XN000022-1977-04-20 — Page 31

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WEDNESDAY, APRIL 20, 1977

ELEMENTS CONTRIBUTING TO UNDER-SPENDING BY P.W.D. ******

THE DIRECTOR OF PUBLIC WORKS, THE HON. DAVID MCDONALD SAID TODAY HE WAS CONFIDENT THAT THE TARGET SET FOR SPENDING ON PUBLIC WORKS PROJECTS THIS FINANCIAL YEAR WOULD BE MET.

SPEAKING IN THE RESUMED BUDGET DEBATE IN THE LEGISLATIVE COUNCIL, HE SAID HE CONSIDERED THAT THE PROVISION IN THE 1977/78 DRAFT ESTIMATES FOR NON-RECURRENT SPENDING REALISTICALLY REFLECTED THE CAPACITY OF THE PUBLIC WORKS DEPARTMENT.

+ I FEEL CONFIDENT THAT WE CAN ACHIEVE OUR AIMS,+ HE SAID.

MR. MCDONALD ALSO ASSURED THE COUNCIL THAT THE P.W.D. ASSISTED BY A SPECIAL MANAGEMENT SERVICE UNIT STAFFED BY OFFICERS OF THE ORGANISATION AND METHODS DIVISION OF THE FINANCE BRANCH – WAS CONSTANTLY REVIEWING ITS PROCEDURES AND ORGANISATION SO AS TO PROVIDE A MORE EFFICIENT PUBLIC SERVICE.

MR. MCDONALD SAID THAT DESPITE EFFORTS BY THE P.W.D. TO BOOST SPENDING ON PUBLIC WORKS PROJECTS DURING THE LAST FINANCIAL YEAR, AS EXPLAINED BY THE FINANCIAL SECRETARY IN HIS BUDGET SPEECH IT HAD NOT BEEN POSSIBLE TO SPEND ALL THE MONEY ALLOCATED.

IN RESPONSE TO A REQUEST BY UNOFFICIAL LEGISLATIVE COUNCILLOR MISS LYDIA DUNN, IN HER SPEECH IN THE BUDGET DEBATE ON MARCH 31, MR. MCDONALD PROVIDED A FURTHER BREAKDOWN HIGHLIGHTING THE MAIN REASONS FOR THE UNDER-EXPENDITURE.

HE SAID THE LARGEST SINGLE CAUSE OF UNDERSPENDING WAS DIFFICULTIES AND DELAYS IN LAND CLEARANCES, ACQUISITIONS, RESUMPTIONS AND COMPENSATION PAYMENTS ALL OF WHICH RESULTED

IN ABOUT $130 MILLION BEING UNSPENT.

MUCH OF THE DELAY, HE ADDED, STEMMED FROM OWNERS' UNWILLINGNESS TO ACCEPT GOVERNMENT OFFERS DURING A PERIOD WHEN MARKET VALUES WERE RISING.

ABOUT $20 MILLION COULD NOT BE SPENT BECAUSE OF DELAYS IN WORKS PROGRAMMES AND COMPENSATION PAYMENTS BROUGHT ABOUT BY OBJECTIONS RAISED UNDER THE STREETS (ALTERATION) ORDINANCE.

MR. MCDONALD SAID THERE HAD ALSO BEEN AN UNEXPECTED SAVING OF $114 MILLION DURING THE YEAR AS A RESULT OF LOW TENDER PRICES, WHICH ACCOUNTED FOR THE SECOND HIGHEST AMOUNT UNSPENT.

BUT HE SAID IT SHOULD BE REMEMBERED THAT THE ESTIMATES FOR 1976/77 WERE PREPARED IN OCTOBER 1975 WHEN LABOUR MATERIALS AND TENDER PRICES HAD ALREADY HIT A LOW LEVEL AND WERE BEGINNING TO SHOW AN UPTURN, SO THE ESTIMATES HAD ALLOWED FOR RISING COSTS.

+HOWEVER, AS THE FINANCIAL SECRETARY STATED IN HIS SPEECH, THE EXPECTED SHARP RISE IN PRICES DID NOT MATERIALISE -- EVEN WITH THE DEMANDS BEING MADE ON THE CONSTRUCTION INDUSTRY,+ HE SAID.