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LCQ1: Measures to tackle problem of shortage of skilled workers in construction industry

     Following is a question by the Hon James Tien and a reply by the Secretary for Development, Mr Paul Chan, in the Legislative Council today (January 28):


     In the Policy Address recently delivered by him, the Chief Executive (CE) has stated that despite the measures rolled out in April last year to enhance the Supplementary Labour Scheme specifically for the construction industry in relation to public sector works projects, the relevant measures have yet to fully address the demand of the construction industry for skilled workers and there is a need to launch further enhancement measures.  If these measures still cannot effectively resolve the acute shortage problem of skilled workers in the construction industry, the Government will explore with the construction industry and labour sector the introduction of other more effective and appropriate measures to reduce the adverse effects of the problem on Hong Kong's economic and social development. In this connection, will the Government inform this Council:

(a) apart from the assessment made by the Construction Industry Council, whether the Government has made its own assessment on the future shortfall in skilled construction workers on the basis of the current number of additional new construction works projects; if it has, of the details; if not, why CE is able to provide specific figures on future housing supply while no estimation on the shortage of skilled construction workers has been made;

(b) of the specific details and implementation timetable of the "further enhancement measures" and "other more effective and appropriate measures" as mentioned by CE, and whether it will consider afresh the introduction of a special labour importation scheme for public housing and infrastructure works projects, by making reference to the practices adopted by the authorities for constructing the Hong Kong International Airport and carrying out the relevant works projects at Chek Lap Kok; and

(c) as CE has stated that if the shortage of skilled workers cannot be properly dealt with, it will seriously affect the implementation of public housing, hospital, school and public transportation projects, and will also indirectly lead to the escalation of construction costs, whether the authorities have assessed the economic and social losses to be caused to Hong Kong by such a situation?



     As the Chief Executive stated in his Policy Address, the Government will continue to implement infrastructure and public housing works and so on with a view to improving people's livelihood and meeting the needs of the community. Since 2013, the Government has worked with the Construction Industry Council (CIC) to assess the overall construction expenditure of both public and private sector works as well as the supply and demand of construction workers over a 10-year horizon.  According to the latest report on manpower forecast for construction workers released by CIC in October 2014, there will be a shortage of about 10 000 to 15 000 skilled workers in the construction industry in the coming years.

     My reply to the Hon Tien's question is as follows:

(a) On the forecast of the supply and demand of construction workers, CIC collects relevant data from the industry and the relevant government departments. They have formed a task force comprising representatives of the relevant trade associations, labour unions, professional bodies, the Development Bureau and the Census and Statistics Department, to formulate the methodology of the manpower forecast, and to discuss and endorse the results of the forecast. The manpower forecast takes into account latest forecast construction output of public and private sectors, the number of in-service workers and their age distribution, training and other relevant factors. CIC will regularly update the forecasts and promulgate its results. As CIC's forecasts are prepared with inputs from the industry stakeholders and relevant government departments and have reflected the manpower situation of the industry, there is no need for the Government to conduct a separate forecast on the shortage of skilled construction workers at this stage.

(b) The Chief Executive stated in his Policy Address that we needed to further enhance the prevailing Supplementary Labour Scheme having regard to the unique characteristics of the construction industry. We will continue to uphold the overriding premises of giving priority to the employment of local workers and safeguarding their wage level. To this end, contractors are required to conduct 4-week local recruitment and accord priority to hiring local skilled workers in filling up the vacancies.

     There are some unique operational characteristics of the construction industry not encountered by other industries.  For instance, there are fine divisions in construction activities that involve various trades with diverse skills.  The works processes are carried out in sequential order.  For certain works processes that take less time to complete, skilled workers may not be able to find the relevant skill work at the same works site every day. Besides, the works may be affected by factors such as weather conditions, supply of materials and manpower, progress of upstream work processes and so on. We are considering allowing imported skilled workers to work across more than one public sector works projects under same contractors to enhance the flexibility of deployment and maximise their productivity.

     In the next few months, we will closely liaise with the labour sector and the construction industry to work out the detailed arrangements with a view to launching the further enhancement measures as early as possible within the second quarter this year.

     The relevant government departments will strictly enforce the law in light of the introduction of these measures to safeguard the rights of local workers and ensure that the above mechanism will not be abused. For instance, contractors are required by the Construction Workers Registration Ordinance to regularly submit workers' daily attendance record.  Upon request by the Government, such information has to be provided for supervision and law enforcement purposes.  Labour Relations Officers of the relevant public works projects will also check the daily attendance record of imported skilled workers for the works projects and ensure that the contractors pay the wages as stipulated in their employment contracts to the workers.

     On the other hand, the Labour Department will set up a dedicated Construction Industry Recruitment Centre to provide career counselling services, conduct on-the-spot job interviews and organise job fairs for local construction workers.

     We will review the effectiveness of these enhancement measures in a timely manner following their implementation.  If they still cannot effectively resolve the acute shortage problem of skilled workers, the Government will explore with the construction industry and labour sector the introduction of other more effective and appropriate measures to alleviate the adverse impacts on Hong Kong's economic and social development. At present, the Government remains open to all possible options.

(c) The overall construction expenditure of Hong Kong in 2013-14 was around $180 billion and is forecast to remain at the level between $170 and 240 billion per year in the coming ten years.

     If the shortage of skilled workers cannot be properly resolved, it will seriously affect the delivery of public housing, hospital, school and public transportation projects and lead to escalation of construction costs indirectly.  It is forecast that the price of public sector works will be adjusted upwards annually in the coming few years. Thus, further delay in project implementation will lead to escalation of the construction costs for the projects.

     Deferring the delivery of works projects will also entail serious losses to the society and the economy. Hong Kong's economy only grew at an average annual rate of 2.7% from 2009 to 2013. The growth rate for last year is forecast to be only 2.2%. Given the sluggish external demand, the domestic demand has become an important driver for Hong Kong's economy. The Government has taken proactive measures after the financial tsunami to maintain the stability of our domestic economy. The construction industry has played an important role to boost the domestic demand and create job opportunities, contributing to the close to full-employment situation in the labour market over the past few years. At present, the construction industry is facing an acute manpower shortage. Failure to alleviate the shortage of skilled construction workers in a timely manner will lead to project delays and deferrals to the commencement of worthwhile construction projects. In turn, this will lead to a more acute construction peak several years later which may result in more severe labour shortage and delay the realisation of the economic and social benefits of these projects. If such a situation persists, it will undermine the long-term competitiveness and sustainable development of various sectors of Hong Kong. It is imperative that we implement the aforementioned proposed enhancement measures to resolve the shortage problem of skilled workers.

Ends/Wednesday, January 28, 2015
Issued at HKT 12:56


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