Gateway Process
and Project Cost
Management

While not compromising the functionality, quality and safety of works, the Project Strategy and Governance Office (PSGO), as an independent third party, participates in project cost vetting from project inception stage in accordance with the “fitness-for-purpose and no frills” principle, and implements the following measures to control the costs:

• During the project inception stage, we examine the technical feasibility statement prepared by the works departments to establish the technical feasibility of the project and review the preliminary cost estimate and cash flow requirements. To further control project expenditure, the Government is planning ahead with an “ownership” mindset, requiring relevant policy bureaux and user departments to collaborate with the PSGO and the Financial Services and the Treasury Bureau in the very upfront stages to comprehensively evaluate the cost-effectiveness of different implementation proposals, so as to jointly formulate practical and more cost effective proposals.
• During the design stage, we liaise with project proponent policy bureaux and user departments to enhance project cost-effectiveness, reduce cost and minimise risk of cost overrun through design optimisation by means of exploring different design options, construction methods and procurement models. We also carry out benchmarking with costs of other similar projects and make reference to the prevailing market situation, to ensure that the project estimates are reasonable. Furthermore, the Government adopts parallel tendering before submitting funding application of the projects to the Legislative Council so as to accurately reflect the tender prices in the approved project estimate for better financial management of the projects to reduce the risk of cost overrun.
• During the construction stage, the Development Bureau regularly conducts high-level meetings with works departments, complemented with the established Integrated Capital Works Platform, enabling management of different departments to grasp the realtime performance of each project, closely monitor the implementation programme of projects and provide timely intervention so as to mitigate the risks of project cost overrun and delays. At the same time, the PSGO also examines major variations in projects during the construction period and provides independent advice to works departments to ensure the cost-effectiveness of the major variations.