The Hong Kong government carries a heavy responsibility as a major procurer of goods and services. While there are well-established procurement guidelines to ensure value for public money, fair competition and accountability, irregularities may still occur, as in the latest
suspected water procurement fraud. Officials must expeditiously find out what went wrong and learn from the episode.
The controversy came to light last Saturday when the Government Logistics Department announced it had
“partially terminated” a bottled water supply contract with Xin Ding Xin Trade Co Ltd, citing doubts over the company’s ability to fulfil the deal, which covers the supply of “XinLe” bottled water manufactured by Robust (Guangdong) Drinking Water’s Guangzhou branch to government offices on Hong Kong Island and some outlying islands starting from the end of June for 36 months.
Investigations showed the contracted firm had no business dealings with the Guangzhou-based company and instead sourced products from another
supplier in Dongguan. The police
arrested a man and a woman in connection with the case on Sunday and will investigate further together with the mainland authorities.
The scandal has raised questions over the
procurement process, including whether the bidders and products are subject to integrity and quality checks. It was found that the company had won three other chemical contracts; the authorities cancelled them following the incident. There are also queries as to why the water contract was awarded despite being considerably costlier.
According to details published by the logistics department, the company would supply 1.88 million bottles of water at a price of HK$52.9 million (US$6.8 million), which translated to over HK$28 per bottle, whereas the winning tenders for government offices in Kowloon and the New Territories offered bottled water of other brands at HK$23.80 and HK$26 per bottle, respectively.
With some 30,000 bottles in question distributed to different districts before being impounded, the health concerns are understandable. The government has taken the right step to replace the products in the meantime, even though test results showed the drinking water from all suppliers complied with the safety standards.
