1 Rising construction costs force 35 projects to seek extra funding
Olga Wong, SCMP 17 October 2008
The surge in construction costs in the past year has forced the administration to seek an additional HK$2.8 billion from the Legislative Council to complete 35 big public works projects, the Development Bureau said.
In a paper submitted to Legco's development panel, it said the funding approved earlier was insufficient and a wide range of projects could be held up.
Of those affected, 25 have been started, eight have been put out to tender and the other two will be put out to tender next month.
The two projects that will be tendered next month are a human research institute for the University of Hong Kong and a student hostel for Chinese University. The costs of these projects have risen 42 per cent and 38 per cent respectively since funding was approved, and require an additional HK$55 million and HK$128 million.
The bureau said funding approval was "highly time-critical".
Among the projects under way are an extension for Prince of Wales Hospital in Sha Tin, construction of the Route 8 expressway between Tsing Yi and Cheung Sha Wan, a waterfront parade in Ma On Shan and a new Customs and Excise Department headquarters in North Point.
Construction costs for the hospital extension had risen 15 per cent, or HK$288.6 million. The cost of Route 8 had risen 8 per cent, or HK$600 million, the bureau said.
The government anticipated materials prices would fall at the time Route 8 was approved, it said.
The biggest cost underestimation occurred on a project to extend the network of footbridges in Tsuen Wan. It will cost 54 per cent more than expected. The next-biggest cost blowout involves restoration work on landfills in the northwestern New Territories and at Gin Drinkers Bay in Kwai Chung. Costs have risen 51 per cent.
Increases in material prices and labour costs have given rise to two problems. Projects under construction have a price-fluctuation provision in the contract, and the funding approved will not be enough to meet the price adjustments. Tenders for projects not yet started far exceed the funding allocated for them.
Government figures show the cost of steel has risen 48 per cent since January, 90 per cent since July last year and 150 per cent since January 2007.
Civil engineer Greg Wong Chak-yan said the extra funding was needed despite the looming impact of the global financial crisis. "Some contractors have already bought construction materials and some contracts have already been awarded.
"A sharp increase in construction costs is unavoidable unless the government postpones the tendering for some projects," he said.
Peter Wong Yiu-sun, president of the Hong Kong Institution of Engineers, said the sudden rise in construction costs could not have been foreseen. The contingencies in project contracts to cover unforeseeable risks were far from sufficient to cover the surge in construction costs, he said.
Patrick Lau Sau-shing, vice-chairman of the Legislative Council's Finance Committee, said lawmakers would request that the administration explain clearly the cost increases before approving extra funds.
2 Town Planning Board Guidelines revised
Hong Kong Government, 17 October 2008
The Town Planning Board today (October 17) promulgated a set of revised Guidelines for Application for Open Storage (OS) and Port Back-up (PBU) Uses.
A spokesman for the Board said that the revision is the result of a review conducted by the Planning Department on the previous version of the Guidelines (TPB PG-No. 13D) which was promulgated in November 2005.
"Stakeholders, including local communities (e.g. relevant District Councils and Rural Committees), trade associations and concerned green groups, have been consulted in reviewing the Guidelines. Written submissions from trade operators and local people on site-specific reclassification proposals have also been duly considered", the spokesman added.
The Guidelines set out the criteria for assessing planning applications for OS and PBU uses and provide guidance for making such applications. Rural areas in the New Territories covered by statutory plans are classified into four categories under the Guidelines with the intention to channel OS/PBU uses to specific areas, thereby preventing them from proliferating into the much wider unspoiled rural area.
After balancing all the relevant factors, the Board agreed that 13 site-specific reclassification proposals and textual refinements were suitable for incorporation into the Guidelines and promulgation to the public. Of the 13 reclassification proposals, 11 sites are in North-west New Territories (about 102 ha) and two sites in North-east New Territories (about 4.5 ha). Upon reclassification, the Category 1 area where applications would normally receive favourable consideration is increased by about 36 ha, of which about 35 ha is in Ha Tsuen. The increase in Category 4 area, where applications would normally not receive favourable consideration, by about 15 ha, is to reflect the planning intention of the concerned areas that have been rezoned to "Green Belt" on the respective statutory plan.
"In considering possible sites for reclassification, a cautious approach has been taken and the Board has struck a balance between the demands of the trade and the need to minimise adverse impacts on local environment and residents", the spokesman said.
The revised Guidelines (TPB PG-No. 13E) are now available at the Secretariat of the Board at 15/F, North Point Government Offices, 333 Java Road, North Point, Hong Kong (Tel: 2231 4810 or 2231 4835) and the Board's website (www.info.gov.hk/tpb).
Any enquiries on the guidelines may be addressed to the Secretariat of the Board at the above address or by email (tpbpd@pland.gov.hk), or to the Planning Enquiry Counters of the Planning Department (hotline: 2231 5000, email: enquire@pland.gov.hk) at 17/F, North Point Government Offices and 14/F, Sha Tin Government Offices, 1 Sheung Wo Che Road, Sha Tin.
