131. The Director of Technical Education and Industrial Training has accepted that the Vocational Training Council failed to comply fully with procedures by allowing the architects to proceed with the detailed design of the buildings before the sketch plans were approved and that this failure accounted for part of the $7.8 million which the Cou had to pay for abortive designs. The Director has also accepted the need for drawing up a detailed set of building staards and has explained that the Vocational Training Council was under pressure to bring the new institutions into being at an early date and had to set sensible standards of space provision for educational purposes that would enable technical institutes to fulfil adequately their role as providers of post-secondary education. On the other hand, he remains of the opinion that in the absence of a limited competition for the architectural design of the buildings, it would have been difficult for the Council to select an architect who could have produced the most cost-effective solution.
132. The Administration has noted the lesson from these events as explained by the Secretary for Education and Manpower to the Legislative Council in April 1984, "to avoid recurrence of this kind of situation in future, it will be necessary to ensure that from the start design and financial considerations are more closely related."
CAPITAL WORKS RESERVE FUND
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133. Head 703 - Buildings. Subhead 3002RO. Consultants' fees for Urban Council projects. Subhead 3005GG. Site formation and other works involving geotechnical problems - consultants' fees. Under the Memorandum of Administrative Arrangements made with the Urban Council in 1973 all Urban Council capital works projects are handled by the Architectural Services Department and the Government recovers from the Urban Council the actual costs incurred plus a standard 16% on-cost charge to cover administrative overheads. In 1977 the Geotechnical Control Office of the then Public Works Department was formed and more stringent geotechnical standards were imposed to stabilize slopes and work sites. To meet the increased workload and provide the necessary expertise, consultants have been employed by the Government to undertake geotechnical work arising from the construction of new works and new building projects including Urban Council projects. Following discussions with the Urban Council about who should meet the cost of such works, the Urban Council agreed in January 1980 to meet the cost of geotechnical works involved in developing sites allocated to the Council and that generally it should meet the cost of a geotechnical survey where the Director of Architectural Services considered there was doubt about the stability of a site.
134. A recent audit examination revealed that an amount of $2.4 million being fees paid to geotechnical consultants for a number of Urban Council projects had not been recovered from the Urban Council whilst in other cases the fees had been recovered in addition to the standard 16% on-cost charge. I invited the attention of the Director of Architectural Services to the omission to recover the geotechnical consultants fees and suggested that the Urban Council should be charged accordingly.
135. In reply, the Director of Architectural Services informed me that the anomalies in accounting treatment arose because the Urban Council's undertaking to meet the cost of geotechnical works had never been drawn to the attention of his staff dealing with Urban Council projects. The Director expressed the view that although the Urban Council accepted that it was responsible for the payment of remedial geotechnical works, it was not clear whether geotechnical consultancy fees incurred should also be recovered or whether this element was included in the standard 16% on-cost charge. The Director therefore suggested that an explicit agreement should be reached with the Urban Council to clarify the existing position and avoid future confusion, and he has sought advice from the Deputy Financial Secretary. Until the matter is resolved, the Director does not consider it appropriate to attempt to charge the Urban Council the outstanding fees of $2.4 million. Meanwhile he will deal with all new projects on a case by case basis and seek specific agreement with the Urban Council to recover any future geotechnical consultancy fees incurred.
136. Head 703 – Buildings. Subhead 3011RE. Queen Elizabeth Stadium. The Queen Elizabeth Stadium was officially opened in August 1980. Since its opening the problem of water leakage in the basement of the stadium has been the subject of repeated complaints by the Director of Urban Services. Notwithstanding various remedial works which were carried out at a cost of $0.8 million, including the introduction in late 1984 of a system of open channels and drain pipes, the Director of Urban Services reported to the Director of Architectural Services in March 1985 that water leakage continued in various locations and flooding in the basement amounted to about four 38-litre buckets a day. The Director of Urban Services noted the view of the Government Maintenance Surveyor that the existing system had proved a failure and pressed for a full remedy. In May 1986 the Director of Architectural Services obtained financial approval from the Deputy Financial Secretary to undertake additional waterproofing works which are scheduled to start later in 1986 at an estimated cost of $1.1 million. The Director of Architectural Services has stated that these works do not represent a complete cure and is unable to give any warranty beyond an assurance that the basement will be dry on completion.
137. An audit review was carried out to ascertain why extensive additional waterproofing works were necessary only a few years after the completion of the stadium, commencing with an examination of the substructure contract which was certified as substantially complete in January 1978. The substructure contract involved the construction of a caisson foundation and a basement of three structural levels. The design of the basement was prepared by consultants who were engaged for the design and construction of the project. The consultants' design relied on waterproofed concrete for waterproofing as an alternative to conventional tanking by rock asphalt. During the construction period the contractor informed the consultants that the waterproofed concrete would hardly be able to restrain leakage of underground water and requested that consideration be given to the provision of a tanking system for the whole basement. The consultants
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