UDL Holdings, one of Hong Kong's largest marine works contractors, has been barred from tendering for further Works Bureau contracts because of poor performance on government work. The move is a further blow to the company which has been badly hit by the slowdown in construction - particularly reclamation projects - which has caused cash-flow problems. Government sources confirmed the decision, which was expected to be short-term. 'UDL has been temporarily suspended from tendering for future work after failure to perform satisfactorily,' one official said. He said the aim was to encourage UDL to devote more resources to its existing port-related works, rather than allow the company to continue to bid for new work. Industry insiders said the lack of reclamation projects meant the company's extensive dredging and marine works fleet was either mothballed or working at a fraction of full capacity. This in turn put pressure on costs. The firm has also been hit by payment delays on other contracts which exacerbated the situation. Last year UDL teamed up with mainland contractor China Construction in an effort to increase its workload. UDL chairman Leung Yat-tung has also proposed the Government introduce franchised concessions to speed future reclamation work. Under his plan, the Government would award a franchise to a contractor to reclaim land from the sea while officials decide the site's future use. Mr Leung said the planned Penny's Bay reclamation on Lantau Island could be a pilot project to test his concession idea. No one at UDL was available to comment on the Works Bureau's decision to suspend the contractor.