CONFIDENTIAL
機密
Progress made in the refinement of cost estimates
8.
Much progress has been made in the past nine months. Detailed design and
contract documentation, which were held in abeyance prior to the initialling of the MOU,
picked up momentum again immediately in July 1991. Great effort has been made to re-gain
the lost time in order to achieve the timely completion of the ACP. Details of project scope
and cost estimate have been developed and closely reviewed during this relatively short period
of time. Furthermore, in order to prepare contract documentation on the basis of mostly fixed
price lump sum basis, the project requirements are defined in greater detail and more accuracy
(because, in most cases, no remeasurement of quantities will be provided for during the
construction stage). In other words, we have made a lot of progress in the planning and
implementation of the ACP which is normally done in a matter of years, and that is also why
there appears to be some notable changes in the estimates over a seemingly short period of
time.
9.
While it is expected that the above costs will be subject to further refinement
when major tenders are received and awarded, we are confident that the net effect of such
cost adjustments can be contained within the $2.5 billion contingency allowance mentioned
in paragraph 4 above. Preliminary assessment of the recent tenders received by the
Government indicates that, in most cases, there will be favourable tender prices due to keen
competition. There will also be closer scrutiny of the interface between projects and the
apportionment of cost between various parties. With the introduction of a specially designed
project (including cost) management system, we are confident that the scope and costs of the
ACP can be kept under tight control.
CONFIDENTIAL ##
機密