The spending of the Capital Works Programme in 2014-15 is maintaining at the level of around $70 billion which is also similar to the actual expenditure of $70 billion (excluding the one-off grant to the Hospital Authority for minor works projects in $13.0 billion) in 2013-14. We will continue to invest in infrastructure development to promote economic growth, create employment opportunities and enhance the long-term competitiveness of Hong Kong.
We continue to implement infrastructure projects to meet the diverse needs of the community. Of the about $370 billion approved by the Legislative Council (LegCo) Finance Committee over the last five years, about 70% is devoted to the Ten Major Infrastructure Projects and the remaining 30% to other projects of varying scales. We expect that based on the planned infrastructure programme, the annual capital works expenditure in the next few years will be at the $70 billion level.
Procurement System for Public Works Projects
While the infrastructure development programme brings to Hong Kong substantial economic and social benefits, we are always mindful of the need to achieve the best economical delivery of quality infrastructures. We continue to look for opportunities and review our procedures so as to attract more contractors and consultants from outside Hong Kong into the local public works construction market thereby bringing new expertise to Hong Kong and ensuring market competition. We will continue the method of cost estimation using the approach of risk analysis for our public works projects but will explore further enhancement taking into account the recommendations of our study consultant.
Security of Payment Legislation
To enhance the business operating environment of the construction industry, with the support of industry stakeholders, we have devised a framework for introducing a new legislation to enhance the security of payment in construction-related contracts and with adjudication for speedy resolution of contract disputes, thereby enhancing the cash flow of the supply chain in the construction industry. We plan to conduct public consultation on the legislative proposal in 2015.
Supporting Construction and Related Engineering Professionals to Conduct Business in the Mainland
Since signing of the “Mainland and Hong Kong Closer Economic Partnership Arrangement” (CEPA) in 2003, 46 market liberalisation measures have been secured to facilitate stakeholders of the Hong Kong construction industry to practise and develop their business in the Mainland, particularly in Guangdong Province under the pilot scheme arrangement. Through mutual recognition between Hong Kong and the Mainland, as at 1 December 2014, 1 490 Hong Kong construction and related engineering professionals have already obtained the relevant Mainland professional qualifications. Amongst them, 559 professionals of the three disciplines, namely architect, structural engineer and building surveyor, may now use their status of registered practitioner in Guangdong as an enterprise qualification to set up companies to conduct business under the Guangdong pilot scheme. Through the Agreement between the Mainland and Hong Kong on Achieving Basic Liberalisation of Trade in Services in Guangdong (the Agreement) under the framework of CEPA signed on 18 December 2014, the Mainland has opened up 14 sub-sectors of construction and related engineering services in Guangdong to participation by Hong Kong enterprises and professionals by way of a negative list, i.e. the offering of national treatment unless otherwise specified in the Agreement.
We will continue to pursue more liberalisation measures for the construction and related engineering services, such as, mutual recognition of professional qualifications for more professional disciplines, including electrical engineer and building services engineer. We will also seek to expand the Guangdong pilot scheme so that more Hong Kong professionals, who have acquired the respective Mainland professional qualifications, may register as practitioners and be recognised for the purpose of fulfilling enterprise qualifications. Efforts are also being made to expand the pilot scheme to other parts of the Mainland.
Following the Cooperation Agreement with the Authority of Qianhai Shenzhen -- Hong Kong Modern Service Industry Cooperation Zone of Shenzhen (Qianhai Authority) signed in 2013, we have drawn up a detailed framework for Hong Kong professionals and enterprises in the construction and engineering sectors to participate in Qianhai development and provide a full range of services throughout the project delivery cycle, including engineering design, project management and works supervision services. The Qianhai Authority is identifying pilot construction projects for implementation of the framework.
To facilitate and allow the engagement of Hong Kong consultants to undertake supervision work for the Mainland’s foreign aid construction projects in foreign countries, we signed a Memorandum of Cooperation with the Ministry of Commerce on 24 April 2014. Two medium-sized building projects in Nepal and Cambodia have been selected for implementation which brings a new business opportunity to our construction industry.