LCQ12: Capital works expenditure
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Question:
It is indicated in the Budget for this financial year that the average annual capital works expenditure will grow from about $90 billion to about $120 billion over the next five years. Some members of the land development and construction industries hope that the expenditure will not be biased in favour of infrastructure and civil engineering works at the expense of building works and consultancy projects, such as those relating to planning, design, transport and the environment. In this connection, will the Government inform this Council of:
(1) the estimated capital works expenditure and the actual expenditure for each year from the 2020-2021 financial year to the 2024-2025 financial year, with a breakdown by project type (i.e. (i) infrastructure/civil engineering works, (ii) building works, and (iii) consultancy projects);
(2) the estimated capital works expenditure for each year from 2025-2026 financial year to 2029-2030 financial year, with a breakdown by the project types mentioned in (1); and
(3) the measures in place to ensure that the overall capital works expenditure does not unduly favour a certain type of work or project, in order to promote more balanced and comprehensive land development and construction in Hong Kong?
Reply:
President,
The Government has been implementing public works projects in a timely and orderly manner with a view to improving people's quality of living, enhancing the long-term competitiveness and promoting the economic development of Hong Kong. The Government's Budget for this financial year pointed out that, with projects related to the Northern Metropolis being rolled out progressively, as well as other infrastructure projects related to the economy and people's livelihood, the capital works expenditure will start reaching its peak. In the medium forecast range (in future five years), the capital works expenditure is expected to increase from the estimated $90 billion per annum on average last year to about $120 billion per annum on average in future.
My responses to the Member's question are as follows:
(1) From the financial year 2020-2021 to 2024-2025, the annual estimated and actual capital works expenditure by project category are tabulated as follows:
| Financial year | |||||
| 2020-21 | 2021-22 | 2022-23 | 2023-24 | 2024-25 | |
| Original estimate ($billion) | 74.0 | 77.7 | 84.1 | 87.2 | 90.2 |
| Building projects | 36.5 | 39.4 | 41.1 | 44.2 | 46.7 |
| Infrastructure/civil projects | 37.5 | 38.3 | 43.0 | 43.0 | 43.5 |
| Consultancy fees/remuneration of resident site staff in the above original estimate (Note 2) | About 2.0/ About 4.2 | About 2.1/ About 4.4 | About 2.3/ About 4.8 | About 2.4/ About 5.0 | About 2.4/ About 5.1 |
| Actual expenditure ($billion) |
70.0 | 77.1 | 87.6 | 85.8 | 105.3 (Note 1) |
| Building projects | 28.8 | 33.7 | 35.4 | 39.3 | 52.0 (Note 1) |
| Infrastructure/civil projects | 41.2 | 43.4 | 52.2 | 46.5 | 53.3 (Note 1) |
| Consultancy fees/remuneration of resident site staff in the above actual expenditure | About 2.0/ About 3.7 | About 2.2/ About 4.2 | About 2.4/ About 5.0 | About 2.3/ About 5.5 | About 2.4/ About 6.3 |
Note 1: Subject to annual audit by the Audit Commission.
Note 2: We do not have the estimate on the annual consultancy fees and remuneration of resident site staff. Based on past data, they generally account for about 2.7 per cent and 5.7 per cent of the total annual project expenditure respectively.
(2) Based on the medium range forecast, the estimated capital works expenditure is about $120 billion per annum on average from the financial year 2025-2026 to 2029-2030. In the financial year 2025-26, the estimated capital works expenditure is $119.8 billion, of which the estimate on building projects and infrastructure/civil projects are about $61.9 billion and $57.9 billion respectively. The above estimates include consultancy fees accounting for about 2.7 per cent (about $3.2 billion) and remuneration of resident site staff accounting for about 5.7 per cent (about $6.8 billion). The annual estimates will be subsequently planned in the annual Budget taking into account factors including Hong Kong's overall economic conditions, Government's fiscal position, prioritisation of proposed capital works projects, progress of existing projects and overall resource allocation, etc. Hence, we are currently unable to specify the estimated expenditure for various project categories beyond the financial year 2025-26.
(3) Based on the data in item (1) above, the proportion of actual expenditure on building projects to total actual expenditure on capital works projects has increased in recent years. The Government will continue to review the cost-effectiveness of projects, prioritise them according to urgency, and implement the relevant projects in a timely and orderly manner. The projects currently being implemented or planned by the Government cover a wide range of categories, including land planning and development, transport infrastructure, healthcare, cultural and recreational facilities, social welfare, education, drainage, sewerage, water supply, waste disposal, and heritage conservation, etc.
Ends/Wednesday, July 9, 2025
Issued at HKT 16:35
Issued at HKT 16:35
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