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Budget Speech by the Financial Secretary (6)

Investing in Infrastructure

55. We will continue to invest heavily in infrastructure to promote economic development, create employment opportunities and enhance the long-term competitiveness of Hong Kong.  In 2009-10, capital works expenditure reached $45.1 billion.  Construction works for the Hong Kong-Zhuhai-Macao Main Bridge, site formation works for the new cruise terminal, and the Central-Wan Chai Bypass project all began at end-2009. The works for the Hong Kong section of the Guangzhou-Shenzhen-Hong Kong Express Rail Link project also started in January this year.

56. The estimated capital works expenditure for 2010-11 will increase to $49.6 billion.  Major works projects expected to start include the Kai Tak Cruise Terminal Building and ancillary facilities, Hong Kong-Zhuhai-Macao Bridge Hong Kong boundary crossing facilities, Harbour Area Treatment Scheme Stage 2A, and Town Park, Indoor Velodrome-cum-Sports Centre in Area 45 of Tseung Kwan O.  With many projects entering their construction peaks, I estimate that the capital works expenditure for each of the next few years will be at an all-time high of over $50 billion.

57. With the implementation of various projects including "Operation Building Bright", the employment situation in the construction sector has improved significantly. The unemployment rate of the sector has dropped continuously from its peak of 12.7 per cent last year to 7.4 per cent recently.  On the other hand, we will closely monitor the construction industry's delivery capacity to avoid the bunching of projects that may result in an upsurge in wages and construction costs, or calls from the market for the importation of labour.

58. We are also mindful of the ageing problem and possible skills mismatch in the construction workforce.  Currently, the Construction Industry Council (CIC) strives to attract more people, especially young people, to join the construction industry through training and trade testing.  Furthermore, the CIC aims to enhance the skills and competitiveness of in-service construction workers and to uplift the image of the industry through promotion and public education.  Together with the industry, we will take the lead to introduce best practices in public works projects to further improve the safety, working environment and conditions in construction sites.  I will also earmark $100 million to support the CIC to strengthen the relevant work, and I expect that the CIC will increase its investment in tandem with this funding to provide the necessary incentives to attract more young people to join the construction industry and to improve the practice of the industry.  We believe that these measures can help attract fresh blood to the industry and meet the manpower needs of future construction projects.

Promoting the Development of Industries

59. In his Policy Address, the Chief Executive pointed out the need to promote the development of innovation and knowledge-based industries.  These include the four traditional pillar industries, namely financial services, tourism, trading and logistics, and professional services, and six industries where we enjoy clear advantages.  The six industries are medical services, education services, environmental industries, testing and certification, innovation and technology, and cultural and creative industries.

60. In 2008, the private enterprises of these six industries made a direct contribution of eight per cent to the GDP and employed about 380 000 people, representing about 11 per cent of the total workforce.  The role of the Government is to provide a conducive environment for the development of these industries under the principle of "Market Leads, Government Facilitates".  We will provide the necessary support in land resources, human capital and incentives to facilitate the diversification of industries under the market mechanism.  The Government has started to roll out the initiatives put forth in the Policy Address, and I will provide the necessary financial support.

Optimising Land Resources

Revitalising Old Industrial Buildings

61. To promote the development of the six industries and inject new impetus into old industrial areas, the Chief Executive has put forward measures to revitalise old industrial buildings in his Policy Address.  To facilitate the redevelopment or conversion of industrial buildings by owners, the Lands Department will set up a dedicated team on 1 April 2010 to process such applications centrally.  Other departments involved will also exercise flexibility in considering applications for wholesale conversion of industrial buildings, taking into account the constraints of existing industrial buildings.

62. The Government will also take the lead in injecting impetus to the revitalisation of industrial buildings. Where appropriate, we will consider making use of old industrial buildings in the relocation of our offices and facilities.  For example, we have completed a study on relocating government departments in the three government office buildings at the Wan Chai waterfront.  As and when appropriate we will relocate the departments concerned to other districts to free some land in the central business district.  We will study the feasibility of making use of industrial buildings in drawing up the relocation plans.  Moreover, we will consider relocating government offices currently accommodated in commercial office premises to industrial buildings upon expiry of their tenancies.

Reserving Sites for Our Industries

63. We are inviting expressions of interest to develop private hospitals on four reserved sites as announced in the Policy Address.  The invitation will close at end-March this year.  We will formulate the land disposal arrangements in light of the response and views from the market.

64. Regarding education services, apart from the two urban sites and three sites in the New Territories reserved earlier, we will reserve a further site at the former Queen Hill's Camp in the New Territories to establish a self-financing tertiary institution.  We estimate that the site will provide a gross floor area of more than 100 000 square metres and is suitable for the development of a self-financing tertiary institution with boarding facilities.  The institution is expected to provide some 8 000 self-financing degree places.  We expect to launch an Expression of Interest exercise by the end of this year to invite development proposals from institutions and education bodies.  Moreover, the Finance Committee of this Council approved early this month an additional $2 billion loan commitment for post-secondary education providers to develop or refurbish campus premises.  All these measures will help increase the number of places for tertiary education and facilitate the diversified development of the higher education sector, thereby strengthening Hong Kong's status as a regional education hub.

Strengthening Manpower Training for Our Industries

65. To support the development of the six industries, the Vocational Training Council and various tertiary institutions have been offering programmes to nurture talent.  For example, the Vocational Training Council provided an additional 210 places in its higher diploma programmes on testing and certification as well as environmental and related studies in the 2009 academic year, and will provide 310 additional places in the 2010 academic year.  Upon commissioning of its new campus in Tseung Kwan O in the 2010 academic year, the Hong Kong Design Institute will provide about 4 500 places for training design students.  The Academy of Film recently established by the Hong Kong Baptist University, and the various design and creative media programmes to be launched at the end of this year by the Hong Kong campus of the Savannah College of Art and Design situated at the former North Kowloon Magistracy, will help nurture more creative talent for Hong Kong.

66. To get a better grasp of the manpower situation of the six industries, we will conduct another round of manpower projection in the first half of this year.  The relevant policy bureaux will implement appropriate measures and ensure the provision of suitable training in light of the findings.  We will ensure that there will be sufficient manpower and professionals to meet the development needs of the industries.

67. In addition, under the Qualifications Framework we have already set up industry training advisory committees for 13 sectors, covering about 30 per cent of the labour force.  These committees set out the skills, knowledge and outcome standards required of employees in those sectors to encourage training providers to design training courses that meet the needs of the sectors.  We will further promote the Qualifications Framework to enhance vocational education and training relevant to the industries.

(To be continued)

Ends/Wednesday, February 24, 2010
Issued at HKT 11:47


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