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Government not to re-submit funding application for RTHK's New Broadcasting House

     The Commerce and Economic Development Bureau (CEDB) said today (January 29) that the Administration had arranged rounds of meetings with Members of the Legislative Council Public Works Subcommittee (PWSC) to explain the New Broadcasting House project of Radio Television Hong Kong (RTHK), but consensus could not be reached. Having regard to the latest voting inclination of Members and circumstances of the project, the Government has decided not to re-submit the revised funding application to the PWSC for discussion at this stage. The bureau informed the PWSC Chairman of the decision in writing this afternoon (see Annex).

     A spokesman for the CEDB said, "On the way forward, we will work with RTHK and the Architectural Services Department (ArchSD) as soon as possible with a view to addressing Members' concerns over the project. Upon examination of the circumstances, we will conduct a re-tender for the project and re-submit the proposal to the Legislative Council for consideration."

     The spokesman emphasised that as the project was not supported by the PWSC, re-tendering would be the only option. This would, however, result in the project being delayed for at least two years. Depending on the magnitude of increase in construction cost, the delay might lead to a further rise in project estimate after re-tendering. The Administration has repeatedly explained the situation to the Members, but they still found it difficult to support the funding application.

     He pointed out there would be corresponding delay in the commencement of RTHK's new services owing to the delay in completion of the New Broadcasting House. In addition, as the existing Broadcasting House, which had been operated for 45 years, was very crowded with obsolete facilities, additional resources would be required to maintain the existing facilities at the necessary service level.

     The PWSC discussed the New Broadcasting House project at its meetings on December 18, 2013 and January 3, 2014. Members generally supported in principle construction of the New Broadcasting House, but considered the project estimate too high and urged the Administration to reduce the cost.

     "We have repeatedly stressed that the cost estimate for the New Broadcasting House project is considered a fair market price derived from the established tendering procedure, after making reference to the tender prices as well as provision for price adjustments. Despite this, we have endeavoured to explore different feasible options on the condition that there would be no need for a re-tender, which would delay project implementation, and suitably revised the cost estimate of some items to address Members' concerns," the spokesman said.

     Under the revised proposal, the project estimate in money-of-the-day prices is reduced from the original $6,055.6 million to $5,303.2 million, representing a reduction of $752.4 million (or about 12 per cent); in September 2013 prices, it is revised from $5,006.2 million to $4,399 million, representing a reduction of $607.2 million (or about 12 per cent).

     The spokesman added that the existing RTHK premises on Broadcast Drive would be returned to the Government upon completion of the New Broadcasting House. According to the assessment in 2009, the value of the existing RTHK premises, which was located on a prime site on Broadcast Drive, was estimated at $5,000 million (in 2008 prices). This figure had not taken into account price adjustments and the latest market condition since 2008.

     "We have held rounds of meetings with Members to further explain the details with a view to ensuring that they have a full understanding of the revised proposal and the situation of RTHK. Nonetheless, some Members still indicated that they would not support the project and urged the Administration to further reduce the project scope and/or estimate. This is regrettable and we are very disappointed," he said.

     The spokesman stressed that the scale and facilities of the New Broadcasting House were proposed on the basis of operational needs arising from the new services which had received public support during an extensive public consultation. They were in no way close to extravagant or wasteful, but just the basic requirements for RTHK to provide its existing services and implement new services. They only complied with the technical requirements under local and international standards and were comparable to those adopted by other industry players.

     The Government announced in September 2009 that RTHK would be tasked to take up the mission as the public service broadcaster, and subsequently conducted a comprehensive public engagement exercise on the scope of new services for RTHK. With public support confirmed, the expanded scope of services was incorporated into the RTHK Charter. On this basis, the Administration has taken forward the planning of the New Broadcasting House project in a progressive and step-by-step manner. During the process, it has strictly complied with the established procedure to ensure that the project would be commensurate with requirements of the new services and implemented in a cost-effective way. In 2011, taking into account RTHK¡¦s new operational requirements, the Architectural Services Department (ArSD) completed a technical feasibility study and later invited tender for the project through a design-and-build procurement method.

Ends/Wednesday, January 29, 2014
Issued at HKT 19:05


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