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1. Cuts mean difficult times for building

2. Reclamation project 'will not be redrawn'

3. LCQ13 : West Rail achieves high reliability

4. Doubts raised over land sales forecast

1. Cuts mean difficult times for building
Keith Wallis, The Standard 11 March 2004

The construction industry is facing hard times after analysis of the budget shows the government has slashed funding for new projects by about 60 per cent.

The estimates show the administration will seek HK$930.57 million in first-time funding in the next financial year for projects worth just HK$25.93 billion.

These are projects that will either go out to tender or start on site in the financial year starting in April. They are a future workload barometer for the construction sector.

By comparison, the government earmarked HK$2.8 billion in initial funding in the current financial year for schemes worth HK$60.75 billion.

The HK$930 million is included in the HK$30.17 billion Financial Secretary Henry Tang said would be spent on infrastructure projects this coming year.

Subtracting the cost of the planned new works from the overall total means about HK$29 billion will be spent on current projects such as Route 9 highway and the third phase of the Central reclamation. The cost of these schemes, like the new projects, will be spread over several years.

It is these massive projects which have helped increase infrastructure spending by 14 per cent this year in real terms compared with the HK$26.36 billion in the original 2003-04 estimate.

But the figures show infrastructure spending faces a dramatic decline in the longer term. Just a handful of big-ticket items are planned including some rolled over from last year.

Big projects include the HK$7.85 billion reconstruction of Sha Tin water treatment works for which the government plans to seek HK$13 million in first-time funding.

It also plans to spend HK$19.65 million to kickstart the HK$3.97 billion redevelopment of the north apron area at the former Kai Tak airport. This is one of the projects rolled over from previous years.

Other major schemes set to start after April include the HK$2.72 billion reconstruction and improvement of Tuen Mun Road on which the government is planning to spend HK$16.63 million in the next financial year.

About HK$78.4 million is earmarked for the HK$821 million Castle Peak Road improvement between Ka Loon Tsuen and Siu Lam. The Highways Department has just awarded a HK$608 million contract for the scheme to Gammon Skanska.

Other projects are relatively small scale.

2. Reclamation project 'will not be redrawn'
CHLOE LAI, SCMP 11 March 2004

The government will not refer the Central reclamation project back to the Town Planning Board for public consultation as a matter of principle, sources said yesterday.

Doing so would set a precedent under which approved government projects could be sent back to square one under public pressure.

"Town planning always has many vested interests," said a source close to the reclamation project.

"If the chief executive in council can refer the plan back to the Town Planning Board because of public pressure, this might happen again if some very important and influential people ask for it. They can manufacture public pressure as well."

Mr Justice Michael Hartmann ruled on Tuesday that the chief executive had ultimate powers in the planning process, thus giving the green light to the government's plan to reclaim 18 hectares of land off the Central waterfront. This is to build a bypass linking Causeway Bay with Central to ease traffic in the business district.

He did not consider the question of whether the government was right to proceed with the reclamation, leaving critics to demand that planning officials reconsider the plan and consult the public.

Mr Justice Hartmann had said: "It may well have been preferable to remit the plan [to the board], at least regarding the extent of reclamation."

But the source said that would be unlikely because it would mean the process of making statutory plans would have to start again, which would take "at least 14 months".

There were also "good administrative considerations".

"This is not just a matter of how long this would take, which creates another delay to the entire project so the government has to compensate the contractor.

"This is a technical issue. There is a more important aspect which is that it is a matter of principle."

Another source said that unlike the Wan Chai reclamation plan - which is still being drafted - the Central plan could not be redrawn.

"The Central plan is an approved plan," this source said. "It is very different from the Wan Chai plan, which was sent back to the Town Planning Board. The Wan Chai plan is just a drafted plan.

"An approved plan only refers back to the drawing board when policies change."

In the High Court case it lost, the Society for the Protection of the Harbour sought an order that the Executive Council send the plan back to the Town Planning Board.

Permanent Secretary for Housing, Planning and Lands Carrie Lam Cheng Yuet-ngor said the Central reclamation project was an integral part of board strategy on the development of the business district. She estimated that the Central bypass will be completed on time, either in 2011 or 2012.

When an approved plan is sent back to the Town Planning Board, the board will ask the Planning Department to review the plan.

The time to complete the review ranges from one year to several years.

3. LCQ13 : West Rail achieves high reliability
Hong Kong Government, 10 March 2004

Following is a question by the Hon Lau Kwong-wah and a written reply by the Secretary for the Environment, Transport and Works, Dr Sarah Liao, at the Legislative Council meeting today (March 10) :

Question :

It has been reported that a number of incidents involving malfunctioning of the signalling system occurred in West Rail ("WR") in the past two months, causing disruption to and even suspension of train service. In this connection, will the Government inform this Council if it knows:

(a) the total number of incidents involving malfunctioning of the signalling system which affected train operations since the opening of WR, together with a detailed chronology of these incidents;

(b) the reasons for the above incidents; and

(c) whether the Kowloon-Canton Railway Corporation has measures to reduce the occurrence of similar incidents?

Reply :

Madam President,

West Rail has been operating smoothly since its opening on December 20, 2003. The system now achieves a high reliability with average service delivery rate at 99.8% and a punctuality rate at 99.4%.

Like most new railways, West Rail has experienced some initial teething problems relating to the signalling system at certain sections of the railway. During these incidents, while train speed had to be reduced at certain sections, continuous train service was maintained to meet passenger demand. Moreover, operation safety was not affected. A table showing the details including the cause and remedial measures of the signalling-related incidents occurred since West Rail opening is at Annex.

To continuously improve the reliability of the signalling system, Kowloon-Canton Railway Corporation (KCRC) has conducted thorough investigations into the causes and taken remedial measures to minimise recurrence of similar incidents. Apart from replacing the faulty equipment, KCRC has embarked on comprehensive checking on related equipment and facilities, and identifying ways to accelerate the recovery of services and minimise the impact on train services. The Hong Kong Railway Inspectorate and the Transport Department will continue to closely monitor the safety and service levels of West Rail respectively.

4. Doubts raised over land sales forecast
Raymond Wang, The Standard 11 March 2004

The Financial Secretary's forecast of HK$11.98 billion in land sales income in the 2004-05 fiscal year is too conservative, property market experts said.

Although the government figure represents a 147 per cent increase over revised income of HK$4.85 billion in 2003-04, it does not take into account the rebound in the real estate market, they said.

Revenue from public auctions and tenders is expected to reach HK$4.56 billion in 2004-05, representing about 38 per cent of the estimated total land sales income, Financial Secretary Henry Tang said.

The other 62 per cent would come from land premiums and land modifications.

Midland Realty chairman Freddie Wong forecast land sales would contribute more than HK$16 billion as developers are replenishing land banks as confidence grows in the market.

``The government's estimation of about HK$12 billion is too conservative,'' Wong said. ``Transaction volumes in both the primary and secondary markets are increasing. The market is improving with or without any help from the government.''

Chung Sen Surveyors director Cheung Wing-ming said residential sites slated for auction from the government's application list could yield close to HK$20 billion.

The valuation for the 14 sites is based on property price rises this month. The 14 lots, totalling 10.5 hectares, were among 17 sites released in January when the government decided to resume land sales after a 13-month suspension.

Cheng, however, said estimated land sales revenue would still be far below the market peak in 1997 when HK$70 billion was raised, representing more than 20 per cent of the government's overall income that year, compared with a contribution of just 1 per cent this fiscal year.

SK Pang Surveyors managing director Pang Shiu-kee said the higher land sales revenue - mainly from auctions of land from the application list - and premiums and land modifications in the next fiscal year could help relieve the deficit.