The government must act against corruption in building renovation contracts

Owners should be protected against scams that see them footing huge bills for substandard work while contractors make a mint

PUBLISHED : Saturday, 01 October, 2016, 1:41am
UPDATED : Saturday, 01 October, 2016, 1:58am

One of the commonest and most lucrative sources of corruption in Hong Kong has been rigged renovation works on private housing estates. These usually involve multimillion-dollar scams, corrupt contractors and subcontractors, and a compromised owners’ incorporated committee.

One particularly notorious case has been The Garden Vista. Flat owners on the private housing estate in Sha Tin had paid a total of HK$260 million for the renovation, yet had to endure repeated delays as well as substandard and unfinished work.

At least seven people were implicated in the scam, but so far, only one person, Yau Shui-tin, has been jailed. The subcontractor was sentenced to 35 months this week after a guilty plea. He told the Independent Commission Against Corruption that he had conspired with six others to whom a total of HK$45 million had been paid. But so far, no one else has been charged.

Those named by Yau included a former chairman of the incorporated owners’ committee, a property manager, two consultants, a shareholder in an architects’ firm and a director of a construction firm. In other words, it allegedly involved senior people throughout the renovation project from contract bidding and hiring to repair works.

Bid-rigging scheme: Hong Kong judge jails renovation subcontractor, calls for more industry regulation

The ICAC said the investigation was continuing. We can only hope those responsible will be brought to justice. The Garden Vista is probably just the tip of the iceberg. Regulations currently require buildings older than 30 years to carry out inspections and, if found necessary, repairs and renovation. There are thousands of such buildings. Strangely, you have inspectors who monitor if private buildings and estates are adhering to safety standards but there is no dedicated authority to monitor renovation-related corruption.

A HK$5 million electronic tendering platform has been launched recently by the Urban Renewal Authority to help flat owners and their representatives sort out bidders and reduce the risk of manipulation and interference. But it’s not clear how useful it has been. Once a building has committed to renovation, it’s almost impossible for an individual flat owner to refuse to pay. This often creates an unexpected and huge financial burden. In the case of the Garden Vista, each of the 840 flat owners has had to pay between HK$200,000 and HK$340,000.

Authorities must make greater efforts to target corruption. Property owners deserve better than having to turn to the ICAC and police as a last resort.