|
Sewage Services Operating Accounts 2001/02
OPERATING ACCOUNTS
FOR THE YEAR ENDED 31 MARCH 2002
REVIEW OF THE YEAR 2001/02
ACTIVITIES
| • |
Volume of sewage treated is 890 million cubic metres,
representing an increase of 2.8% over the previous year. |
FINANCIAL PERFORMANCE
| • |
Revenue increased by 91.9% (including mediation settlement) |
| • |
Revenue decreased by 8.2% (excluding mediation settlement) |
| • |
Expenditure increased by 6.9% |
| • |
Deficit decreased by 94.6% (including mediation settlement) |
| • |
Deficit increased by 24.9% (excluding mediation settlement) |
| • |
Subsidy by Government for 2001-02 is $33.6M (including mediation
settlement) |
| • |
Subsidy by Government for 2001-02 is $783.6M (excluding mediation
settlement) |
|
|
|
OPERATING ACCOUNT FOR THE
YEAR ENDED 31 MARCH 2002
| |
Note |
2002
$ Million
|
2001
$ Million
|
| Revenue |
2 |
1437.6*
|
749.1
|
| Expenditure |
3 |
1,471.2
|
1,376.5
|
Deficit
|
|
(33.6)
 |
(627.4)
|
| Representing: |
|
|
|
| Subsidy by Government |
4 |
33.6
|
627.4
|
| FINANCIAL PERFORMANCE MEASURES |
| Deficit as percentage of expenditure |
2.3%
|
45.6%
|
| Increase/(decrease) in deficit ($M) |
(593.8)
|
14.8
|
|
*The figures have taken into account the concessions
of $44.7M and $9.5M for Sewage Charge and Trade Effluent Surcharge
respectively as announced in the 2002 Budget Speech and the inclusion
of the mediation settlement of $750M as further disclosed in Note
2.
The annexed notes form part of
these accounts.
|
|
|
BALANCE SHEET AS AT 31 MARCH 2002
| |
Note |
2002
$ Million
|
2001
$ Million
|
| Net assets employed |
|
|
|
| Fixed assets |
1(b), (c), (d) and 5 |
20,072.9
|
18,642.5
|
Current assets
|
6 |
584.6
|
134.6
|
| Current liabilities |
7 |
(1,376.1)
|
(1,191.7)
|
| Net current liabilities |
|
(791.5)
|
(1,057.1)
|
| |
|
19,281.4
|
17,585.4
|
| Financed by |
|
|
|
| Public capital account |
8 |
19,281.4
|
17,585.4
|
The annexed notes form part of these accounts.
|
|
|
1. Accounting Policies
| (a) |
Basis of Accounting
The accounts have been prepared on the historical cost basis
of accounting modified to include notional receipts and payments.
Although the services incur a deficit in the year, the accounts
are prepared on a going concern basis on the assumption that
the deficit will be met by a corresponding subsidy from the
Government. |
| (b) |
Fixed Assets
| (i) |
No cost is included for land. |
| (ii) |
By a Resolution passed by the Legislative Council on
26 July 1995, the assets comprising the public sewerage
systems and sewage disposal facilities under the control
of the Director of Drainage Services on 31 March 1995
as set out in the document titled “Inventory of Public
Sewerage Systems and Sewage Disposal Facilities as at
31 March 1995” were appropriated to the Sewage Services
Trading Fund (SSTF) at a zero valuation. Upon closure
of the SSTF, these assets have been reverted to the Government.
The net book values of these assets are shown in note
5. |
| (iii) |
All sewerage projects are accounted for in the financial
year following the year of commissioning and subject to
depreciation. |
| (iv) |
Fixed assets costing $100,000 or more each are incorporated
in the accounts at the cost of acquisition and subject
to depreciation. |
|
| (c) |
Projects under Development
| (i) |
For capital projects, the costs include the actual direct
expenditure, and staff costs for design, planning and
supervision during the construction period. |
| (ii) |
Expenditure incurred on all sewerage projects funded
under the expenditure vote of Drainage Services Department
(DSD) and other works departments is capitalized as projects
under development. Following the year of commissioning
of the projects or part thereof, the related expenditure
incurred will be transferred to fixed assets. |
|
| (d) |
Depreciation
| (i) |
Depreciation is provided on a straight line basis calculated
to write off the cost of the assets less residual value
over their estimated useful lives. |
| (ii) |
The annual rates of depreciation used are :-
Sewage treatment works
| • |
Civil works |
2%
|
| • |
Electrical and mechanical equipment |
6% - 7%
|
Pumping stations
| • |
Civil works |
2%
|
| • |
Electrical and mechanical equipment |
4%
|
| • |
Rising mains |
4%
|
Infrastructural assets
| • |
Tunnel sewers |
1%
|
| • |
Sewers |
2.5%
|
| • |
Outfalls |
2%
|
| Leasehold improvements |
33% - 35%
|
| Computer systems, equipment and vehicles |
12.5% - 20%
|
|
|
|
|
|
2. Revenue
| |
2002
$ Million
|
2001
$ Million
|
| Sewage charge |
412.2
|
456.8
|
Supplies to Government establishments
|
22.1
|
23.0
|
| Trade effluent surcharge |
226.6
|
239.8
|
| Other income |
776.7*
|
29.5
|
| |
1,437.6
|
749.1
|
| * |
It includes the mediation settlement of $750M relating to
the contractual disputes between the Government and the sewer
tunnel contractors concerning the Government’s re-entry
of the sites and forfeiture of the sewer tunnel contracts as
disclosed in Note 9 “Post Balance Sheet Events” of
Sewage Services Operating Accounts 2000-01. A Settlement Agreement
was executed between the contractors and the Government in September
2001, which stated that the contractors should pay to Government
a total of HK$750 million in full and final settlement of Government’s
Claims. |
|
|
|
3. Expenditure
| |
2002
$ Million
|
2001
$ Million
|
| Staff costs |
545.8
|
521.2
|
Light and power
|
149.4
|
127.8
|
| Sludge disposal |
22.6
|
28.7
|
| Chemical |
30.5
|
29.4
|
| Operation and maintenance expenses |
280.9
|
266.8
|
| Rental and management charges |
15.1
|
14.6
|
| General operating expenses |
127.7
|
140.9
|
| Depreciation |
299.2
|
247.1
|
| |
1,471.2
|
1,376.5
|
|
|
|
4. Subsidy by Government
The subsidy by the Government is to cover the costs
of provision of free allowance to domestic consumers, concessions
for Sewage Charge and Trade Effluent Surcharge as announced in the
2002 Budget Speech, and part of the operating cost of the Sewage
Services Utility.
|
|
|
5. Fixed Assets
| |
Sewage Treatment Works
$Million
|
Pumping Stations
$Million
|
Tunnel, Sewers and
Outfalls
$Million
|
Leasehold Improvements
$Million
|
Computer Systems,
Equipment and Vehicles
$Million
|
Projects Under Development
$Million
|
Total
$Million
|
| Cost |
|
|
|
|
|
|
|
| At 1 April 2001 |
3,011.4
|
1,500.1
|
2,542.9
|
2.4
|
84.3
|
12,106.6
|
19,247.7
|
| Additions |
-
|
-
|
-
|
-
|
23.0
|
1,706.6
|
1,729.6
|
| Transfers from projects |
|
|
|
|
|
|
|
| under development |
413.2
|
327.0
|
918.4
|
-
|
-
|
(1,658.6)
|
0.0
|
At 31 March 2002
|
3,424.6
|
1,827.1
|
3,461.3
|
2.4
|
107.3
|
12,154.6
|
20,977.3
|
| Aggregate depreciation |
|
|
|
|
|
|
|
| At 1 April 2001 |
318.3
|
112.2
|
139.1
|
2.4
|
33.2
|
-
|
605.2
|
| Charge for the year |
142.3
|
56.9
|
84.3
|
-
|
15.7
|
-
|
299.2
|
At 31 March 2002
|
460.6
|
169.1
|
223.4
|
2.4
|
48.9
|
-
|
904.4
|
| Net book value |
|
|
|
|
|
|
|
| At 31 March 2002 |
2,964.0
|
1,658.0
|
3,237.9
|
0.0
|
58.4
|
12,154.6
|
20,072.9
|
| At 1 April 2001 |
2,693.1
|
1,387.9
|
2,403.8
|
0.0
|
51.1
|
12,106.6
|
18,642.5
|
| As referred to in note 1(b)(ii), the assets which
were appropriated to the SSTF at a zero valuation and reverted
to the Government upon its closure have a net book value as
at 1 April 2001 of $5,722.5M. After taking into account depreciation
of $253.5M for 2001-02, the net book value of these assets as
at 31 March 2002 was $5,469.0M. |
|
|
|
6. Current Assets
| |
2002
$ Million
|
2001
$ Million
|
| Debtors and prepayments |
583.4
|
133.6
|
Bank
|
1.2
|
1.0
|
| |
584.6
|
134.6
|
|
|
|
7. Current Liabilities
| |
2002
$ Million
|
2001
$ Million
|
| Creditors |
21.6
|
6.9
|
Current account with Treasury
|
1,354.5
|
1,184.8
|
| |
1,376.1
|
1,191.7
|
|
|
|
8. Public Capital Account
The Public Capital Account represents Government’s
investment in sewage services.
| |
2002
$ Million
|
2001
$ Million
|
| Balance as at 1 April |
17,585.4
|
15,744.5
|
Deficit for the year
|
(33.6)
|
(627.4)
|
| Additional cash investment by the Government |
1,729.6
|
2,468.3
|
| Balance as at 31 March |
19,281.4
|
17,585.4
|
|
|
|
9. Capital Commitments
| |
2002
$ Million
|
2001
$ Million
|
| Captial expenditure contracted for |
7,140.0
|
5,500.0
|
Capital expenditure authorised but
|
2,640.0
|
5,100.0
|
| not yet contracted for |
|
|
| |
9,780.0
|
10,600.0
|
|
|
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