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LCQ11: Renting office in commercial building as Office of fifth-term Chief Executive-elect
     Following is a question by the Hon Michael Tien and a written reply by the Chief Secretary for Administration, Mr Matthew Cheung Kin-chung, in the Legislative Council today (February 15):

     In the middle of last month, the Government entered into a tenancy agreement, with a rental period from late January to mid-August this year, for renting an office in a commercial building at Garden Road, Central as the Office of the fifth-term Chief Executive-elect (CE-elect's Office). Subsequently on the 25th of last month, the Government briefed the Panel on Constitutional Affairs of this Council on the relevant arrangements. In this connection, will the Government inform this Council:

(1) of the detailed process and the relevant records regarding the work carried out by the relevant government departments to prepare for the setting up of the CE-elect's Office, including the commencement dates, completion dates and results of the various items of the preparatory work, and the work for which the various officers were responsible (listed by the government departments to which they belonged and their post titles);

(2) of the non-private properties that had been considered by the Government as the potential location of the CE-elect's Office, and the detailed reasons why such properties were not chosen in the end;

(3) of the detailed estimated works expenditure (including the expenditures on fitting-out and reinstatement) and the detailed estimated operating expense (including the expenditures on security services and on the salaries and fringe benefits of directorate and non-directorate officers) for the CE-elect's Office;

(4) whether it can provide a layout plan of the CE-elect's Office showing its partitioning as well as the areas and uses of various sections; of the details of the fitting-out materials that have been chosen and whether the authorities have taken into account the principles of environmental protection in choosing such materials; and

(5) given that the estimated expenditure of the CE-elect's Office is as high as $39.96 million, which has far exceeded the estimated expenditure of some $8.29 million for the CE-elect's Office set up for the fourth-term Chief Executive five years ago, why the authorities did not take the following approach: separately submit the former to the Finance Committee of this Council to seek its approval, and enter into the tenancy agreement only after approval has been obtained?



     The fifth-term Chief Executive (CE) will be elected on March 26, 2017, and will assume office on July 1. To support the CE-elect in forming a governing team for the new term of Government, drawing up a policy plan for the new Government and making arrangements with the incumbent Government for a smooth transition, we have made reference to the arrangements for setting up the Chief Executive-elect's Office (CEEO) upon election of the fourth-term CE in 2012. We plan to set up a CEEO which will formally commence operation once the fifth-term CE is elected, and will cease to operate by June 30, 2017.

     Our reply to various parts of the question is as follows:

(1) and (2) The Government has been preparing for the establishment of the CEEO since mid-December last year. Concerning the choice of location, Central, Admiralty and Wan Chai North are suitable areas for the CEEO where executive, legislative and commercial institutions of Hong Kong are congregated, hence facilitating the CE-elect's liaison with the incumbent Government and different sectors of the community and ensuring a smooth transition. In this regard, when the preparatory work commenced, the Government first tried to identify government premises in these areas as the location for the upcoming CEEO.

     The former CEEO was located at 12th floor of the West Wing of the former Central Government Offices which was vacated upon the completion of the Central Government Offices at Tamar and suitable office space thereat was immediately available for use as the CEEO after minor refurbishment. However, the former Central Government Offices have now been allocated to the Department of Justice and the West Wing where the former CEEO was situated, is undergoing large-scale refurbishment work which is expected to be completed by the end of 2018. Therefore, it cannot be used to accommodate the upcoming CEEO.

     We have considered using the offices of the Murray Road Multi-storey Carpark Building. However, the dilapidated condition of the facilities there requires a long period of time for refurbishment, rendering it impossible to meet the need of the CEEO in a timely manner. We have also considered the Queensway Government Offices where some office spaces are temporarily unused. However, these have been allocated to the Judiciary for the reprovisioning of supporting (e.g. human resources, training and administration) staff of the Judiciary currently working in the High Court Building, with a view to vacating space for the High Court's addition or expansion of court facilities or related services including the chambers, the Competition Tribunal, the Hong Kong Judicial Institute and the Probate Registry. The relevant comprehensive refurbishment works are almost completed. To avoid disrupting the expansion of judicial services, those offices should not be used as the CEEO. In addition, we have considered the Central Government Offices at Tamar, but vacating office space for the CEEO would involve temporary removal of other bureaux elsewhere or renting commercial premises, which is both costly and ineffective.

     In the absence of suitable government premises that can be vacated for use in Central, Admiralty and Wan Chai North, the Government had been identifying suitable commercial premises in the vicinity as the CEEO since early January, and subsequently signed a tenancy agreement with the relevant landlord on January 17, 2017.
     As regards the scope of responsibilities of departments in setting up the CEEO, please refer to Appendix I.
(3) and (4) In an information paper submitted to the Panel on Constitutional Affairs in January, the Government stated that the estimated cost for fitting out the CEEO and reinstatement is about $16.95 million (including $14.95 million being the preliminary estimate of the fitting-out work), and the operating expense is $23.01 million.

     The estimate for the above fitting-out cost has taken into account the short-term nature of the office and the principle of simplicity in planning the specifications and project cost of the office. Upon possession of the rented premises, the relevant departments further conducted detailed assessments, and it was ascertained that the existing electrical and mechanical installations there could be used as far as possible without the need for major alteration, and the principle of simplicity could be further pursued for the fitting-out design and choice of materials for the CEEO. For instance, instead of wallpapering, painting was used for refurbishment, and an open-plan layout was adopted for the office of non-directorate officers. We also strived to use demountable items and reuse some of the fitting-out materials such as carpets, wooden doors and lighting fittings in order to lower the cost of works, making the best use of materials and facilitating reinstatement in future. Accordingly, we are able to trim the estimated fitting-out cost to $10.32 million, representing a reduction of about 31 per cent. The estimated cost of works is $9,400 per square metre, which is less than the average fitting-out cost of $14,000 per square metre for a general government office. We have set aside 10 per cent of the estimate of the fitting-out cost as contingency provision (about $900,000). Should there be no unforeseen circumstances arising from the work process, such contingency provision will not be used and the actual expenditure will be further lowered. In respect of the current estimate of $2 million for reinstatement, we will take appropriate measures to minimise the actual cost. The breakdown of the revised estimate of the cost is as follows:
Revised estimate of cost
(A) Fitting-out works  
     (1) Building works 3,040
     (2) Building services 6,380
     (3) Contingency provision 900
           Subtotal 10,320
(B) Reinstatement 2,000
Total (A) + (B) 12,320

     The breakdown of the operating expense is as follows:
Estimated expenditure
(A) Salaries# 6,630
(B) Rent 12,920
(C) Other general departmental expenses  
      (1) Security 720
      (2) Cleansing 140
      (3) Duty visits, entertainment, etc 150
      (4) Procurement of furniture,
computer and office equipment
      (5) Electricity charges, maintenance and others 520
        Subtotal 3,460
Total (A) + (B) + (C) 23,010
# Details of the remuneration of the directorate officers and non-directorate officers are set out in Appendix II. Civil servants deployed to work in the CEEO are remunerated according to the pay scales of their respective grade and rank and they enjoy fringe benefits appropriate to their rank and terms of appointment.
     For security reasons, we are unable to provide the layout plan of the CEEO. Details of fitting-out materials are set out in Appendix III.
(5) The operating expense of the CEEO prior to April 1, 2017 can be offset by some of the savings of the Administration Wing in 2016-17. The funds required by the CEEO for 2017-18 will be included in the 2017-18 Estimates.
Ends/Wednesday, February 15, 2017
Issued at HKT 16:05
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