XN000022-1996-11-13 — Page 27

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(b)

(c)

(ii) construction of a deep sea tunnel outfall;

(iii)

(iv)

construction of a new chemically enhanced primary treatment works on Stonecutters Island; and

construction of six sections of deep sewage collection tunnels.

All construction contracts of the SSDS Stage I have already been let and the works are generally progressing well on the works under items (1) to (iii) above. However, problems have arisen with part of the tunnel works under item (iv).

Tunnel boring works for the $1.3 billion deep sewage tunnels contract commenced on site early this year. Towards the middle of the year, the Contractor encountered water seepage through the rock into two of the six tunnel sections. From mid June to end July, the Contractor suspended the tunnel boring work progressively, leading eventually to works stoppage at all six tunnel sections although no technical obstacles related to water seepage were encountered in the other four tunnel sections.

In response to the Contractor's actions, Government has engaged independent tunnelling experts to advise on the technical issues and discussions have been held with the Contractor's representatives in an effort to get the tunnelling works back on track. As discussions are still on-going, it would be inappropriate to disclose further details of the process and premature to say who should be held responsible for the problems.

The details of any improvement works that may prove necessary have yet to be agreed upon. It is thus too early to say how much those additional costs will be.