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WEDNESDAY, JUNE 2, 1993
"BUT IT WAS NOT. RATHER, IT WAS BASED ON A VERY PRELIMINARY DESIGN, WHICH DID NOT TAKE ACCOUNT OF THE PARTICULAR REQUIREMENTS OF A SPECIALIST UNIVERSITY, AND WHICH WAS DRAWN UP WITHOUT THE BENEFIT OF ACADEMIC INPUT.
"
IT WAS ALWAYS LIKELY THEREFORE THAT IT WOULD BE NECESSARY TO INCREASE THAT ESTIMATE ONCE THE DETAILED DESIGN HAD BEEN COMPLETED, THE CHIEF SECRETARY SAID.
POINTING OUT THAT INFLATION WAS ALSO TO BLAME FOR THE ESTIMATE INCREASE, HE SAID: "IF THE COST OF A PROJECT IS APPROVED AT THE PRICES PREVAILING AT A PARTICULAR DATE, IT WILL NORMALLY HAVE TO BE INCREASED AS A RESULT OF PRICE INCREASES DURING THE CONSTRUCTION PERIOD.
"THERE IS NOTHING UNUSUAL IN THIS; WHAT IS UNUSUAL IS THE HIGH RATE AT WHICH BUILDING COSTS INCREASED DURING THE PLANNING AND CONSTRUCTION OF THE PROJECT.
THE BUILDING SERVICES INDEX ROSE BY 120 PER CENT BETWEEN THE FOURTH QUARTER OF 1987 AND THE SECOND QUARTER OF 1990.
ON JUNE 1, 1990, THE FINANCE COMMITTEE WAS INFORMED THAT THE ESTIMATE OF THE BUILDING COST HAD RISEN BY $1,928 MILLION COMPARED WITH THE ESTIMATE SUBMITTED IN MAY 1988.
OF THIS, $1,208 MILLION WAS DUE TO INCREASES IN BUILDING COSTS. THE REMAINING $720 MILLION WAS DUE TO THE INADEQUACIES OF THE ORIGINAL ESTIMATE.
THE CHIEF SECRETARY SAID THE ADMINISTRATION WAS AWARE FROM THE START OF THE NEED TO SET A COST CEILING FOR THE PROJECT.
BUT ARRIVING AT A FIGURE THAT WAS A FIRM AND RELIABLE ESTIMATE WAS MADE DIFFICULT BY THE FACT THAT THE DESIGN AND CONSTRUCTION HAD TO PROCEED IN PARALLEL IN ORDER TO KEEP THE PROJECT ON SCHEDULE, HE SAID.
COST ESTIMATES WERE CONTINUOUSLY CHANGING, AND IT WAS NOT UNTIL SHORTLY BEFORE JUNE 1990 THAT ALL THE PARTIES CONCERNED WERE ABLE TO REACH AGREEMENT ON A MORE REALISTIC PROJECT ESTIMATE, HE SAID.
THE CHIEF SECRETARY SAID A MORE IMPORTANT QUESTION WAS WHETHER THE PUBLIC RECEIVED VALUE FOR MONEY.
THE UNIVERSITY WAS GENERALLY BUILT IN ACCORDANCE WITH THE NORMS AND STANDARDS RECOMMENDED BY THE UNIVERSITY AND POLYTECHNICS GRANTS COMMITTEE.
THESE STANDARDS TOOK ACCOUNT OF THE SPECIAL REQUIREMENTS OF A UNIVERSITY DEVOTED EXCLUSIVELY TO SCIENCE AND TECHNOLOGY,
THERE WERE ALSO A NUMBER OF NON-STANDARD FACILITIES.
"I
AM PLEASED THAT THE PUBLIC ACCOUNTS COMMITTEE HAS ACCEPTED THAT THERE WERE GOOD REASONS FOR THESE FACILITIES, HE SAID.
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"ANY ASSESSMENT OF COST-EFFECTIVENESS MUST INCLUDE THE BENEFITS AS WELL AS THE COSTS," HE SAID.
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