Immediate measures proposed to assist construction industry (with photo)The Secretary for Development, Mrs Carrie Lam, met with five contractors' associations including the Hong Kong Construction Association today (November 25) to exchange views on the situation faced by the construction industry and to discuss measures to alleviate difficulties faced by contractors undertaking public works projects as a result of the recent credit crunch caused by the financial turmoil.
Mrs Lam briefed the associations on the Government's capital works programme and various measures taken to expedite projects and implement more minor works. The associations agreed that additional minor works which could be implemented more quickly, particularly building-related works, would be most timely and effective in providing jobs for workers, including those likely to return from Macao.
The meeting agreed that the following three measures would be taken forward in the coming several months to assist construction contractors, in particular small and medium sized companies, to resolve their cash flow difficulties:
First, interim payments would be instituted in contracts which at the moment do not contain such a provision. This would improve the cash flow of contractors who are currently paid only upon completion of the works. A mechanism will be established to speed up the valuation of variation orders for the purpose of making payments.
Second, the Government will strive to finalise the accounts of works contracts completed over three years by the end of March 2009.
Third, in respect of retention money for works projects (ranging from 0.75% to 5% of the contract value) which is normally retained by Government until the expiry of the entire maintenance period, normally lasting 12 months, arrangements will be made to release part of the retention money when more than half of the works maintenance period has expired, taking into account remaining outstanding and/or defects rectification works to be carried out by the contractor as well as other liabilities. For building works term contracts, the current payment level will be raised from 80% to 90% of the estimated value of the works under any Works Order.
The above measures were warmly welcomed by the associations.
Ends/Tuesday, November 25, 2008
Issued at HKT 18:31