Department takes over 3 flat projects

PUBLISHED : Friday, 17 February, 2006, 12:00am
UPDATED : Friday, 17 February, 2006, 12:00am

Builder that lost $1.3b contracts considers options

The Housing Department is taking over a construction company's three building sites today despite facing legal action after terminating its contracts this week.

The decision to take over the Dickson Construction projects was disclosed after a joint meeting of the Housing Authority's tender and building committees yesterday.

The three sites, one in Aberdeen and two in Fanling, comprise more than 7,000 flats and are worth more than $1.3 billion. Completion will be delayed for more than a year.

The department is terminating Dickson's contract because of delays blamed on shortages of manpower and materials.

Dickson Construction has told the department it is considering applying for a court injunction.

'It is an unprecedented case,' housing chief Thomas Chan Chun-yuen said yesterday. 'We have to make a decision now, having given ample time for the contractor to improve its performance.'

The department says just one or two storeys of the Fanling buildings have been completed. Mr Chan said the department would take 'appropriate action' to recover extra costs. The projects will be retendered next month.

Dickson Construction might be barred from tendering for government projects if it showed no improvement in financial capability and performance by September. Last September it was banned from tendering for six months. Building committee chairman Ip Kwok-him said the department had been 'decisive'. Site monitoring had been effective but it had not decided to take over the sites until months after the delay was discovered in the middle of last year.

'We have been closely monitoring the work progress through regular inspections and meetings,' Mr Ip said. 'The authority needs time to contemplate its action because it involves legal issues.'

More than 20 residents from Wong Chuk Hang Estate protested yesterday outside the Housing Department's headquarters against the delay in the Aberdeen project.

They are among the 1,400 households having to wait another year to move to the new public housing estate in Aberdeen.

'The delay could have been shorter if the government had acted more quickly,' spokesman Cheung Wai-mei said. 'The government has failed to monitor the contractor, and it's the residents who suffer.'

Wong Kwun, chairman of the Federation of Hong Kong, Kowloon and New Territories Public Housing Estates Residents and Shop-owners Organisation, said the authority was being 'too lenient'.

'It's unacceptable, considering the department knew about the delay for months before taking action,' he said. 'The Audit Commission needs to investigate.'

An Audit Commission spokesman said it had received one complaint, on Wednesday. 'He promised to provide further information on the company,' he said. 'The commission has not yet considered opening a file on the case.'

Dickson Construction declined to comment yesterday.