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1. Rail merger can save MTRC $450m

2. On-site plan to prevent Tamar bugs

3. Tamar work plan hit by security concerns

1. Rail merger can save MTRC $450m
CHESTER YUNG, The Standard 23 May 2006

Hong Kong's publicly listed rail operator can save about HK$450 million per year after it merges with the Kowloon- Canton Railway Corp, MTR Corp chief executive Chow Chung-kong has told legislators.

At a joint meeting of the Legislative Council's transport and financial services panels Monday, lawmakers expressed their concerns about fare rises after the merger.

Under the terms of the merger, fares will not rise for the following two years, but after that they will be determined by a formula including inflation indicators such as the consumer price index.

Civic Party legislator Ronny Tong Ka-wah asked if the cost-effectiveness benefits of the merger would translate into fare cuts. Chow replied the merger will lead to reduced operating costs through economies of scale and trimming the overlapping of frontline stuff.

"We can save about HK$450 million a year but this will only happen after three to four years. And the room for fare cuts is about HK$600 million," Chow said, adding the fare reduction will take place on the first day of merger.

Fares of HK$12 or more will be cut by 10 percent and those between HK$8.50 and HK$11.90 by 5 percent. But Unionist Lee Cheuk-yan called the cuts "very trivial" compared with the huge economic gain of the merger.

2. On-site plan to prevent Tamar bugs
Leslie Kwoh, The Standard 23 May 2006

Security fears have prompted the government to stipulate that all concrete structural units for its proposed headquarters at Tamar must be made on-site, despite the potentially higher costs of such a process.

To prevent potential bugging during the construction of the HK$5 billion project, concrete units for the new Central government complex and Legislative Council complex including floors, internal and external walls, beams and staircases will be fabricated under supervision at the site, officials announced Monday.

"This way, we will be able to monitor the entire process from start to end. We feel safer and more confident with this method," said Director of Architectural Services Yue Chi-hang.

To ensure the process is airtight, the government will enlist the aid of the police to conduct checks where necessary, he said.

While Yue could not say how much more on-site fabrication would cost, as opposed to using precast units imported from the mainland, he claimed the difference would be "negligible" as Hong Kong boasts a successful concrete production industry.

Normally, about 30 percent of a development's concrete structural components employ prefabricated units, according to the department.

"It may not be the cheapest way, but it is the necessary way," Yue said.

Other components such as carpeting, windows and doors would not need to be manufactured at the site, as detecting and removing bugs from them would be an easier task, he said.

The on-site requirement will help create an additional 100 construction jobs, bringing to 2,700 the total number of jobs estimated for the project.

The announcement came after pleas from some lawmakers to boost employment in the construction sector by employing locally made units for the project, regardless of cost differences.

The government had previously dismissed the suggestion, insisting that favoring local production would breach an agreement under the World Trade Organization. But officials said Monday they discovered after consulting with the Department of Justice that the WTO agreement allows exemptions for security-related concerns.

Meanwhile, officials confirmed that project designs from the four design- and-build applicants will be showcased to the public at the end of the year. But while public opinion would be "seriously considered" in the awarding of the tender, officials said changes to the winning design were "unlikely."

"If the public expresses a strong opinion, then we are not saying the plans absolutely cannot be changed," said Director of Administration Elizabeth Tse Man-yee. "But we have to keep in mind there are many factors, such as cost, that would make it very difficult for us to make changes."

he government will submit its funding application to the Legislative Council next Monday.

3. Tamar work plan hit by security concerns
CHLOE LAI , SCMP 23 May 2006

Security concerns, including bugging, have led to the government abandoning prefabrication work for the Tamar development that would have been done outside Hong Kong . The decision has created an additional 100 jobs, the administration says.

Director of Architectural Services Yue Chi-hang said construction would be carried out on site to avoid bugging equipment being placed in concrete walls.

He said many of the materials needed for the construction were to have been made in advance and imported, including doors, windows and glass panels.

It would be easier to replace them if bugging equipment was found in these materials, he said.

Prefabrication could have accounted for 30 per cent of the construction work. The latest estimates show that 2,700 construction workers will benefit from the $5.1 billion Tamar project.

Harbour activist Paul Zimmerman claimed the compromise of abandoning prefabrication was a vote-buying tactic that targeted the union representatives in the Legislative Council, ensuring the government a landslide victory.

Meanwhile, officials estimate the public will be able to view the four models of the proposed project by the qualified constructors at the end of the year.

Director of Administration Elizabeth Tse Man-yee said it would not be a public consultation exercise. "The tender has stringent requirements on procedures. It is inappropriate to let the public choose which one they like. I'm sure if the public has strong opinions on the designs, the [selection] panel will hear and incorporate their views."

Ms Tse said the government would hire an independent consultant to gauge public opinion and the selection panel would consider the views gathered. Officials met the press yesterday to explain a document they prepared for the legislature's public works subcommittee, in which they asked lawmakers to approve $5.1 billion for the plan.

The subcommittee will meet next Monday to discuss the funding request.

The document described the proposed headquarters as "modest", despite critics saying they were "excessive", especially the "over-supply" of conference and reception facilities. Ms Tse said: "All the conference facilities we proposed are necessary."

Mr Zimmerman, of the Designing Hong Kong Harbour District group, urged legislators to examine details of the project and consider the views of society.

"Civil society has expressed many concerns and they have also come up with alternative proposals. Legislators should read through the government proposal carefully and consider views the civil society expressed." He also questioned why the government wanted to rush the project.

nly the Civic Party and independent legislator Kwok Ka-ki oppose the funding application.