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Following is a translation of the speech by the Acting Secretary for the Environment and Food, Mr Paul Tang, on the "Strategic Sewage Disposal Scheme" motion debate in the Legislative Council meeting yesterday (January 10).

Madame Chairperson,

I have listened carefully to Members' remarks. I can fully understand Members' regrets and disappointment about the delays and the difficulties encountered. I trust that they will understand and share my strong views about the aim of the scheme since there is still a lot to be done in respect of the collection and treatment of Hong Kong's sewage.

There has been so much argument about sewage treatment over the years, so many different proposals and opinions from so many different groups and personalities that it is difficult not to become confused about what is actually happening and what it is that we are trying to achieve. Let me try, like Sylvester Stallone in the movie 'Daylight', to go down into the dark tunnels and bring us out into the light.

The objectives we are trying to attain are to protect public health, sustain the marine environment and enhance the quality of the city by reducing organic, bacterial and industrial emissions into the waters in and around Hong Kong.

The strategy for doing that involves a number of actions, ranging from control of industrial, commercial and livestock wastes to improving local sewers and stormdrains and increasing treatment facilities throughout the territory.

In determining the timing and scope for new treatment works, we have been guided by a number of principles:

First : to set priorities for where treatment is most urgently required to protect public health or marine resources

Second : having identified the standards required to protect public health and the marine environment, to identify the most cost effective means of meeting those standards

Third : to ensure that any works undertaken have flexibility to cope with increases in demand or other changes in planning requirements, in order to secure long term value from the investment

With respect to the plans for treating the sewage produced in the main urban area, these principles were applied as follows:

First : Priority was given to collecting and treating the sewage generated in Kowloon, Tsuen Wan, Tseung Kwan O and Chai Wan which were the densely populated and main industrial parts of the older urban area and generated 70% of the total sewage that had been entering the harbour.

Second : The most cost effective way of collecting and treating the sewage from this area was identified as being to use deep tunnels to collect and one or two large treatment plants to process the sewage.

Third : To ensure flexibility, primary treatment was chosen for the first stage works since it would suit whatever final treatment and outfall arrangement would be selected in future.

When the original proposals for the first stage were reviewed in 1994/95, the then review panel recommended replacing the primary treatment plus lime dosing which would only be used in the initial years with a permanent chemical treatment process using ferric chloride. Trials proved that the technology worked with the high salt content in local sewage. Since it would enable savings in capital and recurrent costs to be made, as well as space savings and an increase in treatment efficiency; and since it would not compromise future decisions about final treatment or outfall systems, this recommendation was accepted and the planned primary treatment plant was changed into a chemical treatment plant. The chemical treatment plant has been built and started operating in May 1997.

Today, all stage I works are near to completion. Were the assumptions made about them correct?

Certainly the works and operation are cost effective. In terms of capital investment, each cubic metre of treatment capacity provided under stage I will have cost about $5,000 (this is making a pessimistic assumption that the Government will not recover any of the additional costs incurred because of the suspension of works by the first tunnel contractor). This compares with a capital cost of about $13,000 per cubic metre for existing secondary treatment systems like Shatin and Tai Po. The Stonecutters Island plant is achieving 90% of the efficiency of secondary systems but in terms of running costs, treating one cubic metre of sewage at the Stonecutters Island plant costs 69 cents, compared with $1.44 per cubic metre for the existing systems at Shatin and Tai Po.

For the collection tunnel system, the 23.6 kilometres of deep tunnel will have cost about $3 billion - again assuming we don't recover any of the additional costs from the first contractor. This works out at about $130 million per kilometer. That compares with a cost of about $200 million per kilometer for the much narrower trunk sewer being built just below surface level in North Point. Clearly, the deep tunnels under stage I are a lot cheaper. In addition, by avoiding all the existing and planned infrastructure at sub-surface level, the deep tunnels avoid a lot of difficulties in engineering, avoid a lot of social disruption and economic costs including cost of time lost in traffic jams caused by additional roads works, and do not themselves impose additional constraints on other development in future.

Members will have noted that each of the two previous statements about costs have been qualified by the assumption that the Government is not successful in recovering costs arising from the dispute with the first tunnel contractor. I should like to take this opportunity to inform Members of the present position with respect to that dispute. The three arbitration hearings to determine liability have now been concluded. The Government has been successful in relation to all the most significant issues in the dispute. While the contractor has the right of appeal, so far, the Government has been successful in resisting the contractor's claim and largely successful in its own counterclaim. On that basis the Government would expect to be able to recover very substantial damages from the first contractor. The full amount of the Government's damages claim cannot be assessed until the completion contracts have been completed and, if disputed, may require further arbitration proceedings for final quantification.

The main reason for the upsurge in construction cost of the stage I works is the unilateral termination of contracts by the first deep tunnel contractor, thereby resulting in our applications to the Finance Committee for additional funding to cover the increased cost of the deep tunneling works. However, out of the 19 project items covering the stage I works, we have identified savings of $200 million in 13 items. According to current estimates, we believe that we could control the total expenditure of the stage 1 works to within $8,323.7 million. If we could successfully recover damages claim from the first tunnel contractor, the total expenditure will even be lower than the said figure.

Let me return to the main issue, the assumptions about stage I. With regard to the efficiency of treatment, clearly there was an underestimate made in 1995. Then it was predicted that the chemical treatment would remove 70% of suspended solids and 55% of Biochemical Oxygen Demand. Since 1997 the treatment plant has actually been removing 83% of suspended solids and 75% of the Biochemical Oxygen Demand. The 2000 IRP have observed that the plant is achieving 90% of the efficiency of a conventional secondary treatment plant and is the most efficient chemical plant operating in the world. The increased efficiency of the existing plant is one of the reasons for the IRP proposing that we should explore the feasibility of using spare land at Stonecutters Island to install tertiary treatment facilities, since it may not be necessary to use that land for additional chemical treatment to deal with Hong Kong Island sewage.

In terms of flexibility, the assumption that the stage I works would not compromise any future decisions about treatment or outfall locations has been confirmed by the 2000 IRP. They have urged that the works be completed and fully commissioned as soon as possible. All their proposals assume that the stage I works are in place. In other words, the IRP has recognized our efforts invested in stage I works and their effectiveness.

In the early 90's, we have made the assumption that the stage I works could be completed by mid 1997. The first ever deep tunneling work in Hong Kong did encounter delay due to poor geological conditions and unforeseeable technical problems. With hindsight, it would have been advisable to have been less optimistic about timing. The experience gained from the first stage tunnel works will be taken into account in the design and estimates for constructing future deep tunnels.

It was also predicted that deep tunnels being excavated well in the bedrock under the seabed would not have an impact on land. This prediction has proved correct in the deep tunneling works under stage I with the exception of the conditions encountered in Tseung Kwan O. In the light of the problems encountered in the unusual settlement in Tseung Kwan O, we will exercise much greater precautions to avoid risks from any future deep tunnel works. The 2000 IRP was asked to review the tunneling measures. We welcome the recommendations they have made in this respect.

I appreciate that some of the Hon. K K Fung's points in the original motion - and much of the burden of the Hon Cheng Kar-foo's amendments - are directed at the unusual settlement in Tseung Kwan O tunnel and its effect on local residents. I understand Member's views, and I share the concern of the residents in the affected areas who have seen some unusual settlement near their homes and are quite naturally desirous of assurance from the Government that all is safe.

Let me remind Honourable Members of the findings of the investigation into the unusual settlement at the TKO. The settlement has now stabilized all areas and stopped in most parts of the town center. All the buildings concerned are safe and their structural integrity has not been affected. There have been no signs of defects in any buildings that could be related to the unusual settlement. The Government will continue to monitor the situation closely. The Government is repairing defects in public roads and pavements arising from the settlement.

I understand that the proposals regarding the TKO incident in the Hon. Andrew Cheng's proposed amendments to the Hon. K K Fung's motion formed part of a range of suggestions that he had sent earlier to the Administration. Relevant bureaux and departments are now examining these suggestions and will give their responses as soon as practicable.

We are determined that any future deep tunneling works should not raise such concerns with residents elsewhere in the territory. In fact, tunnels have already been built elsewhere - including under the entire width of the Kowloon peninsular - without having had any effect on residents in those areas. We are carefully studying the lessons that can be learned about the design, management and technology used in any future works of this kind. In this connection, it should be noted that the 2000 IRP has actually endorsed the use of deep tunneling technology in Hong Kong by suggesting consideration be given to constructing deep tunnels in stages III and IV using such technology.

The then review panel had also considered installing tertiary sewage treatment facilities at Stonecutters Island and examined the feasibility of using the Biological Aerated Filters (BAF) system. However, since the technology was not mature at the time and had not been widely used in a large scale elsewhere, the then review panel did not recommend the Government to adopt the BAF technology. As pointed out by the International Review Panel (IRP) at the meeting of LegCo Panel on Environmental Affairs, the BAF technology has matured considerably in recent years and there have been successful applications of the technology elsewhere. Taking into account these latest developments and the better than expected performance of the Stonecutters Island Sewage Treatment Works, the 2000 IRP recommended that the Government install BAF facilities at Stonecutters Island to work in conjunction with the stage I works. The IRP also considered that the effluent could be discharged through the stage I outfall at Stonecutters Island after undergoing tertiary treatment into the Harbour. Hence, it would no longer be necessary for the Government to construct a long oceanic outfall to convey the treated effluent to the southern waters of Hong Kong for disposal. The IRP is aware of the high salinity of Hong Kong's sewage, it recommended that the Government should undertake trials to verify the technical feasibility of applying the BAF system in Hong Kong. We intend to undertake studies and trials as recommended by the IRP.

Let me now respond to members' views on the section of consultants. The selection process of consultants for SSDS project, as for other government infrastructural projects, was open, transparent and fair. The selection of consultants is based on technical merit and fees. Consultants are required to submit, in separate envelopes, both a Technical Proposal and a Fee Proposal. The relevant departments will consider all technical Proposals based on a pre-determined evaluation guideline. The Fee Proposals are opened only after assessing the Technical Proposals. On the basis of a pre-determined system of evaluation and weighting, the fee proposals are then combined with the technical assessment to determine which consultant.

After the consultants have commenced works, the relevant departments will monitor closely the performance of the consultants and reflect their performance in regular reports. The consultants' performance as recorded will also form essential references when considering their suitability in taking up new assignments. As an additional safeguard, awards of all engineering studies and work have to be vetted and approved by the Engineering and Associated Consultants Selection Board chaired by the Director of Civil Engineering and with members drawn from Works Bureau and Finance Bureau.

In addition, Works Bureau regularly reviews the arrangements for selection and monitoring of consultants.

In conclusion, may I make the following important points to summarize the Government's position in this motion debate :

- Certainly there are useful lessons to be drawn from the stage I works. We will draw on this experience in implementing future large-scale Government projects.

- The Hon Ng Ching-Fai's suggestion that we rename the scheme is worth considering. In fact, a major part of the stage I works is concerned with 'treatment' instead of 'disposal' of sewage. Indeed, as well as putting the focus on 'treatment' it may be well also to drop the term 'strategy'. As I said earlier, collecting and treating the sewage from the main urban area is important, but it is still only one part of the programme needed to achieve our overall objective of ensuring that the quality of life for everyone in Hong Kong is enhanced by a clean and healthy marine environment.

- The most important point now is to look forward to how we move on to take the next steps towards the goal of a clean harbour. The review process was designed to be completely open and to give opportunity for all parties to join in and give their views. Within the next couple of months the Administration will be setting out how we intend to get on with the various recommendations that the IRP has made, and will be seeking public comments on the proposals that have been put forward for future stages of works. We will continue to work closely with local experts, academics, green groups and professional bodies as well as informing and responding to the general public. Our objective is to ensure that decisions taken on these important public works are understood and supported by the community.

- We will also continue to work closely with our colleagues in the Mainland, to make sure that the measures we take will wider efforts to protect the marine environment in the region.

- For the moment, while I understand Member's sense of regret at disappointed expectations, and over the concerns that have been raised among certain residents in Tseung Kwan O, I find the gloomy presumptions in the preamble to the motion have little foundation in fact. Thanks to the support of many past and present members of this Council, today, the main urban area has a system that is already stopping 50 tonnes a day of pollution from draining into the harbour. Before the end of this year, the system will be treating 70% of all the main urban area sewage.

- The Government is taking all measures it can to protect the public interest and recover the additional costs incurred owing to the default of the first contractor.

- The stage I works will provide a high level of sewage treatment in a very cost effective manner, both in capital and recurrent terms. They will serve as a reliable foundation on which further improvements to the urban area treatment system can be developed. I look forward to constructive discussion with this Council over the coming year as to how best we now move on together to achieve our common objective of cleaning up the Victoria Harbour.

Members also expressed their concern about the issue of

sewage charges. But I must stress that society as a whole has a responsibility to consider the problem of sewage treatment and to decide on the means to account for costs concerned.

As the stage I works and the arbitration with the first tunnel contractor are still on-going, the Government considered that it would not be appropriate to conduct an investigation now. We believed that Members could only have a precise picture on the effectiveness and final cost upon the completion and commissioning of the stage I works and the completion of the arbitration proceedings. By then, Members will have adequate substance and materials to discuss matters relating to the stage I works. I believe that this approach is also consistent with the findings of the Public accounts Committee.

Because of the various reasons mentioned above, we would not agree to the Hon. K K Fung's motion and the other two proposed amendments. I sincerely urge Members to vote against the Hon. K K Fung's motion and all the proposed amendments.

Thank you.

End/Thursday, January 11, 2001

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