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LCQ20: Infrastructure projects in Guangdong-Hong Kong-Macao Bay Area and cost control of public works

Following is a question by the Hon Paul Tse and a written reply by the Secretary for Development, Mr Michael Wong, in the Legislative Council today (July 5):

Question:

When attending a question and answer session of this Council last month, the Chief Executive of the last term pointed out that the development plan for a city cluster in the Guangdong-Hong Kong-Macao Bay Area (Bay Area) would bring about huge and all-encompassing opportunities for Hong Kong people, and he urged Hong Kong people to "seize the opportunities" and "play an active role" in this respect. In addition, he mentioned in his blog that a number of sea-crossing and inter-city infrastructure projects for enhancing the link between the cities in the Bay Area were underway. Among them, those projects involving Hong Kong include the projects to build Hong Kong-Zhuhai-Macao Bridge, the Guangzhou-Shenzhen-Hong Kong Express Rail Link and the Liantang/Heung Yuen Wai Boundary Control Point. However, the works in Hong Kong's territory under the three aforesaid infrastructure projects, as well as a number of major infrastructure projects in Hong Kong carried out in recent years, have repeatedly experienced massive cost overruns. To strengthen the control of construction costs of public works projects, the Development Bureau established a Project Cost Management Office (PCMO) in June last year. In this connection, will the Government inform this Council:

(1) of the number of works projects the cost estimates of which have been reviewed by PCMO so far, and the resultant cumulative savings on construction costs;

(2) whether, in the coming five years, the Government has plans to use Hong Kong's fiscal reserves of over $900 billion to participate in the equity or debt financing for proposed major infrastructure projects in the Bay Area; if so, of the details (including the names of the projects concerned, the amounts of money involved, and the expected return), and whether PCMO can participate in the cost management of such projects; if it has no such plans, the reasons for that; and

(3) whether, in the coming five years, the Government has plans to carry out new cross-boundary infrastructure works projects for linking Hong Kong with other cities in the Bay Area; if so, of the details and how PCMO will assist in the control of the construction costs of such projects?


Reply:

President,

The National Development and Reform Commission (NDRC) and the governments of the Hong Kong Special Administrative Region, the Guangdong Province and the Macao Special Administrative Region (MSAR) are working closely to study the development plan of and constructions in the Guangdong-Hong Kong-Macao Bay Area (Bay Area). We believe that Guangdong, Hong Kong and Macao should coordinate efforts and complement each other's advantages. Through consensus-building, various cities within the Bay Area can distinguish their respective development positioning, with a view to developing the entire Bay Area into a more globally competitive world-class city cluster. Under the witness of President Xi Jinping, we signed the Framework Agreement on Deepening Guangdong-Hong Kong-Macao Cooperation in the Development of the Bay Area (Framework Agreement) on July 1. The Framework Agreement establishes the various key cooperation areas in the development of the Bay Area, including promoting infrastructure connectivity. The Framework Agreement also signifies an important milestone in formulating the development plan for the Bay Area. We will continue to collaborate with the governments of Guangdong Province and the MSAR in accordance with the principle of "one country, two systems" to take forward the development plan of the Bay Area led by the NDRC.

At present, the construction works of various cross-boundary facilities for connecting Hong Kong with the Mainland are in full swing. They include the Hong Kong-Zhuhai-Macao Bridge (HZMB), the Guangzhou-Shenzhen-Hong Kong Express Rail Link and the Liantang/Heung Yuen Wai Boundary Control Point, etc. The commissioning of these facilities will forge a closer link between Hong Kong and the cities in the Bay Area. Moreover, the Development Bureau has considered the positioning of Hong Kong in the regional development of the Bay Area in the strategic planning and conceptual spatial framework under the "Hong Kong 2030+: Towards a Planning Vision and Strategy Transcending 2030" formulated at the end of last year and the Sustainable Lantau Blueprint published last month. Together with Tuen Mun West and Hung Shui Kiu New Development Area (NDA), the various major commercial developments planned in North Lantau, including the Airport North Commercial District, the Topside Development at the Hong Kong Boundary Crossing Facilities Island of the HZMB and the Tung Chung New Town Extension etc., will form the Western Economic Corridor of Hong Kong and serve as a new platform for economic growth. The proposed East Lantau Metropolis will further reinforce the development of this corridor. Apart from North Lantau, the Hung Shui Kiu NDA under planning and the three existing new towns, namely Tuen Mun, Tin Shui Wai and Yuen Long, will be developed as the Regional Economic and Civic Hub of the Northwest New Territories. These developments are expected to have significant interplay with the Bay Area development.

We understand the concerns of the public about the cost overruns of major infrastructure projects in recent years. Indeed, the challenge of high construction costs has beset Hong Kong for many years. Hence, the Government is determined to strengthen the cost management of public works projects. In this connection, the Government established the Project Cost Management Office (PCMO) in June last year to implement cost management measures as well as to lead and coordinate the bureaux and works departments in the implementation of cost control, thereby ensuring that public funds are spent properly and effectively.

My reply to the three parts of the Hon Tse's question is as follows:

(1) Since its establishment in June 2016, the PCMO has reviewed the cost estimates of more than 60 projects amounting to about $170 billion which included government offices, staff quarters, hospitals, schools, parks, roadworks, waterworks and drainage works, and achieved savings of seven to eight per cent, amounting to about $13 billion in project costs

(2) At present, there is no plan to draw on our fiscal reserves in the coming five years to participate in the equity or debt financing for the proposed major infrastructure projects in the Bay Area. Should such a plan be necessary, the Government will give a detailed account to the public as and when appropriate.

(3) Except for the ongoing projects, there are no new cross-boundary infrastructure projects for linking Hong Kong with other cities in the Bay Area under the Capital Works Programme.
 

Ends/Wednesday, July 5, 2017
Issued at HKT 14:30

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