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PWSC(2012-13)49 on 5 February 2013

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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 (c) ancillary works including drainage and landscaping works. 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 (c) Consultants’ fees for 3.0 construction stage6 (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.
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