Paul Chan

More than HK$10 billion can be cut from public works projects, Hong Kong development chief says

Paul Chan Mo-po writes in weekly blog that savings to come by ‘optimising design plans’ but does not give specifics

PUBLISHED : Sunday, 01 January, 2017, 7:01pm
UPDATED : Sunday, 01 January, 2017, 10:51pm

In response to rising concerns over cost overruns for a slew of infrastructure projects in recent years, the government sought to assure that it could shave off more than HK$10 billion from future public works projects.

The Project Cost Management Office, established under the Development Bureau in June, has examined more than 60 public works projects totalling an estimated HK$170 billion.

Secretary for Development Paul Chan Mo-po said in his weekly blog post on Sunday the government task force was able to cut costs by “optimising design plans” before they were due to be submitted to the Legislative Council for funding approval.

Chan did not identify which projects were reviewed and how it was able to scale down expenses.

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Unveiled by Chief Executive Leung Chun-ying during his policy address last year, the body was set up to address significant cost blowouts in some major projects, including the Hong Kong-Zhuhai-Macau Bridge, the Hong Kong section of the Guangzhou-Shenzhen-Hong Kong Express Rail Link, and the West Kowloon Cultural District.

The previous Legco session was marred by extensive filibustering by lawmakers opposing controversial bills, which led to a growing backlog of funding proposals that had yet to be scrutinised.

Lawmakers approved a massive HK$5.4 billion in extra funding for the Hong Kong-Zhuhai-Macau bridge last January after a month of debate.

Due to surging labour and material costs, the project now costs HK$35.9 billion.

Tony Tse Wai-chuen, a former lawmaker for the architectural, surveying and planning constituency, said he believed the government could be more aggressive with its cost-cutting measures.

A lot of previous government projects were too idealistic in the sense that they wanted them to be perfect in design and aesthetics
Tony Tse Wai-chuen, former lawmaker

“A lot of previous government projects were too idealistic in the sense that they wanted them to be perfect in design and aesthetics,” he said. “But there are ways to cut back on unnecessary designs and contractual arrangements without sacrificing too much of their functional and aesthetic elements.”

“It was an expected result and I hope the government can do better to save more costs,” he added, noting he believed construction costs were likely to stabilise in the coming year.

The bureau expected the annual expenditure on capital works to continue exceeding HK$70 billion as a number of major infrastructure projects were slated to come through the next few years.

The revised estimate for public works for the fiscal year ending last March reached HK$74 billion.

Chan also pledged in his blog post to not “sit back” in tackling thorny issues despite approaching the end of his term.

Chan highlighted four key issues – finding developable land, controlling construction costs, ensuring building safety and monitoring the quality of drinking water – that the bureau would continue to address in the new year.

“We will continue to move onward and upward despite the difficulties and listen to opinions from various stakeholders so that the public can benefit from the results,” he wrote.