limitations on cost imposed by the approved project estimate. It was not until the work was substantially com- pleted that a revised estimate was prepared and submitted to Finance Committee for approval, more or less as a fait accompli.
46. The main justification advanced for surrendering the controls which would have been imposed by the normal practice of calling for separate tenders, was that the procedure adopted would be more economical of time and would result in completion of the work some five months sooner. However much of this anticipated saving was dissipated by its taking three months to decide on this course. Final payment for the project was eventually made in September, 1975, over three years after the work had commenced, and a further adjustment payment was made in March, 1976, but it remains to be seen if these conclude the saga for there are now indica- tions that maintenance works since the project was completed have included items which would not normally be anticipated so soon after such major restoration and that maintenance costs may remain at a high level in future.
47. Head 71-Public Works Non-recurrent: Buildings. Subhead 982. Fitting out of premises. In paragraph 22 above I refer to comments which I have previously made on long delays which have occurred between the leasing of office accommodation by Government and its occupation by departments, leading to substantial amounts of rent being paid for vacant offices. Following those comments new procedures were introduced to overcome the problems of the time and to secure earlier occupation of newly leased accommodation. Nevertheless, during the year under review, a case was noted in audit in which a period of over 10 months elapsed between the com- mencement of a 36-month lease and the actual occupation of the accommodation concerned and during which period the rent paid amounted to over $1.9 million. Six months of the hiatus related to the time taken to arrange and execute the fitting out works, which I am informed by the Principal Government Architect was reasonable in view of the extent of the work involved, but before the work was commenced three months had already been spent in awaiting the Government Secretariat's approval to proceed. I have been advised that the approval was not forthcoming because (notwithstanding an awareness that nugatory expenditure was likely to be incurred in substantial amounts unless funds were made available for fitting-out premises already leased) provision had not been made in the relevant vote to meet the fitting-out costs involved. It has been suggested to me by the Secretary for the Civil Service that no actual loss to Government was brought about by the additional delay of three months (during which time the rent paid totalled over $500,000) as "it merely deferred a reshuffle of accommodation amongst departments", a view I find difficult to reconcile with the presumption that there was a need for the accommodation from the date from which it was leased.
48. Head 72-Public Works Non-recurrent: Engineering. Subhead 804. Tai Wor Ping and Pipers Hill inter- changes. Expenditure under this subhead includes an amount of $276,122 paid to a contractor in settlement of a claim for delay in his obtaining access to a portion of the site of works, which I have suggested to the Principal Government Land Agent would not have occurred if established procedures had been properly followed. Due notice of the need to acquire the land concerned was given by the Highways Office of the Public Works Department to the Crown Lands and Survey Office before the contract was awarded, but largely as the result of protracted negotiations with the owner, possession of the land was not obtained until five months after the contract had commenced. The procedures to permit land required for Government development schemes to be acquired under the Crown Lands Resumption Ordinance are designed to enable sites to be made available in sufficient time for Government to meet its contractual obligations and had these procedures been followed the reversion of the land to Government by the requisite date could have been assured and the expenditure on the claim thereby avoided.
49. Head 74-Public Works Non-recurrent: Waterworks. Subhead 901. High Island water scheme. Following my previous report in which I referred to various questions which I had raised on the criteria and authority for the payment of compensation to villagers whose lands and homes were affected by the High Island water scheme, I have examined the terms of the compensation granted (similarly without the specific approval of the Finance Committee of the Legislative Council) to fishermen said also to have been affected by the scheme. The registra- tion of fishermen carried out at the end of 1971 after the announcement of the intended closure of the Kwun Mun Channel, found that of the 286 families who applied for compensation, only 125 had justifiable claims. Of these 24 were categorized in “Group A” as losing their habitation and all or most of their livelihood and 101 in “Group B" as being affected to a lesser degree, the remaining group of 161 being unaffected. In July, 1975, 77 families in this last group were reclassified into "Group B", raising the total financial commitment for compensation by way of cash allowances and housing from the original figure of approximately $9.8 million to an estimated $13.3 million.
50. The 24 families in "Group A" received compensation valued at $5.4 million, comprising cash allowances of $2,296,200 and the building costs of 30 two-storey houses, allocated on a basis of one per family plus an addi- tional 6 houses for 4 very large families. The cash component of this compensation was apparently given in consideration of one element of the criteria referred to above, namely that the families had been deprived of all
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