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Following is the text (English only) of the speech by the Secretary for Works, Mr Lee Shing-see, at the "90th Anniversary Symposium: Engineering and You" held at the University of Hong Kong today (30 November 2001):
Professor Lee, distinguished guests, ladies and gentlemen,
It gives me great pleasure to address you all at this memorial moment.
I am very impressed by the development of the Faculty of Engineering, which is one of the two faculties when the University of Hong Kong started off in 1911. During these ninety years, the number of engineering graduates has multiplied from 12 to some 900. In 2000, the University conferred degrees in 26 programmes of study in a broad spectrum of core as well as emerging engineering disciplines. The exponential growth is not only a testimony of academic pursuits, but is also a response to the need of the community.
Today, I would like to speak on a topic the result of which is very much dependent on our engineers, that is, The Prospect of our Construction Industry. I shall focus on two markets and two reviews.
Local Market
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Construction industry relates to many facets of human life. It is also a main pillar of our economy, contributing to about 5 to 6% of our GDP. The Government has always accorded priority in infrastructure development improving our living environment and quality of life.
In October, the Chief Executive delivered his Policy Address underlining the importance of infrastructure. Despite the prospect of a huge budget deficit this financial year, the SAR Government will continue with its huge investment on infrastructure.
The Chief Executive mapped out a mega investment plan which consisted of $400 bn investment in the Government's own capital works programme and $200 bn investment in railways. This is almost 4 times of the Airport Core Programme of about $150 bn. The investment will substantially enhance our infrastructure, meeting community needs and supporting the forthcoming economic restructuring. The new projects will provide business opportunities for local companies and create new jobs for people in Hong Kong relieving their hardship at this particular time.
Our capital works programme consists of about 1,600 projects. Some major projects include Route 10 from North Lantau to Tuen Mun, Route 9 from Shatin to Tsing Yi, the Shenzhen Western Corridor, South East Kowloon Development and the remaining Central and Wanchai Reclamation. Altogether, we are prepared to spend $400 bn within a time frame of about 9 years.
Besides public works, Government will heavily invest on railways. Railways are environmentally-friendly and efficient mass carriers. Locating future strategic developments along rail alignments will reduce reliance on road-based transport, enhance the efficiency of the rail network, and ensure affordable fare levels. The total investment of new railways is about $200 bn. About $100 bn of it would be spent on six committed railway projects including the West Rail, the Tseung Kwan O Extension, the Ma On Shan Line, the KCR Extension to Tsim Sha Tsui, the Penny's Bay Rail Link and the Sheung Shui to Lok Ma Chau Spur Line. The other $100 bn will be invested on six new projects to be completed in the coming 15 years, comprising the Sha Tin to Central Link, the Island Line Extensions, the Kowloon Southern Link, the Regional Express Line, the Port Rail Line and the Northern Link.
All these infrastructure projects will improve the living standard of Hong Kong. They will also create job opportunities in the short term to help those who may be suffering from unemployment now. To give you some indication, among the $400 bn committed investment in our capital works programme, about $90 bn, consisting of 170 projects, is newly added this year. The newly added projects include examples like the Final Phase of the School Improvement programme at $8 bn, 64 new leisure and cultural projects at $9 bn, the Shenzhen Western Corridor at $2.8 bn, etc. They alone will create about 15,000 employment. In addition, we have decided that in order to further increase the creation of new employment, the works departments will expand their minor works programme substantially generating another 5,000 jobs. Therefore, we are creating totally 20,000 jobs. These are all new jobs arising from new initiatives and are extra over those projects committed in the past.
Mainland Market
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Apart from the local market, we should not underscore the potential of the Mainland Market. China's recent accession to the World Trade Organization will usher a new era in the development of the global trade. The integration of China into the international economic system offers many new opportunities for both China and the rest of the world.
Hong Kong enjoys excellent competitive edges in many areas. We are well-placed to play a vital role in the growing Mainland market. The opening up of the key services sector in the Mainland will unleash a whole range of opportunities for professionals from Hong Kong as well as overseas.
In particular, certain restrictions and barriers hindering Hong Kong contractors participating in PRC projects will be phased out in stages. For example, Joint Ventures with majority foreign ownership will be allowed upon accession. Wholly foreign-owned enterprises will be permitted within 3 years for undertaking foreign-funded projects as well as certain Chinese invested projects. The challenge now is for professionals of Hong Kong to move ahead of the times to capture the Mainland markets.
Government also stands ready to provide facilitation as far as possible. Over the years, Works Bureau has organized a number of conferences and mission visits to various key cities of the Mainland, promoting our professional services in China. More recently, we have been negotiating with our Mainland counterparts on the co-operative agreement on the exchange of business information. All these measures are taken to help the business exporting our construction services to the Mainland.
PWP Procedural Review
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Back to Hong Kong, we have recent calls from the engineering and related circles to streamline our public works procedures. In the past two to three years, there have been many criticisms about the lengthy pre-construction process of public works projects which often ran up to 6 years or more before starting construction. There are many reasons for it, such as lengthy environmental impact assessments, rounds of public consultation and debates, lengthy gazetting process, resolution of public objections and complicated land resumption process.
A few months ago, the Works Bureau working in consultation with other policy bureaux have come up with a much shortened procedure. This was done by either fast-tracking individual tasks or taking parallel actions. For example, we have already revised our procedures in the past two months to allow projects to be tendered before funding is approved. We have also consulted the Advisory Council on the Environment and obtained its support to our proposal of gazetting non-environmentally sensitive projects under our ordinances in parallel with the EIA process. This alone will bring forward the gazetting and approval of projects by as much as 9 months. We are now simplifying our preliminary project feasibility study requirements. Under new requirements, a study could be completed in about 4 months instead of one year. The administrative procedure of land resumption will also be simplified to shorten the time spent on land resumption and clearance. With all these measures, we reckon that in future a medium size project can start construction in less than 4 years instead of the previous 6 years.
We will continue to look for improvement measures. Another area that we are now looking at is the statutory procedures. We all know that it could take many months to get a project through all the legal procedures. We are reviewing these legal requirements and will consider whether any of the laws could be improved to make the overall process shorter and more efficient.
With much shortened procedures, many of our public works projects can come on stream earlier, and we will have the capability to undertake more projects.
Industry Review
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To handle the voluminous projects in the pipeline, we may need to rethink the whole methodology of the current industry practices.
Early this year, the Construction Industry Review Committee (CIRC), under the chairmanship of the Honourable Henry TANG, completed the review and submitted a report to the Chief Executive. In its report entitled "Construct for Excellence", the CIRC recommended a package of 109 improvement measures aiming to substantially lift the quality and cost-effectiveness of the construction industry. Emphasis is placed on a major culture change in order to achieve an integrated construction industry that is capable of continuous improvement towards excellence in a market-driven environment.
The Works Bureau has in June this year formulated a strategy in taking forward the CIRC recommendations, and is currently making steady progress.
Responsibilities for policy issues and regulatory requirements affecting the construction industry are dispersed among several bureaux and departments. With the support of the CIRC and the construction industry, Works Bureau (WB) has been assigned to assume a lead role within the Government to foster better co-ordination on construction-related matters and to maintain an overview of all issues concerning the industry. WB will be regularly monitoring the progress of implementing the CIRC recommendations, and will conduct a full review of the overall progress in three years' time.
The CIRC has identified the need to establish a statutory industry co-ordinating body as a key building block for the future success of the construction industry. It has recommended that the industry co-ordinating body should have a permanent secretariat and be funded by the industry through construction levies.
Pending establishment of the statutory body, which will involve legislation and substantial input from the industry, the Government has set up the Provisional Construction Industry Co-ordination Board in September 2001. The experience gained by the provisional board will be expected to facilitate the efficient and effective development of framework and legislation for early formation of the statutory body. The provisional body will serve as the main channel for the Government to seek the industry's feedback on strategic matters impacting on local construction, and will become the focal point for implementation of improvement measures requiring co-ordinated input from the industry.
Ladies and gentlemen, the SAR Government is fully committed to the infrastructural development in Hong Kong, to improve the living environment, to spur the economy and to create job opportunities. With Mainland's accession to WTO, there will be plenty more opportunities for Hong Kong. I am therefore very confident that despite of the difficult times that we are going through, our construction industry will continue to prosper.
In closing, I wish to commend all staff, professors and graduates of the Faculty of Engineering. I also pay tribute to our predecessors. Without your dedicated support, Hong Kong would not have become an international city. I hope the Faculty can build on solid foundations with the community. And we can press onward with new strengths.
Thank you.
End/Friday, November 30, 2001
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