundaries of these zones are shown on the Zonal Plan for Calculation of Compensation Rates. The land resumed in the project 13GB was agricultural land within Zone A.

2. In accordance with G.N. 6195 dated 9 September 2011 on the revised ex-gratia compensation rates for resumed land, the ex-gratia compensation rate of agricultural land for Zone A is 120% of the Basic Rate at $687 per square foot (or $7,394.80 per m2). Hence the ex-gratia compensation rate used for estimating the resumption cost of the 57 lots affected by 13GB is $8,873.76 per m2.