Following is a question by the Dr Hon David Chu and an oral reply by the Secretary for the Environment, Transport and Works, Dr Sarah Liao, in the Legislative Council meeting today (May 7) :-

Question:

 

Regarding the project consultancy agreements worth $1.3 million or above and construction contracts worth $50 million or above awarded by the Government over the past three years, will the Government inform this Council, in respect of each agreement or contract, of the projects involved, the sum as well as the name of the consultancy firm and contractor awarded such agreement or contract?

Reply:

Madam President,

 

Regarding each project consultancy agreement worth $1.3 million or above and construction contract worth $50 million or above awarded by the Government over the past three years, the project title, the approved sum and the name of the consultancy firm and contractor awarded the agreement or contract are listed in Annexes A and B.

 

Since over 500 projects are listed in the Annexes, translating the project titles and company names would require a large amount of resources. To save such resources, we have, after obtaining the consent of Dr Hon David Chu, provided only the English versions of the Annexes for reference.

 

Government procurement is always guided by the principles of open and fair competition, transparency, public accountability and value for money.

 

The selection of consultants is based on the combined scores of the tenderers in respect of the quality of their technical proposals, their past performance and the prices quoted. Regarding tenders for construction contracts, an overall assessment is made, using a 60:40 weighting on tender prices and technical evaluation/performance index ratings respectively. For large or complicated works contracts, a marking scheme is used to calculate the technical evaluation scores. For other contracts, a formula is used to calculate the combined price and performance scores. As a result, construction companies with good performance records will stand a better chance of winning a contract. These measures can encourage consultants and contractors to continuously drive for excellence, instead of merely aiming at the lowest acceptable standards. In the long run, these measures can enhance the overall quality of the construction industry and achieve greater value for money in the use of public funds.

 

As far as public works are concerned, the procurement of services for construction and engineering works, like other kinds of government procurement, is subject to the Agreement on Government Procurement (GPA) of the World Trade Organization (WTO). As said above, the Government subscribes to the fundamental principle that procurement should be transparent and conducted on a fair and level playing field that does not give an unfair advantage to any supplier. We think there is already adequate competition among contractors bidding for public works projects. On our Approved Lists of Contractors, there are more than 900 contractors qualified to submit public works tenders. Some 300 of them are main contractors while the others are specialist contractors. Our invitations to tender have all along been well received.

 

The same principle of fair competition is adopted for the procurement of consultancy service, although it is not subject to the WTO's multilateral GPA. There is no barrier to entry, and consultancy assignments are awarded on the basis of combined technical and fee evaluation. No consultant is given preference or favourable treatment. The system is fair and open, and has cultivated a very effective competitive environment in the industry.

 

In conclusion, given the open, fair and transparent procurement system and competition policy as described above, as well as the measures taken to encourage the participation of smaller companies, the consultancy agreements and construction contracts for public works in Hong Kong are in no way monopolised by any company.

Annex A
Annex B

End/Wednesday, May 7, 2003
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