HK$100 billion earmarked for infrastructure projects
Financial secretary warns care must be taken to gradually roll out projects to avoid rocking the economy
Infrastructure spending in the coming financial year will edge up to HK$100 billion and care has to be taken to roll out projects evenly to avoid rocking the economy, the financial secretary warned on Wednesday.
Delivering his budget speech, Paul Chan Mo-po said capital works expenditure was expected to remain at a “relatively high level” in the next few years.
Raising concern about lawmakers’ delaying projects, he said: “I appeal to [Legislative Council] members to stop frustrating deliberations on funding proposals by filibustering tactics, so that livelihood projects can commence as early as possible for the benefit of the public.”
The government should also “minimise drastic fluctuations in the volume of construction to avoid affecting the jobs and livelihood of the construction sector and causing spillover to other trades, which could ultimately rock the economy”.
Capital expenditure is forecast to be HK$107.2 billion for 2017-18, including HK$86.8 billion for capital works.
Infrastructure spending will also rise in the next four years: Spending of the Capital Works Reserve Fund would increase to HK$104 billion in 2018-19, and to HK$130.8 billion in 2021-22.
Infrastructure will account for the biggest part – 18.1 per cent – of total government expenditure in the coming year, followed by education (17.8 per cent), social welfare (16.4 per cent) and health (14.2 per cent).
Lawmaker Edward Yiu Chung-yim explained that the city was entering a “construction peak period” as the government will have to pay for a host of projects which started in the past decade.
They include a HK$200 billion hospital development, the HK$31.9 billion Kai Tak Sports Park, a slew of railway projects and new town developments.
He warned that the government would only be able to cover the costs if the economy remained stable in the next five years as infrastructure projects are funded by revenue from land sales.
“If there is an economic downturn and the government ends up earning less from land sales, then we might be in danger of running a deficit,” Yiu said.
“The government will then have to fork out the money from other funds and that might, in turn, affect people’s livelihoods,” he added.
Some HK$12.4 billion for a bundle of 9,428 public works had stalled in early February after legislators called for controversial projects to be removed from the package for further scrutiny.
On the delays, the Construction Industry Council, the statutory body representing the sector, said: “Vetting and approval of funding applications of works projects should be on schedule and evenly distributed throughout the year.
“A healthy and steady development of the construction industry relies on a sustainable and stable volume of construction works.”