Hong Kong government to submit construction sector bill to regulate contracts, speed up adjudication in financial disputes
- Development Bureau plans to submit Construction Industry Security of Payment Bill on May 29, with hopes to pass this year and begin implementation mid-2025
- Proposals also aim to ensure timely payment, with bureau spokesman pointing to recent high-profile case where subcontractors were reportedly not reimbursed for years
The Hong Kong government will put forward a bill to better regulate contract terms in the construction industry and establish a new binding mechanism to speed up adjudication of financial disputes to ensure contractors will be paid on time.
The Development Bureau said on Thursday it planned to submit the Construction Industry Security of Payment Bill to the legislature on May 29, with the aim to get the green light within this year and begin implementing the changes in new contracts from mid-2025.
A bureau spokesman stressed the significance of the bill given the liquidation in March of prominent contractor Fung Cheung Kee, which was reported to have delayed payment to a subcontractor for years.
“If the sector can improve its payment practices, we can avoid affecting the employees of all parties involved because of unhealthy finance,” he said.
A construction industry labour union has said the decades-old contractor owes HK$150 million (US$19 million) to subcontractors, suppliers and employees.
Under the bill, companies will not able to deny or defer payment to a claimant on the grounds they are waiting for funds from other parties.