As costs spiral, we should review needs of construction industry

Hong Kong is an expensive place to build anything, a problem made worse by too many infrastructure projects chasing too few workers

PUBLISHED : Friday, 10 March, 2017, 1:12am
UPDATED : Friday, 10 March, 2017, 1:12am

When it comes to accolades, Hong Kong is second to none. But the latest title bestowed upon us is one that we could do without. Data compiled by Arcadis, a construction and consultancy agency, shows Hong Kong is the most expensive place to get anything built after New York City. Indeed, the news should not come as a surprise. Cost overruns for key infrastructure projects have become all too common. The delays and cost overruns call into question not only our reputation as a showcase of world-class engineering marvels but also our capacity to work on several large projects at the same time.

The problem owes much to our insatiable appetite for construction and development. If the decision by former chief executive Donald Tsang Yam-kuen to launch the so-called 10 mega infrastructure projects – such as the high-speed railway to Guangzhou and the Hong Kong-Macau-Zhuhai bridge – did not already stretch manpower and resources to the limit, the commitment by the current administration to build nearly half a million flats over the next few decades will surely do so. The burden is further compounded by the Legislative Council sitting on a backlog of public works funding proposals. The filibustering by pan-democratic lawmakers has not only stalled the pace of development, it has also added to costs. This is to be deplored in a city already notorious for being one of the world’s least affordable places to live and work in.

Hong Kong the most expensive Asian city to build anything in, survey reveals

The delays are also driving workers to seek jobs in Macau. Thanks to its construction boom, the former Portuguese enclave is aggressively taking in workers from wherever it can find them. According to the Arcadis study, construction costs in Macau are only second to Hong Kong in Asia. But unlike Macau’s open-door programme for overseas workers, Hong Kong still adheres to a conservative labour importation policy. Strong opposition from unions means we are often left with insufficient manpower to deliver projects on time and within budget.

So long as local supply falls short of demand, labour importation is the only way forward. While officials should step up efforts to attract more locals to the construction industry, it also needs to address the concerns of unions and come up with a better mechanism to ensure adequate labour supply in a timely manner.

There should also be a more critical assessment of the city’s construction capacity in the long run. However stellar our civil engineering credentials are, there is a limit as to how many projects the city can take on at one time. The review should be high on the agenda of the next government.