This is an HTML version of an attachment to the Freedom of Information request 'Request a copy of Financial Circular No. 4/2012'.

  TsyB W 00/530-1/5/0 
  17 July 2012 / 20 June 2017 
[updated on 20 June 2017 vide FC No. 4/2017] 
Requirements for Project Definition Statement and 
Technical Feasibility Statement for Capital Works Projects 
(Note :  Distribution of this Circular is Scale C.  
Directors of Bureaux, Controlling Officers, 
and all officers dealing with capital works 
projects, resource allocation and Estimates 
preparation should read it.) 
This Circular updates  the requirements  for  Project  Definition 
Statements  (PDS)  and  Technical  Feasibility  Statements  (TFS).  In particular, it 
advises works agents on the updated levels of delegation for signing off TFSs, the 
improvement measures to the existing arrangements for optimising site utilisation 
and the expanded TFS requirements to cover tree preservation, heritage 
implications and energy conservation.     
Financial Circular No. 11/2001 is hereby cancelled with immediate 
/Preparation ..... 
Directors of Bureaux 
Controlling Officers 

link to page 1 - 2 - 
Preparation of Project Definition Statement and Technical Feasibility 
Before making any Resource and Allocation Exercise (RAE)  bids 
for capital works projects – 
the relevant policy bureau needs to justify and define the scope of 
the proposed project with a PDS, and   
the  relevant  works agent  needs to  confirm the technical feasibility 
of the proposed project on a prima facie basis with a TFS. 
With regard to project definition (paragraph 3(a) above), Directors 
of Bureaux  are required to sign off the  PDS for each proposed capital works 
project, following the format in Annex A.  Directors  of Bureaux  can also 
delegate the authority to approve PDSs to Permanent Secretaries/Deputy 
Secretaries, irrespective of the estimated cost of the projects.   
With regard to technical feasibility  (paragraph  3(b) above), upon 
receipt of a PDS, the relevant  works director is required to complete the  TFS  in 
consultation with the relevant policy bureau, client department and the Treasury 
Branch of the Financial Services and the Treasury Bureau (TsyB)1, following the 
format  in Annex B.  The works agent should  assess all aspects as required, 
including the design constraints, environmental considerations, the project cost 
estimate and implementation programme.  He should sign off the TFS and 
submit it to the Works Branch of the Development Bureau (WB) for approval. In 
vetting  the TFS, WB will check the validity of the technical assessment for the 
proposed project made by the works agent in  all  required  aspects, as well as the 
reasonableness of the project cost estimate and implementation programme.   
Works directors may delegate the authority to sign off TFSs to  a 
Directorate Officer at D2 level for projects estimated to cost under  $300 million 
each, and a Directorate Officer at D3 level for projects estimated to cost 
$300 million or more but not more than $700 million each.     
/7. ..... 
1    For projects of which the works agents are not government departments (e.g. Hospital Authority, school 
sponsors,  University Grants Committee  (UGC)-funded institutions), the works directors  should also 
consult the relevant  Controlling Officers  (e.g.  Director of Architectural Services,  Secretary-General, 
UGC) in completing the TFS. 

link to page 2 link to page 3 - 3 - 
As  the TFS only seeks to establish the technical feasibility of a 
project on a prima facie basis, we expect works agents to be able to complete a 
TFS  within four months  from the date of receipt of the signed PDS2  and 
without recourse to consultancy support.  If it is envisaged that the TFS could 
not be completed within four months, prior approval for extending the deadline 
for TFS submission should be sought from TsyB. Under no circumstances should 
a consultant be engaged exclusively for the sake of completing a TFS.   
If  a  works director is personally  satisfied that notwithstanding the 
completion of a PDS, a feasibility study is required before he is in a position to 
recommend that the project is technically ready for upgrading to Category B in 
the Capital Works Programme, he may consider engaging consultants to conduct 
the feasibility study.  He can also  submit the relevant extract of the feasibility 
study in lieu of a TFS for approval.     
TFSs are generally  not required for projects which are themselves 
studies, non-works items (such as purchase of property) or renovation works.    In 
such cases, works agents may apply to WB for a waiver of the TFS requirement.  
Irrespective of whether a waiver will be granted, the works agent should define 
the scope of works and work out the project estimate with itemized cost 
breakdown and payment schedule. 
Subject to paragraphs 8 and 9 above, TsyB will strictly enforce the 
requirement for all Capital Works RAE bids  to be accompanied by a PDS and a 
WB-approved TFS3.  The relevant policy bureau will need to submit in the RAE 
bids  other information as set out in annual  RAE call circulars, including  the 
recurrent implications arising from the proposed project. 
/11. ..... 
2    Including new and updated PDSs. 
3    Bids for upgrading a project to Category B must be supported by a TFS which has been approved by 
WB. For TFS completed three or more years ago, the information contained therein should be updated 
as appropriate. Please see FC No. 3/2012 for details. Updated information on TFS should be provided 
to TsyB, and copied to WB (Attn: CAS(W)4) for information.    For projects with substantial changes, 
the procedures stipulated in ETWB TCW No. 30/2003 “Control of Client-Initiated Changes for Capital 
Works Projects” should be followed. 

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To uphold fairness and preserve the integrity of the resource 
allocation system, policy bureaux should submit their capital works bids for 
consideration in the annual RAE (which normally takes place in the third quarter 
of the calendar year) so that the Star Chamber can take a holistic view on the 
relative merits of different funding proposals.    TsyB would only entertain in-year 
bids  if  there are urgent, exceptional and/or unforeseen circumstances that merit 
out-of-turn project upgrading between two RAE cycles.  Such  in-year  bids will 
still need to be supported by a PDS and a WB-approved TFS.4   
Optimisation of Site Utilisation for Capital Works Projects 
Project proponents should ensure that the sites of their proposed 
projects are utilised to the fullest extent possible.  For details, please refer to 
Financial Circular No. 4/2017 “Optimisation of Site Utilisation for Capital Works 
Expanded scope for Technical Feasibility Statement   
There is growing public expectation that our projects should be 
carried out with due regard to tree preservation, heritage implications and energy 
conservation.  Standard paragraphs on these three areas are required in the 
funding submissions to the Public Works Subcommittee (PWSC) of the 
Legislative Council (LegCo).  We therefore consider it advisable for works 
agents to look into these aspects at the TFS stage.  Details are set out in the 
ensuing paragraphs.     
/Tree ..... 
4    In-year RAE bids should be supported by a TFS which has been approved by WB.   For TFS 
completed three or more years ago, the information contained therein should be updated as appropriate.  
Please see FC  No.  3/2012  for details.  Updated  information  on TFS should be provided to TsyB,  and 
copied to WB (Attn: CAS(W)4) for information. For projects with substantial changes, the procedures 
stipulated in ETWB TCW No. 30/2003 “Control of Client-Initiated Changes for Capital Works 
Projects” should be followed. 

- 5 - 
Tree Preservation 
In accordance with Environment, Transport and Works Bureau 
Technical Circular (Works) (ETWB TCW) No. 3/2006 “Tree Preservation”, works 
agents are required to observe the need to preserve and protect trees while 
undertaking capital works projects.  Works agents should hence carry out site 
survey  of existing trees at the TFS stage to see whether there are any trees with 
high conservation or amenity value  that deserve to be retained.  In particular, 
trees already included or potentially registrable in the “Register of Old and 
Valuable Trees” under ETWB TCW No. 29/2004 “Registration of Old and 
Valuable Trees, Guidelines and  their Preservation” should  be identified for 
priority preservation at their existing locations.    Works agents should state in the 
TFS whether there are existing trees on site and whether  further assessment on 
preservation of these trees is required. 
Need for Heritage Impact Assessment     
Works agents are required to assess whether there are heritage sites 
within the project boundary or in the  vicinity  of the project site. They should 
confirm their findings with the Antiquities and Monuments Office (AMO) of the 
Leisure and Cultural Services Department and state in the TFS –   
whether there is/are heritage site(s)  (i.e.  all  declared  monuments, 
proposed monuments, graded historic sites/buildings, sites of 
archaeological interests and Government historic sites identified by 
AMO)  within the project  site  or in the  vicinity of the project site; 
whether a Heritage Impact Assessment (HIA)  is required  for the 
project in the investigation and design stage. 
Works agents should attach  AMO’s advice to  the  TFS  as per 
Section 5  of  Annex B.    For details on the procedures and requirements for 
assessing heritage impact  arising from capital works projects,  please  refer to 
DEVB  Technical Circular  (Works) No.  6/2009  “Heritage Impact Assessment 
Mechanism for Capital Works Projects”. 
/Energy ..... 

- 6 - 
Energy Conservation   
In accordance with ETWB TCW No. 16/2005 “Adoption of Energy 
Efficient Features and Renewable Energy Technologies in Government Projects 
and Installations”, the cost  of  energy efficient features and/or renewable energy 
technologies for a capital works project should be allowed for in the project cost 
estimates during the preparation of the TFS.    DEVB/Environment Bureau (ENB) 
joint circular (DEVB Technical Circular No. 5/2009, ENB Circular Memorandum 
No. 2/2009) on “Green Government Buildings” also sets out certain limits on 
additional costs arising from adoption of green measures (including energy 
efficient  measures)  in  government building projects.    Works agents  should  state 
in the TFS whether the cost of green features has been budgeted in the project cost 
estimates  and whether the requirements in the relevant  circulars  have been 
complied with. 
For enquiries, please contact PAS(Tsy)(W) at 2810 2232  or 
AS(Tsy)(W)1 at 2810 2495. 
Professor K C Chan 
Secretary for Financial Services and the Treasury 

link to page 4 Annex A 

To:  Director of [   ] 
Project Definition Statement for 
(project title) 
Please complete a Technical Feasibility Statement for the above 
project in accordance with Financial Circular No. 4/2012. 
Policy objective to be achieved through the proposed project 

Source of policy approval (ExCo, PC, Policy Address, etc.) 

Justifications for the project 

Target date for project to come into operation 
Description of project scope/special requirements1 
[Name/Title/Policy Bureau/Contact Tel] 
Client Department 
(Attn : CAS(W)4) 
(Attn : PAS(W)) 
(Attn: Ch Property Mgr (Site Utilisation))   
1  If fees are expected to be charged in relation to the usage of the facilities in the proposed project, the policy bureau 
should make clear whether any “hardware” structure for fee collection is required (e.g. a toll plaza will be needed 
for a tunnel project). This can facilitate the works agent to take into account the relevant requirements in preparing 
the TFS. 

Annex B 
To:  SDEV (Attn : CAS(W)4) 
Technical Feasibility Statement for 
(project title) 

As requested by the Secretary for [   ], I have completed the 
preliminary study for the above project pursuant to Financial Circular 
No. 4/2012.  I confirm that, prima facie, the project is technically feasible.  
The project is estimated to cost [      ].    I aim to hand over the completed works 
to the client department by/within [      ].    The key findings are set out below. 
Project Scope and Description 

(Describe the project scope, preferred development option and attach the 
outline layout plan.
Land Requirements 
(State the location, present zoning and whether planning permission/ 
amendment to the existing zoning is required.    Indicate potential changes to 
site boundary where applicable.    Attach advice from the Lands  Department, 
covering the following –   


"I have checked the land requirements of the above project.    According to the 
location and boundary of the project site broadly defined by the works agent, 
land resumption *is/is not required and major land clearance *is/is not 
required.    *The extent of *land resumption/major land clearance required has 
been broadly identified.    There *are/are no potentially problematic issue(s) as 
briefly listed below that may significantly affect the resumption/clearance 
programme.  The estimated time for site hand-over is ___ months from the 
submission of the final Clearance Application Form subject to no substantial 
changes in the project boundary.") 



- 2 - 
Development Constraints 
(Include preliminary geotechnical appraisal of the site; identify constraints and 
risks affecting cost and programme, such as diversion of major utilities, traffic 
constraints, the need for borrow areas or disposal sites, major slope 
stabilisation/geotechnical hazard mitigation works, interface problems, 
presence of soft marine deposits under proposed reclamation/marine structures, 
difficulties in adopting a no-dredge solution, etc.  State whether further 
studies e.g. traffic impact assessment, geotechnical assessment, and drainage 
impact assessment are required. 


Only desktop study of available data is expected.  No  physical ground 
investigation should be carried out for preparing the TFS.    Seek advice from 
the Geotechnical Engineering Office of the Civil Engineering and Development 
Department if necessary.)

(Identify whether the existing trees on site (if any) are Old and Valuable Trees 
(OVTs), potentially  registrable OVTs  or trees  of high conservation or amenity 
value.  Include preliminary assessment on the impact on these trees.  Field 
visits  may be necessary for  ascertaining  the condition and impact on the 
existing trees.    The proposed project should be categorised along one of the 
following lines – 


* There are no existing trees on site. 

* The site has (an)  existing tree(s) and further assessment to preserve* 
this/these tree(s) will be required.   


* The site has (an) existing tree(s) including the presence of *old and valuable 
tree(s)/potentially registrable old and valuable tree(s)  /  trees of high 
conservation and amenity value, and further assessment to preserve *this/these 
old and valuable tree(s) in-situ will be required.) 

(Attach  the  proforma  on site utilisation  signed by  the Government Property 
Agency along the following lines – 

* (a) GPA confirms that the project is not subject to the arrangement set out in 
the Financial Circular No. 4/2017; OR 

* (b) GPA is satisfied that, on the basis of ArchSD’s assessment of the PR likely 
to be achieved at [xx] based on the user  requirements  and PlanD’s reference 
PR at [xx] based on the site area of [xx]m2, the project appears to be able to 
achieve an optimal degree of site utilisation under the prevailing circumstances, 
i.e. the project could achieve at least 90% of the development potential of the 


- 3 - 
reserved site; OR 
* (c) GPA is not satisfied that, based on the proposed accommodation 
requirements  of the user(s), the project will achieve an optimal degree of site 
utilisation,  i.e. the project could  not  achieve at least 90% of the development 
potential of the reserved site.    The  Project  Proponent has to go through the 
course of actions detailed in paragraphs 9  to  12 of  the  Financial  Circular 
No. 4/2017 and enhance site utilisation by exploring different measures.    If the 
project is to proceed without optimising the site utilisation, Project  Proponent 
should seek the endorsement of the PSG before approval of the TFS; and/or 
(d) Further to (c), GPA confirms that the site utilisation of the project has been 
endorsed by the PSG on [date].) 

(For road projects, state whether the requirements for allocating space for 
greening on roads as stipulated in the DEVB TCW No.  2/2012  have been 
complied with.  If not, attach advice on the exemption from the Greening, 
Landscaping and Tree Management Section of DEVB.)   

Environmental Considerations 
(In consultation with the Environmental Protection  Department,  the  works 
agents should categorise the project along one of the following lines – 


* This is a designated project under the Environmental Impact Assessment (EIA) 
Ordinance (Cap. 499).    We undertake to prepare an EIA report to meet the 
requirements under EIA Ordinance. 

* This is not a designated project under the Environmental Impact Assessment 
Ordinance (Cap. 499) and is covered by a Class Assessment Document 
approved by the Director of Environmental Protection.   We undertake to 
provide the mitigation measures set out in the Class Assessment Document as 
part of the project. 
* This is not a designated project under the Environmental Impact Assessment 
Ordinance (Cap. 499).    It belongs to one of the categories listed in ETWB 
TCW No. 13/2003 that have very little potential for giving rise to adverse 
environmental impacts.   We undertake to implement the standard pollution 
control measures during construction, as promulgated by the Director of 
Environmental Protection. 
* This is not a designated project under the Environmental Impact Assessment 
Ordinance (Cap. 499).   We undertake to carry out a Preliminary 
Environmental Review for the project at the design stage and agree the findings 
with the Director of Environmental Protection.) 


- 4 - 
Heritage Implications 
(Attach Antiquities and Monuments Office’s advice on the need of Heritage 
Impact Assessment and categorise the project along one of the following lines – 

We have consulted  the Antiquities and Monuments Office (AMO)  on the 
necessity for conducting a Heritage Impact Assessment for this project.    AMO 
has advised that such an assessment is *required/not required. 

The project boundary cannot be ascertained at this stage.    We shall submit 
a checklist to the Antiquities and Monuments Office  to seek their advice on 
whether a Heritage Impact Assessment is required for this project as soon as 
the project boundary is determined.)   

Project Programme 
(Attach a Gantt chart covering major activities from receipt of the Project 
Definition Statement to physical completion, highlighting the critical path.)
Capital Cost Estimates 
The preliminary project estimate is $[      ] in  September [   ] prices.  
To achieve the project programme in paragraph 6 above, funding should 
be sought in the [      ] Capital Works RAE under Head [      ]/an in-year 
bid should be submitted before [      ] under Head [      ]. 
(Attach  reference  information to show the basis and reasonableness of 
the preliminary cost estimate of major components.  As a general 
guide, a component should be considered as major if its estimated cost 
exceeds $100  million  or 25% of the total cost excluding the 
contingencies, whichever is the  less.    The information to be provided 
should commensurate with the level of project details available at the 
time of preparation of the TFS.)
A rough breakdown of the capital cost estimate is as follows – 
Funded from 
Funded from 
Block Vote 
Project Vote 
(Subhead No) 
(Head No) 
Design & Related Services 
Consultancy fees at Study/ 
Investigation/Preliminary Design Stage 
Consultancy fees at Detailed Design Stage   
(iii)  Consultancy fees at Construction Stage 
(iv)  Resident Site Staff Cost 

- 5 - 
Funded from 
Funded from 
Block Vote 
Project Vote 
(Subhead No) 
(Head No) 
Site Investigation 
Construction/Works Packages/Contracts 
Other costs not covered by project main 
contracts (but charged to Project Vote) 
e.g.  F&E, Reprovisioning works 
Contract Contingencies 
e.g.  Works Package A 
Works Package B 
Project Contingencies 
(For building projects and other projects satisfying the criteria in 
Environment, Transport and Works Bureau Technical Circular (Works) 
(ETWB TCW)  No. 16/2005 and  Development Bureau (DEVB)/ 
Environment Bureau (ENB) joint circular (DEVB Technical Circular No. 
5/2009, ENB Circular Memorandum No. 2/2009) on “Green 
Government Buildings” only

The costs $[   ] for the energy efficient features and/or renewable 
energy technologies *have/have not been allowed for under item(s) [  ] 
in the cost estimate.  (In accordance with ETWB TCW No. 16/2005, 
where there is no such allowance in the project, the exclusion should be 
mentioned  in the covering memo of  the TFS  addressed  to DEVB and 
copied to the Electrical and Mechanical Services Department)  
limits on additional costs arising from adopting green measures  as set 
out in the joint circular on “Green Government Buildings”  *have/have 
not been exceeded.  (If the  limits have been exceeded, please give 
details in the covering memo of the TFS.)

- 6 - 
 [The estimated unit cost of the project, represented by building and 
building services cost,  is $_____ per m2  of CFA in September [   ] 
prices.]  (Text in square brackets  is  required for  building projects only
We consider the cost estimate would be  comparable to similar 
government projects  / the cost estimate would likely be  higher than 
similar  government projects because  …  (Please provide reasons 
e.g. difficult  site  conditions, special requirements of client departments, 
adoption of advance/alternative  technologies,  etc. If adoption of 
advance/alternative  technologies is proposed, please set out 
justifications and provide  deliberations  on the  cost-effectiveness as far 
as possible. )
The annual cash flow is as follows – 
Financial Year 
Block Vote 
Project Vote 
(Subhead No.) 
(Head No.) 
e.g.  2012-13 
[Name/Title/Department/Contact Tel] 
Director of Bureau/Permanent Secretary 
Client Department 
SFST (Attn : PAS(W)) 
Note:  DEVB  may update the technical requirements in paragraphs 1 to 7  above from time to time, in 
consultation with the Lands  Department,  the Antiquities and Monuments Office,  the Environmental 
Protection Department and the Government Property Agency where appropriate. 

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