the ambit of the circular. The Committee recommend that the circular be revised to provide clearly for the need for geotechnical checking in such cases.
7.24 The Committee recommend that the prescribed departmental procedures for geotechnical checking are always followed.
7.25 The Committee also recommend that the prescribed departmental procedures should state explicitly the timing of geotechnical submissions so as to enable the checking to be carried out before tendering of the works.
7.26 Paragraphs 201–204. Kwai Chung incinerator project. Contractual claims of $7.1 million and delay in completion of 37 months arising primarily from less than satisfactory co-ordination of the plant and civil engineering works. The Committee asked whether the present project management organization in which different offices deal with the design. and construction matters relating to their respective engineering disciplines was entirely satisfactory. The Director of Engineering Development said that when a project involved multi-engineering disciplines it was invariably under the control of one lead office. An example was the Route 5 Project from Sha Tin to Tsuen Wan, which was managed by consultants under the overall control of the Highways Office with the assistance of the Electrical and Mechanical Services Department. The Director said that he was not against the suggestion that there should be one lead department or office. He believed that there must have been some misunderstanding in the correspondence with the Director of Audit concerning the matter.
7.27 The Director of Engineering Development said that the only contentious point concerned the role of the Engineer under the contract. When a contract had been let and the Engineer had been designated, the overall project manager or lead department could not interfere with the independence of the Engineer. The Director stated that the problems identified in the Kwai Chung incinerator project were that the contract documentation and co-ordination were not good enough. However, these problems had been solved in more recent projects.
7.28 The Committee asked whether with hindsight the problems encountered could have been obviated had the Kwai Chung incinerator project been under the control of a lead project manager. The Director of Engineering Development stated that in 1977-78 both the Electrical and Mechanical Office and the Civil Engineering Office formed part of the Engineering Development Department and it could be argued that there was a lead department at that time. The Director informed the Committee that his predecessor had been actively involved in the management of this project and had been consulted from time to time.
7.29 In further clarification of the statement made in paragraph 204 of the Director of Audit's report that the Director of Engineering Development had reservations as to whether the appointment of a single office as the project manager would be of much benefit, the Director of Engineering Development stated that there had been some misunderstanding and that he in fact supported the idea of a lead office to provide better co-ordination. The Secretary for Lands and Works agreed that there was no doubt about the need for a lead office for projects which crossed departmental boundaries.
7.30 The Committee asked what had caused the delay of 37 months to the overall project. The Director of Engineering Development explained that it was a very complicated project which required the civil engineering contractor and the plant contractor to work together on the same site. Furthermore, because of the unsatisfactory contract documentation, there were arguments about site access and space requirements which accounted for three to six months delay. Delays were also caused by a design change during construction which was intended to facilitate the future operation and maintenance of the plant. The Secretary for Lands and Works added that the redesign of the plant affected the design of the civil engineering work which also had to be revised. The delay was therefore cumulative.
7.31 The Committee asked why there was a need for the plant to be redesigned when the overseas contractor had been employed on a turnkey basis. The Director of Engineering Development stated that the revision of the design was an operational and maintenance requirement. Initially the maintenance was to be carried out at ground level but the Electrical and Mechanical Office later decided that an elevated platform was necessary. The changes necessitated a revision of the whole design of the building. It was not a question of a revision of the plant itself, but a design change to cater for maintenance after the completion of the plant.
7.32 The Committee asked about the proposed reorganization of the lands and works group of departments and whether this would improve co-ordination between the various units. The Secretary for Lands and Works said that under the proposed reorganization, the Buildings Ordinance Office and the Lands Department would be combined and the Highways Office would be hived off from the Engineering Development Department and upgraded to a department. The Urban Area Development Office which was a planning and programming co-ordination office, would be amalgamated with the New Territories Development Department and become the Territory Development Department. The Electrical and Mechanical Services Department and the Water Supplies Department would remain unchanged. The Secretary added that the reorganization should go some way towards enhancing project co-ordination and management.
7.33
Conclusions and Recommendations. The Committee wish to express their concern at the long delay in the completion of the project and over the payment of claims totalling $7.1 million. The Committee conclude that these arose primarily from unsatisfactory project management and co-ordination.
7.34 The Committee reiterate their general conclusions and recommendations at paragraph 7.1 of their Seventh Report where they stated that in order to ensure both effective management and proper accountability in such cases, there is a need for the appointment of a 'lead' office or department, and for financial responsibility to be aligned with administrative and executive responsibility.
7.35 The Committee note that, while there may have been some confusion about the Director of Engineering Development's attitude to the appointment of a 'lead' office for the management of complex projects, the Director is
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