Public consultation on proposed security of payment legislation launched today

To improve payment arrangements in the construction industry, the Government today (June 1) proposed to introduce an ordinance on security of payment for the industry and has launched a three-month public consultation. Members of the public are invited to express their views.

The Government and the Construction Industry Council conducted a survey in 2011 on payment practices in the construction industry. The result revealed that contractors, sub-contractors, consultants and material suppliers were subject to payment disputes from time to time causing serious concerns. The Government and industry stakeholders thereafter set up a working group which, after thorough studies and reference to overseas practices, recommended legislation on security of payment in the industry.

"To promote fair payment in the industry, the proposed security of payment legislation will seek to ensure that service providers can receive timely payment when their work is completed. The ordinance will also introduce an adjudication system to speed up the settlement of disputes," a spokesman for the Development Bureau said.

The ordinance will cover all construction works for the Government and specified public bodies, as well as new private building works over $5 million (except renovation, maintenance and repair works). The legislative framework of the ordinance is as follows:

* "Pay when paid" and similar clauses will be rendered unenforceable;
* Contracting parties have the right to adjudication in the event of non-payment or in respect of disputes over payment and/or the construction period;
* A contract party that has not been paid approved amounts or amounts decided by the adjudicator has the statutory right to suspend works; and
* Disputes may still be referred to the court or arbitration pursuant to the contract if a contract party is not satisfied with the adjudicator's decision.

The Bureau will hold two public consultation forums. Members of the public and industry representatives are invited to attend:

First forum:
Date:  July 18 (Saturday)
Time:  3-5pm
Venue: G/F, Tai Hang Tung Community Centre,
            17 Tong Yam Street, Tai Hang Tung

Second forum:
Date:  August 1 (Saturday)
Time:  3-5pm
Venue: 3/F, Causeway Bay Community Centre,
            7 Fuk Yum Road, Causeway Bay

The two forums will be conducted in Cantonese. A simultaneous interpretation service will be provided at the first forum. Please call 3509 8377 for registration.

The consultation document is available at the Public Enquiry Service Centres in various District Offices of the Home Affairs Department and the Development Bureau's website ( Members of the public are invited to send in their views through the following channels on or before August 31:

Mail:   Works Polices 1 Section
          Development Bureau
          15/F West Wing, Central Government Offices
          2 Tim Mei Avenue, Tamar
Fax:    3167 2630

Ends/Monday, June 1, 2015
Issued at HKT 11:01