Speech by SDEV at inauguration ceremony of 67th Council of Hong Kong Construction Association (English only)

Following is the speech by the Secretary for Development, Mr Paul Chan, at the Inauguration Ceremony and Annual Dinner of the 67th Council (2013-15) of the Hong Kong Construction Association (HKCA) today (April 9):

Thomas (President of the HKCA, Ir Thomas Ho), distinguished guests, ladies and gentlemen,

Good evening.

I must first thank the Association for inviting me here today. I am most delighted to officiate at the inauguration of the 67th Council of the Association.

Golden era and beyond

Our construction industry has surely entered a golden era. After the financial tsunami hit us, we navigated through turbulence and came out more resilient. The annual expenditure on capital works has skyrocketed to an estimated $70 billion in 2013-14. You may be wondering whether this level of massive investment will last. I can assure you that it is our conviction that infrastructure fosters economic development and enhances our quality of life. We anticipate that capital works expenditure will stay well over $70 billion for each of the next few years.

However, this represents only half of the equation. Some two weeks ago, the Construction Industry Council (CIC) released for the first time the 10-year projection of construction expenditure. Both the public and private sectors are covered. I understand that the CIC will continue to regularly update this projection on a rolling basis. The increased transparency and better information sharing will surely facilitate forward planning on your part.

Clearly, there are plenty of business opportunities ahead. I am proud to say that the industry has been gearing itself up to seize them. However, we need to keep asking: What else can be done? Where do we go from here?

Industry collaboration to resolve manpower issues

I believe that one of the key challenges that lie ahead is manpower. I would like to express my appreciation to the Association, alongside the CIC and other members of the industry, for working together to tackle manpower issues. One example is the collaboration of the Association and subcontractors with the CIC to implement the Contractor Cooperative Training Scheme. Trainees are employed on a "first hire, then train" basis to enable them to acquire extensive on-site experience. This is a visionary step that will create a win-win situation for contractors, workers and clients.

Recently, recognising that new recruits will not be fully productive immediately after graduation, the CIC announced that it will roll out a special on-the-job training subsidy scheme. This subsidy will ease the burden on employers, and is also a result of co-operation between the CIC and industry stakeholders.

My gratitude goes to the Association for its unfailing support for the government-subsidised Enhanced Construction Manpower Training Scheme. I am pleased to note that many contractors are generously offering monthly salaries beyond the committed amounts of $10,000 for fresh graduates and $15,000 for experienced ones. As a result of our concerted effort, more than 2,200 trainees have joined the scheme up to the end of February 2013. Many of them are young new entrants.

Just before Easter, the CIC announced that more than 8,000 training places per year in 2013 and 2014 will be provided. This is a perfect example of synergy. This is the result of co-operation by the industry. At the Development Bureau, we will continue to monitor the manpower situation in the industry closely.

Government's effort to support the industry

Without doubt, the Government is committed to take strides in complementing industry efforts. Since coming into office, I have made it a top priority to encourage reforms in the construction industry, and to cultivate a progressive and caring culture. There are five "P"s on the agenda - the five main areas that we, together with the industry, will focus on in the coming years.

The first "P" is protecting our workers. Enhancing site safety is a realisation of the caring culture of the industry. Our target is zero accidents. I am very pleased to learn that in your vision paper you share the same objective. Our appreciation goes to the Association for supporting our promotional activities. Let me make an appeal to you. To underline the importance we attach to site safety, the Chief Executive himself will officiate at the Zero Accident Declaration Ceremony at Kai Tak, at 8.15am on May 27. I encourage you to organise similar ceremonies at your construction sites at the same time, which will be streamed live at Kai Tak - the first time something like this has ever been done in Hong Kong. We need your participation and support to make it memorable.

The second "P" is productivity. At the business level, I urge our contractors and subcontractors to upgrade the skills of their workers, and help nurture a multi-skilled workforce. Not only will this maximise the versatility and potential of our workers, it will also ensure a steady labour supply. At the industry level, I encourage the stakeholders to champion best practices, mechanisation and innovations. These will enhance productivity.

At times when infrastructure spending is massive, and manpower demand is high, we need to place more emphasis on the first two "P"s, protecting our workers and productivity. These are paramount to the timely building of the housing and infrastructure this city deserves, and to developing an even more competitive construction industry.

In the coming years, we will also focus on payment issues, the third "P". When payments are not forthcoming from upper-tier parties, all lower-tier parties in the supply chain may suffer. We have decided to take a legislative approach to address these issues and improve cash flow in the industry in a holistic manner. A consultation exercise will be conducted from late 2013 to early 2014, and we aim to introduce a bill to the Legislative Council in 2015 to 2016.

Fourthly, perception re-engineering. We launched the Build-Up Publicity Campaign in 2011 to raise the image of the industry. You will probably recall the well-received RTHK documentary "A Dream Comes True", which was aired in early 2012. We will have an encore right after Christmas this year in the form of a drama. Our survey has shown that, as a result of the campaign, more young people are willing to join the industry.

Last but not least, the fifth "P" - partnership. The first four "P"s - protection, productivity, payment and perception - are key strategies to underpin the sustainable development of the industry. But these strategies can only be deployed to maximum effect through forging partnerships. I urge members of the industry to work with each other, especially with the CIC, the industry co-ordinating body and our common platform, to solve the challenges we now face. Together, we can sustain momentum for continuous improvement and spearhead reforms.

Apart from partnering with members of the industry, we will also need to forge partnerships with the public. I have indicated earlier that our annual capital works expenditure will stay over $70 billion in the coming few years. We are taking forward a number of mega-projects, including the seventh land-based boundary control point at Liantang/Heung Yuen Wai, a midfield expansion project at the Hong Kong International Airport and a future third runway, and five railway projects scheduled to come online before 2020. And there are a number of other projects in the pipeline such as reclamation outside Victoria Harbour.

There will inevitably be diverse voices on these projects from the community. These are good signs. They indicate the growing sophistication of our society. We will need suggestions from professionals and the industry to strike the right balance among economic, societal and environmental needs. What we also need to do is to facilitate public participation. It is my sincere wish that you can play the role of a thought leader, and help guide public policy discussions towards a more informed and rational path.

I recall that when the plans to construct the first lines of the MTR and the Hong Kong International Airport were announced, they aroused much controversy. Can you imagine what our lives would be like if these mega-projects were stalled and halted back then?

Before we proceed to the swearing-in ceremony, may I wish the 67th Council of the Association every success, and for every one of you, good health and good fortune. Thank you.

Ends/Tuesday, April 9, 2013
Issued at HKT 21:02