Lawmakers to approve $13b grant to Hospital Authority

Lawmakers to approve $13b grant to Hospital Authority

 The Hospital Authority looks set to be awash with HK$13 billion in funds to meet expenditure for urgent minor works projects when lawmakers meet today to rubber stamp the government’s funding proposal.

The Finance Committee of the Legislative Council will make the final decision on funding after the Public Works Subcommittee gave its endorsement late last month on plans by Food and Health Bureau to make a one-off grant to the HA.

There would be a financial ceiling of HK$75 million for each individual item.

According to a paper submitted by the bureau to the subcommittee, about 5,000 projects will be carried out using the HK$13 billion grant and any investment returns generated from the grant.

“Due to their constant heavy utilization, the public hospitals and clinics are prone to accelerated deterioration. As a result, many of HA’s ageing facilities are in unsatisfactory conditions,” the bureau said in its paper.

The one-off grant will replace the current arrangement of funding minor works of the Hospital Authority through an annual block allocation of funds under a subhead of spending in the Capital Works Reserve Fund.

Individual items under the subhead are subject to a spending limit of HK$30 million.

The approved allocation of funds under the subhead has been rising steadily over the past decade, from HK$200 million in 2004-05 to HK$714.9 million in 2010-11.

In the current 2013-14 year, the HA was allocated HK$661.1 million to spend on its minor works.

The HA spends about 45 percent of funding on improvement projects, 40 percent on maintenance projects and 15 percent on feasibility studies and preparatory works for building projects.

The bureau said despite the increase in spending over the years, the allocation was insufficient to meet timely maintenance of the HA’s facilities.

“The current annual funding arrangement for minor works projects has constrained HA’s ability to flexibly plan and implement the necessary minor works projects for improving and maintaining the facilities in longer term,” the bureau said.

Minor works at Hospital Authority facilities such as Alice Ho Miu Ling Nethersole Hospital will be funded by a one-off grant of HK$13 billion  (Danny Chung)

Minor works at Hospital Authority facilities such as Alice Ho Miu Ling Nethersole Hospital will be funded by a one-off grant of HK$13 billion (Danny Chung)

As such a one-off grant of HK$13 billion would give the authority more resources and allow more flexible planning in implementing its works projects over the coming ten years, barring “an unusual hike in construction inflation”.

“The new arrangement will give the HA more certainty of the funds available for a reasonably long period of time,” the bureau said.

The funds from the grant which are not immediately required would be invested in low-risk investments “to achieve the highest prudent return” while maintaining enough liquidity to meet spending on projects.

For 2014-15, about 1,400 projects with an annual expenditure of about HK$680 million will be funded from the one-off grant.

The bureau will review and process works projects proposals from the HA, mirroring the existing mechanism under the annual block allocation.

Among the new projects for 2014-15 are additional escalators and passenger lifts at Pamela Youde Nethersole Eastern Hospital with an estimated cost HK$48 million and conversion of ex-Burns Unit and Prosphetics and Orthotics Spaces to Endoscopy Centre at Prince of Wales Hospital costing HK$40 million.

Danny Chung

 

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