Following is a question by the Hon Ho Chung-tai and an oral reply by the Secretary for the Environment, Transport and Works, Dr Sarah Liao, in the Legislative Council meeting today (June 23) :-
Question:
Regarding the implementation of complementary proposals on professional development, put forward by the Chief Executive in paragraph 38 of this year's Policy Address, will the Government inform this Council:
(a) whether a work schedule has been worked out for various professional services to establish business platforms in the Mainland; if so, of the details, including the priority of engineers among the many professions;
(b) of the measures in place to ensure that the Government will inject an average of about $29 billion per year for capital works projects for the next five years; and
(c) of the specific measures in place to minimise obstacles for local small and medium-sized professional organisations to participate in various tenders and consultancy contracts for government works?
Reply:
Madam President,
(a) To promote the joint economic prosperity and development of the Mainland and the Hong Kong Special Administrative Region (HKSAR), the Central Government and the HKSAR Government signed the Mainland and Hong Kong Closer Economic Partnership Arrangement (CEPA) on June 29, 2003. The major commitments under CEPA have been implemented since January 1, 2004. Regarding trade in services, the Mainland will liberalise market access for 18 sectors, including construction and related engineering, real estate, accounting, insurance, legal, medical and dental, securities and other professional services. In addition, the two places have also agreed to encourage mutual recognition of professional qualifications under CEPA. In general, the measures in CEPA allow local service providers to provide professional services on the Mainland through reciprocal recognition or the establishment of enterprises.
CEPA adopts a building-block approach, allowing Hong Kong and the Mainland to pursue consultation on the fostering of trade liberalisation in respect of professional services and incorporate the agreed liberalisation measures into CEPA. The HKSAR Government is holding consultations with the Mainland authorities with a view to making progress in different areas as soon as possible. At this stage, the Central Government and the HKSAR Government has not laid down a timetable or prioritised various professions for consultation with the Mainland.
As far as the construction industry is concerned, Hong Kong contractors and consultancy firms have already been permitted to set up wholly-owned operations on the Mainland according to their own timetable since CEPA came into effect. Nevertheless, the HKSAR Government is making great effort in coordinating the implementation of CEPA. We have been maintaining close contact with the stakeholders of the construction industry and seeking their views on the implementation of CEPA and the problems they have encountered. We have held several meetings with the Ministry of Construction to discuss the concerns of the industry in depth. We understand that it is the hope of the industry that the threshold for entering the Mainland market can be lowered for Hong Kong companies. The HKSAR Government will continue to discuss with the Ministry of Construction matters including lowering the entry requirements for contractors and consultants, simplifying the procedure for applying qualification certificate and permit to commence work, the residence requirements on Hong Kong professional and managerial staff and the timing for injection of capital.
On the mutual recognition of professional qualifications in the construction-related sector, the HKSAR Government has been maintaining close contact with the professional bodies in Hong Kong, the Ministry of Construction and related Mainland professional bodies. We have been actively promoting and coordinating the discussions on mutual recognition. To advance the discussions, we have led several times representatives from the relevant professional bodies in Hong Kong to meet officials from the Ministry of Construction and related Mainland professional bodies in Beijing at joint working conferences. Thanks to the efforts of all parties concerned, concrete progress in the mutual recognition of professional qualifications in the construction-related sector has been achieved. For example, the professional bodies of estate surveyors and architects of the two places have signed reciprocal recognition agreements in November 2003 and February 2004 respectively. The first round of training and tests were held in March and May 2004 respectively under the agreements.
We have also made good progress in the mutual recognition of qualifications of engineers. The relevant professional bodies of the two places signed a draft reciprocal recognition agreement for structural engineers in February 2004.
As arranged by us, the Hong Kong Institution of Engineers and the China Association of Engineering Consultants are discussing the qualification requirements of the Mainland construction supervising engineers. In addition, we have also arranged for the preliminary exploration of the mutual recognition of electrical and geotechnical engineers by the two places.
In order to promote and hasten the mutual recognition of qualifications of the construction-related professions, we, together with the representatives from the relevant professional bodies in Hong Kong, plan to hold another working conference with officials from the Ministry of Construction and related Mainland professional bodies in Beijing late this month. We hope that a formal reciprocal recognition agreement for structural engineers can be signed at an early date and consultations on other professional qualifications can continue.
(b) Regarding capital works projects, the Government will take into account its policy objectives, the established procedures, the development needs and the aspirations of the public in preparing a priority list of essential infrastructure projects. Proposals submitted by different departments are considered at the annual high-level resource allocation meetings in the light of available resources. New projects that need to be undertaken and should commence within five years will be included in the Capital Works Programme.
According to the 2004-05 Estimates, there was an outstanding commitment of about $115.8 billion in respect of Category A projects as at March 31, 2004. During the 2004-05 financial year, works will start on new projects currently in Category B in the Public Works Programme with an estimated total value of about $24.3 billion. The total value of these projects amounts to $140.1 billion, most of which will be paid within five years. Including the estimated expenditure of the minor works and other items under planning and design which will commence within five years, the Government will reserve about $29 billion per year for capital works projects for the next five years.
(c) Under the List of Approved Contractors for Public Works, contractors are divided into three groups according to their financial and technical capabilities. Contractors in each group (i.e. Group A, B or C) may tender for works contracts of different value. Group A contractors may bid for contracts up to $20 million; Group B contractors may bid for contracts up to $50 million; and Group C contractors may bid for contracts of any value exceeding $50 million. This system can ensure that small and medium-sized companies have the opportunity to tender for contracts in keeping with their capability.
To further encourage small and medium-sized contractors to bid for large projects, the Government allows them to form joint venture company and submit a single tender on condition that the contractors can jointly satisfy the requirements listed on the tender documents and each of the contractors has the technical knowhow to carry out the part of the works for which it is responsible.
The Government may also split a single contract into smaller ones as far as possible so as to encourage the participation of small and medium-sized contractors. In determining whether a contract should be split into smaller ones, various factors are considered, including feasibility, interface problems, access problems, land availability, various impacts (environmental, drainage etc.), availability of works areas, quality of works and economic benefits.
Regarding consultancy services, our procurement guidelines specify that only small consultancy firms with up to 10 professional staff are allowed to bid for small and simple consultancies with estimated consultancy fees not exceeding $4 million, except for specialised projects. Architectural consultants are also divided into two groups according to their experience and staff size. Companies in each group may only bid for certain contracts. These measures can ensure an even distribution of work among consultancy firms of different scale.
Ends/Wednesday, June 23, 2004
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