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LCQ13: Redevelopment scheme for the West Wing of Central Government Offices

     Following is a question by the Hon Kam Nai-wai and a written reply by the Secretary for Development, Mrs Carrie Lam, in the Legislative Council today (December 21):


     Regarding the proposed redevelopment scheme for the West Wing of Central Government Offices (the redevelopment scheme), the Government intends to adopt a "two-envelope" tendering approach to develop the project which will provide an office tower with a financial theme, public open space (POS) and facilities for government institution and community (GIC) and ancillary office uses.  In this connection, will the Government inform this Council:

(a) of the situation under which the authorities will consider adopting the "two-envelope" tendering approach for development projects involving land sales; the criteria, guidelines and conditions to be complied with; the respective weightings accorded to the price and the technical and design aspects in assessing the tender proposals; the assessment mechanism concerned; as well as the number of such cases in the past 10 years, together with the specific situations and the results concerned;

(b) why the "two-envelope" tendering approach is to be adopted for the redevelopment scheme; of the weightings to be accorded to the price and the technical and design aspects in assessing the tender proposals; the assessment criteria concerned; the formation and composition of the assessment panel; the expected number of bidders; and whether developers which previously designed and developed commercial buildings and POS at locations near the site for the redevelopment project will have an advantage over other bidders in terms of geographical knowledge, information access and experience;

(c) of the advice given by the Independent Commission Against Corruption on the authorities' plan to adopt the "two-envelope" tendering approach for the redevelopment scheme; how the authorities ensure that the tendering process will be conducted in a highly transparent manner and that all bidders will have equal access to information and opportunities;

(d) among the 40,300 square metres of gross floor area (GFA) to be provided under the revised redevelopment scheme, of the floor area which has been reserved for use by public and statutory bodies, government and community facilities, as well as the percentage of such area in the GFA; whether the public and statutory bodies using the floor area of government and community facilities have to pay rental at the level of Grade A offices; and how the authorities ensure that the rents for the offices concerned and facilities for ancillary office uses are set at affordable levels for these public and statutory bodies;

(e) of the sizes of the loading/unloading area and the carpark to be provided under the revised redevelopment scheme; whether the carpark to be provided within the site of the POS will be owned and managed by the Government as in the case of the POS; and whether the land title or ownership of the carpark will belong to the Government or the developer concerned; among the proposed 40,300 square metres of GFA to be provided, of the floor areas (square metres) and percentages to be owned and managed by the developer and the Government respectively; and

(f) whether the authorities have considered further revising the entire redevelopment scheme and not selling the land concerned in order to preserve the entire piece of land as government land forming an integral part of the "Government Hill", so that apart from the provision of POS, the future office tower will only be used for the provision of GIC facilities, and the Government will allocate and lease out the offices to public or statutory bodies related to monetary and financial matters, human rights and the rule of law (eg the Hong Kong Monetary Authority, the Securities and Futures Commission, the Financial Reporting Council, the Investor Education Council, the Financial Dispute Resolution Centre, the Equal Opportunities Commission, the Office of the Privacy Commissioner for Personal Data, Office of The Ombudsman, the Hong Kong International Arbitration Centre, the Legal Aid Services Council and the Law Reform Commission of Hong Kong, etc) to dovetail with the objectives set out in the proposals of the revised redevelopment scheme, and help raise Hong Kong's image and status as an international financial and legal services hub?



     The Central Government Offices (CGO) is one of the eight major "Conserving Central" projects.  On its own initiative, the HKSAR Government has proposed to comprehensively preserve CGO's Main and East Wings and fully consult the public on the redevelopment scheme for the West Wing (the redevelopment scheme).  Taking into account the major concerns raised by the public during the consultation period last year, namely, that the new public open space should be owned and managed by the Government to ensure public enjoyment of the site; that the proposed shopping centre under the original plan is not supported as there are already a lot of shopping malls in Central; and that traffic problems in the area should not be aggravated by the redevelopment, we have made positive responses and appropriate adjustments.

     In the revised redevelopment scheme for the West Wing, the size of the lobby of the office tower at the Lower Albert Road level will be reduced, resulting in an increase of about 11% in the size of the public open space (POS) within the development from the original 6,800 square metres to 7,600 square metres. The new POS will be under the Government's ownership and management. The gross floor area (GFA) of the originally proposed commercial shopping centre in the portion below Lower Albert Road level will be significantly reduced to about 2,000 square metres in order to release more space for government institution and community (GIC) facilities and ancillary office uses.

     Without the shopping centre, the traffic arising from the redevelopment will be less than that in the original proposal.  Based on the latest preliminary traffic assessment, the redevelopment scheme will not have any significant traffic impacts on the major roads in the area.

     The revised redevelopment scheme will maintain the theme of "Restoring Green Central" of the original proposal.  As Battery Path and the slopes on its two sides are not in the redevelopment area, the POS will play an important role of allowing the greenery from Government House to extend to Queen's Road Central and Ice House Street through Battery Path.  We believe that the revised redevelopment scheme has struck a proper balance between development and conservation needs, and adequately responded to the concerns raised by different sectors of the community during the public consultation period.  The proposal is in the best interests of Hong Kong.  

     My reply to the six parts of the question is as follows:

(a) According to the Stores and Procurement Regulations, for contracts where the quality of service or product is of paramount importance and needs to be taken into account in the tender evaluation, departments may consider adopting a "marking scheme", commonly known as the "two-envelope" approach, when inviting tender.  Under the "two-envelope" approach, the assessments of non-price and price aspects must be conducted separately, and tenderers are required to submit the non-price and price information in separate envelopes.  The "two-envelope" approach is more commonly adopted in tenders for works projects and service procurement.  

     For revenue contracts (including contracts involving land sales), it is not a common practice to adopt the "two-envelope" tendering approach.  Therefore, the Government has not set any guidelines for weightings accorded to non-price and price aspects, criteria, conditions and assessment mechanism for this kind of contracts.  Among the contracts involving land sales awarded in the past 10 years, the only case that adopted the "two-envelope" tendering approach was the land sale contract for the monument site of the former Marine Police Headquarters in Tsim Sha Tsui (Kowloon Inland Lot No. 11161).  The weightings accorded to the non-price and price aspects for that contract was 75:25.

(b) and (c) We propose to adopt the "two-envelope" tendering approach for the redevelopment scheme for the West Wing of Central Government Offices solely for the purpose of ensuring that the quality of the design and technical proposals are commensurate with the site's significance and comply with the relevant requirements in the Planning Brief of this "Comprehensive Development Area" site, and that consideration will not be exclusively on tender price.

     Since the redevelopment scheme will involve town planning procedures such as amendments to outline zoning plans, we estimate that tenders will not be invited until 2013.  At present, the Government has not yet commenced the process of tender preparation or formulated the criteria and mechanism for tender assessment.  We do not consider it appropriate to speculate about the likely market response to the tender invitation.  But in due course, we will consider and formulate the relevant criteria and mechanism in accordance with our long-held principles.

     The Independent Commission Against Corruption has approached the Development Bureau on its readiness to provide anti-corruption advice for the "two-envelope" tendering approach for the sale of redevelopment sites.  We welcome the assistance offered by the Commission and will work closely with the Commission when we start work on drawing up the tender documents so as to ensure that the tendering arrangements will be fair and just.

(d) Among the floor space below the Lower Albert Road level which will be for GIC facilities and ancillary office uses, about 3,800 square metres, or 9.4% of the total GFA of 40,300 square metres under the revised redevelopment scheme, will be earmarked for local, regional and/or international organisations.  The Government will consider at a later juncture the specific allocation criteria and rental levels for these government-owned floor space, but our premise is that the presence of these organisations in Hong Kong, and in Central in particular, would complement the presence of the Department of Justice in the Main and East Wings and the Securities and Futures Commission (SFC) and Hong Kong Exchanges and Clearing Limited (HKEx) in the office tower, and help raise Hong Kong's image and status as an international financial and legal services hub.

(e) Under the revised redevelopment scheme, the proposed loading/unloading and carpark level will be located beneath the POS.  Subject to detailed design, the GFA of that level will be about 4,500 square metres, and a certain portion may have to be reserved for allowing natural light to penetrate to the lower floors through the skylight in the POS.  According to the existing design, that loading/unloading and carpark level will be owned and managed by the developer, but it will be required to provide a vehicular access on that level to connect Lower Albert Road with St. John's Cathedral and the Former French Mission Building.

     Under the existing design, all floor areas of the office tower above Lower Albert Road level (about 28,500 square metres or approximately 70.7% of the total GFA in the revised redevelopment scheme), including the portion to be leased out to the SFC and HKEx for office uses, will be owned and managed by the developer.  The Government will retain the ownership and management right of the entire POS (about 7,600 square metres) at Lower Albert Road level.  For the portion below Lower Albert Road level for GIC facilities and ancillary office uses, apart from some 3,800 square metres earmarked for GIC facilities which will be owned by the Government, the remaining floor space (including lobby, circulation area, ancillary offices and commercial floor space) of about 8,000 square metres (about 20% of the total GFA in the revised redevelopment scheme) will be owned and managed by the developer.

(f) According to information from the Rating and Valuation Department, the vacancy rate of office space is 5.2% in Central and 8% territory-wide in 2010.  It can thus be seen that there is a strong demand for office space in the Central district.  The study findings of the Hong Kong 2030: Planning Vision and Strategy also show that demand for Grade A offices in the Central Business District will outpace supply.  The redevelopment scheme can increase the supply of quality Grade A offices in Central.  The existing offices of some public organisations or statutory bodies, such as the Equal Opportunities Commission and Consumer Council, are not located in Central.  Their relocation to the West Wing will not help ease the shortage of Grade A office space in Central and does not dovetail with the redevelopment's theme of financial and legal services.

Ends/Wednesday, December 21, 2011
Issued at HKT 18:26


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