Early errors not the last

PUBLISHED : Tuesday, 16 November, 1993, 12:00am
UPDATED : Tuesday, 16 November, 1993, 12:00am
 

IN the heady days of Hong Kong's early planning for the new Port and Airport Development Strategy - (when the whole PADS project was supposed to cost $127 billion) - the Government took the controversial decision to draw up ''fixed-price contracts''. Winning tenders for all PADS projects were to be priced taking inflation into account, to prevent contractors pushing up the price of construction as the work got underway. Cost over-runs were to be a thing of the past, even though the actual costs - now put at $163 billion for the Airport Core Programme alone - would inevitably be much higher than Lord Wilson's 1989 figure.


Yet cost over-runs are still with us. The Director of Audit has uncovered $54 million in additional fees paid out on seven consultancy contracts.


It would be nice to believe these mistakes will be the last. The Works branch responsible for drawing up the contracts claims they were made during the initial stages, when the Government was still switching over to fixed-price agreements.


Sadly, it is more likely these will merely be the latest mistakes to be detected. Unlike the Works Branch, the Provisional Airport Authority (PAA) is a statutory body whose books are not subject to inspection by the Director of Audit. The PAA last month agreed to stump up an extra $50 million for altering the design contract for the airport terminal. It is no good subjecting contractors to fixed-price agreements, if the PAA is free to change the specifications after two years, whatever the cost to the taxpayer.


The Director of Audit has asked for statutory bodies to be brought under his scrutiny. It is time the Government paid attention. The use of taxpayers' money must be tightly controlled.


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Early errors not the last

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