193. Head 194 - Water Supplies Department. Subhead 115. Fuel and lubricating oil. The Water Supplies Department has 20 diesel-operated pumping stations for which light diesel fuel oil is supplied under a Govern Supplies Department contract. A recent audit review of the ordering system for the fuel oil in the Water Supplies Department revealed that signed order forms were issued by the department to the contractor before actual requirement and hence without specifying the delivery date, the contractor being notified later by telephone by the pumping station staff of the actual delivery date. The average lapse of time between the issue of order forms and the delivery of the fuel oil to the pumping stations for the period September 1983 to April 1984 was 30 days whereas according to the terms of the contract which expired on 29 February 1984, delivery should be made within seven days of the receipt of the order by the contractor. Because of the lapse of time between placing orders and actual delivery, 69 signed order forms involving the purchase of 784 000 litres of light diesel fuel oil were held by the contractor at the expiry date of the contract on 29 February 1984 pending notification of the delivery date. As a result of a lower unit price being obtained under the new contract commencing on I March 1984, additional costs amounting to $188,000 were incurred.
194. In response to my enquiry, the Director of Water Supplies has informed me that he agrees with my findings and that revised ordering procedures have been adopted since January 1985. Under the revised procedures the despatch of orders to the contractor has been streamlined and orders specifying the date of delivery are issued only when fuel oil is needed, the contractor being required to deliver the fuel oil as soon as the order is received. In addition three inspectors, one for Hong Kong Island, one for Kowloon and one for the New Territories, have been made responsible solely for monitoring the ordering process from the issue of the order to delivery to the pumping stations and they have been advised to exercise greater care in monitoring fuel oil orders generally, especially during the changeover period of fuel oil
contracts.
DEVELOPMENT LOAN FUND
195. Housing Loans. A satisfactory reconciliation has not yet been rendered in respect of the following loan account:
Local Government Officers - Housing Schemes at Lung Cheung Road and Ngok Yue Shan and Co-operative Housing Loans at 7% p.a., repayable over 20 years.
$9,700,920.19
CAPITAL WORKS RESERVE FUND
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196. Head 705 - Engineering. Transport Railways. The modernization and electrification of the Kowloon-Canton Railway gave rise to the need to remodel the railway stations along the railway line from Kowloon to Lo Wu, and in August 1980 a civil works contract in the sum of $9 million was let for improvements to the University Station. The improvements included the reconstruction of both the seaward and landward platforms of the station to meet the heights and standards necessary for the introduction of the electrified system. The contractor commenced by reconstructing the seaward platform which was opened in February 1981 and work began immediately on the landward platform. Following a period of heavy rain in March 1981, substantial settlement occurred at the southern end of the seaward platform and in the subsequent months further subsidence caused extensive cracking to the newly completed structure. In June 1981 the landward platform was opened but as a result of the difficulties encountered with the seaward platform, it was completed only to a temporary standard and soon after similar settlement, though less serious, also occurred.
197. Following completion of the two platforms a second site investigation was carried out to ascertain the cause of settlement and it was concluded that the most significant cause of the settlement was the compression of a layer of marine deposits below the level of the existing embankment although there may also have been other processes at work. Remedial works, which included a major change in design from the use of gravity walls to piled foundations, were then carried out as an extension to the contract and the contract sum was increased from $9 million to $20 million, of which $7 million was attributable to the remedial works. The final account of the contract, which included extra costs of $2 million because of the subsidence and the resultant delays in completion of the contract, was settled in January 1984.
198. An audit review to ascertain the reasons for the problems encountered in the contract revealed that the initial site investigation did not include any laboratory testing and that the prescribed procedures requiring the submission of the design of the civil works for geotechnical checking had not been complied with by the Railway Division of the Engineering Development Department despite repeated requests for information from the Geotechnical Control Office.
199. The Director of Engineering Development has expressed the view that the initial site investigation was adequate to give sufficient information to the project engineer on whether comprehensive soil tests would be necessary, taking into consideration the fact that the existing embankment had been stable over the past seventy years and that changes to the length and level of the platform on the embankment were minimal. The Director has also expressed the view that, whilst compared with the second site investigation, the initial one may appear to have been inadequate, the two were different. The first was intended to provide essential information of the subsoil upon which the embankment had stood for some seventy years whilst the second one had to be thorough and searching to find out the cause of the settlement from all possible angles and also to provide the most economical remedial measures. The Director has stated that the modernization and electrification of the Kowloon-Canton Railway required the construction and reconstruction of 19
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