TNAG-0564-FCO40-659-Construction-of-an-underground-railway-system-in-Hong-Kong-1975 — Page 8

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XCC(75)55

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the total of the indicated prices for these four tenders can be regarded as satisfactory and leaves an allowance in hand to cover future escala- tion over and above the 7% per annum already allowed for.

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The three international tenders concerned are for large and difficult civil engineering contracts, including bored and cut and cover tunnels, together with two stations in a populous area of North Kowloon, The local tender is also for bored tunnels in the same area. They are, therefore, reasonably representative of the bulk of the major civil engineering works that will be encountered, inasmuch as tunnel and station works represent three-quarters of the total contract cost of all civil engineering works (or nearly two-thirds of the contract cost of all works).

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A revised total estimate for the project as a whole (at July 1975 prices) has subsequently been produced:

(a)

(b)

(c)

by taking the information obtained from the three representative international civil engineering tenders (but using the higher European tender for one contract);

by taking the information from the local civil en- gineering tender;

and using this information, together with certain design refinements which have produced cost savings, to update estimates for civil engineering works;

(d) by updating estimates for electrical and mechanical

works;

(e) by revising the estimates for other costs.

This revised total estimate is at Annex C. It will be seen that, at $4, 487 million, it is $180 million less than the January estimate, which was at October 1974 prices.

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It is not possible to be precise when estimating the total cost of such a large project over a five year period. Although it may now appear that the January estimate was rather conservative, there is still almost five years to go before the project is completed. Despite the reduction in the estimate, therefore, it would be prudent to assume no more than that this confirms that the Modified Initial System can be built within the previously stated total cost of $5, 850 million.

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