For information FCRI(2007-08)2

NOTE FOR FINANCE COMMITTEE

Implementation of Capital Works Projects

PURPOSE

This note outlines the general process and procedures on

implementation of Government capital works projects, in particular the steps and
requirements for the project proponents (usually a government department) and the
works agents to take forward the project for funding approval by the Finance
Committee (FC).

CAPITAL WORKS PROGRAMME

2. In short, there are four categories of project items under the Capital
Works Programme (CWP), namely, Category A, Category B, Category C and
Category D.

3. Category D items are essentially minor works projects or standalone

studies funded by the 22 works-related block allocations under the Capital Works
Reserve Fund (CWRF). (Except for Subhead 5001BX – Landslip Preventive
Measures, the cost of each project must not exceed $15 million).

4. A project proposal attains Category C status any time of the year

upon submission of a Project Definition Statement (PDS) prepared by client bureau;
and a Technical Feasibility Statement (TFS)Note prepared by the works department
and approved by the Works Branch of the Environment, Transport and Works
Bureau (ETWB). Under the annual Resource Allocation Exercise (RAE), policy
bureaux would submit bids for the funding required to implement Category C items
which are expected to incur expenditure in the next five-year cycle. Bids approved
will then attain Category B status.
/5. .....

Note
The purpose of the TFS is to establish the technical feasibility on a prima facie basis,
define the scope of works, and provide a rough cost estimate and the cash flow
requirements. Works departments are expected to compile a TFS within four months upon
receipt of PDS and normally without recourse to external consultancy. TFS is not
required for projects which are themselves studies (e.g. EIA and site investigation) or
renovation works.
 FCRI(2007-08)2 Page 2

5. In considering funding bids under the RAE (which normally takes

place in summer), we would examine the project justifications, urgency, cost-
effectiveness, economic benefits, engineering feasibility and budgetary
affordability (including the long-term recurrent costs). In determining the funding
priority of individual projects, we also take into account the priority accorded by
policy bureaux having regard to their policy objectives. In the light of
Government’s pledge to set aside an average amount of $29 billion each year for
CWP expenditure, we have made available sufficient resources to fund all
justifiable capital works projects under planning and exercised the greatest
flexibility possible to earmark funding so as to allow more projects to commence
the planning, design and other preparatory work. An in-year bid mechanism is also
in place to cater for urgent projects which need to acquire Category B status in
between two RAEs. One example is the complementary sewage treatment works
required for the Redevelopment of Ocean Park which was approved by the FC in
mid-2006. In June 2005, FC also approved the funding for the conceptual design
and advance technical studies for the Hong Kong-Zhuhai-Macao Bridge project.

6. Once a project attains Category B status, works department can start

incurring expenditure on pre-construction work required before seeking FC’s
funding approval i.e. upgrading to Category A. Such pre-construction work
includes site investigations, preliminary/detailed design, environmental impact
assessment (EIA), traffic impact studies, statutory gazettal procedures and tender
preparation, which are usually funded under the appropriate CWRF block
allocations as a Category D item. Where the expenditure of the pre-construction
work exceeds $15 million, we would seek FC approval for part-upgrading the
project item to Category A to fund the pre-construction work required.

7. We have previously issued to the Public Works Subcommittee

(PWSC) an information note under reference PWSCI(2001-02)37 (copy at
Encl. Enclosure) to set out the administration and planning procedures for
implementation of capital works projects, and the measures taken by the
Administration to accelerate project delivery. The actual lead time required for
completing the pre-construction work required varies amongst projects, depending
on the scope and complexity of works involved and whether statutory procedures
like the EIA Ordinance are applicable or land resumption is required. The
Administration would keep these measures and related procedures under constant
review to further ensure the expeditious implementation of capital works projects.
From time to time, ETWB promulgated technical guidelines to works departments
for speeding up the various stages of the planning and design work
(e.g. consultancies).

/SUBMISSION .....
FCRI(2007-08)2 Page 3

SUBMISSION TO FINANCE COMMITTEE (FC) AND PUBLIC WORKS

SUBCOMMITTEE

8. Upon completion of the detailed design and other preparatory work

required and consultation with the relevant Legislative Council (LegCo) panel(s),
policy bureaux could submit the funding request to PWSC/FC for upgrading the
project to Category A. In order to minimise the lead time for commencement of
construction works, Directors of Bureaux and their Permanent Secretaries (if the
latter are so authorised) may allow the tender process to proceed in parallel with
the funding application to PWSC/FC so as to bring forward the commencement
date as much as possible.

9. The PWSC meets roughly once or twice a month, except for the
holiday breaks and the period when the Special FC sessions on the annual Budget
are held. In October each year, we present to PWSC a forecast of the projects
planned to be upgraded to Category A in the forthcoming LegCo session. This
facilitates the relevant policy bureaux and LegCo panels to coordinate the timing
for consulting the panels on the funding proposals before submission to PWSC.

10. At the end of each LegCo session, we submit to PWSC a year-end

report summarising the capital works projects which have been upgraded to
Category A during the session and the deviations between the submissions and the
forecast with brief explanations.

-------------------------------

Financial Services and the Treasury Bureau

April 2007
 Enclosure to FCRI(2007-08)2

For information PWSCI(2001-02)37

NOTE FOR PUBLIC WORKS SUBCOMMITTEE

OF FINANCE COMMITTEE
Information on
The Implementation Programme of a Capital Works Project

Introduction

This note sets out an overview of the administrative and planning procedures
for implementation of capital works projects, for the information of PWSC members.

Acceleration of Project Delivery

2. With the recent implementation of the following measures, the lead time from
inception to commencement of construction of a typical engineering and building
project has been shortened from six years to less than four years -

(a) simplifying the preliminary technical appraisal for admitting

projects into the Capital Works Programme and keeping as far
as practicable the time allowed for such appraisals to four
months;

(b) allowing bureaux to submit funding bids in-year, between the

annual resource allocation cycles;

(c) streamlining procedures for the creation of minor works items

(under $15 million);

(d) allowing Controlling Officers the option to initiate

works-related tendering and consultant selection procedures
before funding is secured. The acceptance of any tender or bid
must still be subject to funding approval and conditions attached
to such;

(e) taking parallel actions for the environmental impact assessment

and gazetting; and

/ (f) ....
PWSCI(2001-02)37 Page 2

(f) streamlining the tender procedures for capital works projects

under $50 million (e.g. dropping the gazettal requirement since
tender notices are published on the Internet) and allowing
Controlling Officers the option to approve tender awards for
straightforward cases under specified circumstances.

The updated flow charts incorporating the above changes for a typical engineering and
building project are attached.

Engineering Projects

3. The flow chart in Enclosure 1 illustrates the main activities involved in the
delivery of a medium size typical engineering project.

4. A capital works engineering project starts with a Technical Feasibility

Statement, which is to be completed within a short time, to confirm the feasibility on a
prima facie basis, define the scope of works and establish the rough order of cost.

5. Once included in the Capital Works Programme, the project enters into the
Preliminary Design Stage for developing the preliminary technical details of the project
and undertaking various impact assessments, including Environmental Impact
Assessment (EIA), Traffic Impact Assessment, and Drainage Impact Assessment. For
projects not sensitive in environmental impacts terms gazetting under statutory
ordinances could be carried out in parallel with EIA and procedures under EIAO.

6. After the preliminary technical details have been affirmed and the procedures of
EIAO completed, the project will move onto the Detailed Design Stage for preparing the
design details and tender documents for the works contracts, with the procedures under
relevant statutory ordinances and land resumption proceeding in tandem.

7. Funding application will also be made in parallel with the detailed design so
that construction on site will commence after completing the tendering procedures.

Building Projects

8. The flow chart in Enclosure 2 illustrates the main activities involved in the
delivery of a medium size building project.

9. The delivery process of a building project is simpler than that of an engineering

project as a building project is normally less sensitive in environmental impact terms
and often does not require land resumption.

/ 10. ....
PWSCI(2001-02)37 Page 3

10. In general, the foundation works of a building project will start at about two
years after inception and the superstructure works will commence after the completion
of the foundation.

---------------------------------------

Works Bureau
November 2001
 Enclosure 1 to PWSCI(2001-02)37
Years (年)
0 1 2. 3 4 5 6 7

Note: This chart portrays main actions from inception to construction phase of a
Technical Feasibility Assessment 技術上的可行性評估 medium size project. For a large or complex project, more time will be
required for detailed feasibility studies and environmental impact assessment,
consultations with LegCo/District Councils/other relevant bodies and/or land
Entry into Capital Works Programme 納入基本工程計劃 resumption, depending on the complexity of the project.

註 ： 本圖表列示一項中型工程由構思到施工階段的主要活動。少數非常大型或
複雜工程，則需要進行詳細可行性研究及環境影響評估，多次諮詢
Employment Preliminary Design 初步設計
of Consultant 立法會／區議會／有關團體及/或收地程序 。因此，所涉及的時間會加長
雇用顧問 ，這要視乎 每項工程的複雜情度而定。
Relevant Impact Assessment and Statutory
Procedures 相關的影響評估及法定程序

Gazetting, Resolving Objections and Authorization under Relevant Ordinances

刋憲, 處理反對意見及獲當局授權

Land Resumption and Clearance 收地及清拆

Part Upgrading to Cat A for Employment

Extra time required for difficult cases
of Consultant for Detailed Design
因應困難個案所需的時間
為詳細設計將工程部分撥款提升到甲級
Detailed Design and Tender Documentation
詳細設計及擬備招標文件

Upgrade to Category A 將工程撥款提升到甲級

Tendering 招標

Construction 施工

0 1 2 3 4 5. 6 7
Years (年)

Flow Chart A - Programme of a Typical Medium Size Public Engineering Project

流程表A - 一般中型工務工程的實施程序
 Enclosure 2 to PWSCI(2001-02)37
Years (年)
0 1 2 3 4 5 6
Note: This chart portrays main actions from inception to construction phase of a
medium size building project. For a large or complex project, more time will be
Technical Feasibility Appraisal 技術上的可行性評估 required for detailed feasibility studies, various impact assessments,
consultations with LegCo/District Councils/other relevant bodies and/or land
resumption, depending on the complexity of the project.
Entry into Capital Works Programme 納入基本工程計劃
註 ： 本圖表列示一項中型工程由構思到施工階段的主要活動。少數非常大型
或複雜工程，則需要進行詳細可行性研究， 各項影響評估，多次諮詢
立法會／區議會／有關團體及/或收地程序 。因此，所涉及的時間會
Preliminary Design 初步設計 加長，這要視乎 每項工程的複雜情度而定。

Detailed Design and Tender Documentation for Substructure Works

地基工程部分詳細設計及擬備招標文件

Detailed Design and Tender Documentation for Superstructure

上蓋工程部分詳細設計及擬備招標文件

Upgrade to Category A
將工程撥款提升到甲級

Tender for Superstructure上蓋工程部分招標

Tender for Substructure works
地基工程部分招標

Construction of Substructure
Construction of Superstructure 上蓋工程部分施工
地基工程部分施工

0 1 2 3 4 5 6
Years (年)
Flow Chart B - Programme of a Typical Medium Size Public Building Project
流程表 B – 一般中型工務建築工程的實施程序