Public works contract system tightened after cost overruns

The screening of public works contractors has been tightened following a series of poor performances, including the expulsion of a mainland-linked firm from four contracts that cost taxpayers around $300 million last year, according to the Works Bureau.

In a written reply to a Legco question, Acting Secretary for Works Keith Kwok Ka-keung said yesterday that steps were being introduced to tighten the selection of contractors.

It was revealed yesterday that the expulsion of the Hong Kong arm of mainland-based Guangdong Water Conservancy and Hydro-power Engineering Development Company from four contracts due to poor performance would cost taxpayers $321.6 million after the contracts had to be re-tendered.

These include an extra $210 million for the upper River Indus flood-relief works, and the rest from the re-tendering of the Central and Wan Chai East Pumping Stations and Screening Plants projects and further developments in Tin Shui Wai.

The company was expelled from the contracts after falling behind schedule in a flood-relief project that caused heavy flooding along Ng Tung River in Sheung Shui last year.

Mr Kwok said that under the new controls on sub-contracting, contractors would be required to raise their capital and submit additional information for auditing. A contractor's bid would also be assessed using a new system based on both tender price and the firm's past performance.