Independent consultants offer key to cost efficiency of public projects

PUBLISHED : Wednesday, 10 December, 2014, 6:08am
UPDATED : Wednesday, 10 December, 2014, 6:08am

Independent consultancies should be given a bigger role in advising on the cost efficiency of infrastructure projects funded by public coffers, argues Arcadis's Kenneth Poon, who has been lobbying the Hong Kong government for years.

Poon, who has worked in the cost-management field since 1975, will next month become Asian chief executive at the Amsterdam-based global natural- and built-asset consultancy.

His comments come amid MTR Corp's uphill battle to convince lawmakers to hand over taxpayers' money to foot the extra bill for the Hong Kong section of a high-speed railway to Guangzhou - a project originally meant to have cost HK$65 billion.

Poon said surveyors had persuaded MTR Corp to include one of the shortlisted cost consultancies on its engineering teams.

"But that is not enough," he told the South China Morning Post. "We should actually be independent.

"I think the delivery of a lot of infrastructure projects in Hong Kong can be improved," he added, avoiding specific comments on the delayed Guangzhou-Shenzhen-Hong Kong railway, which will now not be completed until 2017.

Infrastructure projects currently had design and cost teams under one roof so there was no cross-checking, Poon said.

Although the infrastructure sector on the mainland was still "a very closely guarded market", Poon said he was encouraged to have been invited by the central government recently, together with some other Hong Kong-based consultancies, to be involved in a pilot programme to help manage projects that China has subsidised in countries such as Cambodia, Myanmar and Laos.

An Arcadis report found the mainland's built assets, including infrastructure and buildings, generated US$6.9 trillion last year, or 53 per cent of its gross domestic product. It forecast a rise to US$7.4 trillion this year.

The property market is still the biggest revenue generator for Arcadis on the mainland, but Poon said he saw potential in the infrastructure sector as the authorities eased restrictions on foreign participation and, in particular, offered a higher chance of winning deals for cross-regional projects.

Arcadis is also bringing its expertise in natural assets. It is part of a consortium of eight Dutch companies leading an economic assessment of the viability of building a dam stretching 60km to 100km east from the coast near Xiamen to capture power from tides through a network of 4,000 turbines that could generate up to 15 gigawatts of energy.

"The environment and water could be a bigger business [than property] in 10 years' time," Poon said.