C.S. 166
XCC(78)8
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project contingency of 5% in addition to contract contingencies of 10% for civil engineering and 71% for electrical and mechanical contracts. These allowances for escalation and contingencies are consistent with those used in the estimated construction costs for the Modified Initial System, but the Corporation has reason to believe that tender prices have risen since 1975 and particularly in recent months and consider it would be prudent to retain the $70 million saving as an additional contingency sum. Assuming that the Corporation will not be required to pay more in cash for land than was envisaged in memorandum XCC(77)54 (at Annex A), the Corporation, therefore, intends to leave the overall cost of the project as originally estimated in that memorandum. Another factor in favour of leaving the cost as previously estimated is that, as indicated earlier, it is difficult to make a precise evaluation of the reverse effects of not proceeding with Tsuen Wan West.
10
As stated above, most of the area involved for the proposed depot and Tsuen Wan (Central) Station is part of a larger area to be resumed and cleared over the next two years for planned development, much of which will now take place over the depot. An approximate estimate of the resumption and clearance costs of the part of the area required by the Mass Transit Railway is $95 million. Memorandum XCR(78) 40 seeking the Governor in Council's authority for a block resumption of the larger area is also on today's agenda.
11
The siting of the depot in Area 6 will require additional Government expenditure of the order of $10 million on formation (largely to flatten the depot site to one level), $55 million in respect of additional clearances (last sentence of paragraph 4 above and paragraph 5 refer) and $10 million for constructing Tai Ho Road as an elevated structure over the depot instead of at ground level. There will be some savings on expenditure on roads which Government would have had to fund, but which now are to be located on the podium. This saving is approximately $5 million. These orders of cost, which are based on 1977 prices, will be reflected in the premium for the railway portion of the site and the Finance Committee of the Legislative Council will be asked to approve this supplementary expenditure.
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The principal benefit from the location of the depot at Tsuen Wan is the availability of the Kwai Chung site for sale and use as con- tainer back-up areas, thereby delaying the need to provide additional berths or to displace other development in the container terminal area. The location of the depot at Tsuen Wan will also significantly reduce what could have been a very serious environmental problem at Kwai Fong Estate, which would have resulted from access lines to the depot running through the Estate.
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