Speech by SDEV at 39th International Federation of Asian and Western Pacific Contractors' Associations Convention (English only)

Following is the speech delivered by the Secretary for Development, Mrs Carrie Lam, today (November 16) at the opening ceremony of the 39th International Federation of Asian and Western Pacific Contractors' Associations Convention:

Conrad, Allan, distinguished guests, ladies and gentlemen,

Good morning.  It is my great pleasure to greet you at the 39th Convention of the International Federation of Asian and Western Pacific Contractors' Associations (IFAWPCA).  I wish to extend my warmest welcome to the distinguished delegates from 15 countries joining this Convention.  

Hong Kong last hosted an IFAWPCA Convention in 1989.  We have gone through significant changes in the last two decades.  Back in 1989, our airport was located in the densely built-up urban area of Kai Tak.  Now, we have our new airport at Chek Lap Kok, which runs the busiest international cargo facility and is the third busiest international passenger airport in the world.  The building of the new airport and the port plus related facilities in the ten years from 1989 is often remarked as a golden era in Hong Kong's infrastructure development.

What a great coincidence that we have brought back the IFAWPCA Convention to Hong Kong when our infrastructure programme is heading for another golden era.  This time, it is going to be bigger, more diversified and inevitably more complex.  Hong Kong is now a Special Administrative Region of China, enjoying a high degree of autonomy under "One Country Two Systems", yet capitalising on our closer economic relationship with the Mainland of China.  Among the ten major infrastructure projects that the Chief Executive of the Hong Kong Special Administrative Region announced in his Policy Address in 2007, four aim to promote integration between Hong Kong and the Mainland of China. These include the Guangzhou-Shenzhen-Hong Kong Express Rail Link and the Hong Kong-Zhuhai-Macao Bridge, which have commenced construction.  Active planning work is underway for the other two - the Hong Kong-Shenzhen Joint Development of the Lok Ma Chau Loop and the Hong Kong-Shenzhen Western Express Link between the airports of Hong Kong and Shenzhen.  A fifth major project with this economic integration in mind is a new land crossing at the eastern part of Hong Kong and Shenzhen.

Meanwhile, we have made good progress in implementing other major projects that aim to enhance Hong Kong's local transport network and develop new areas to meet the needs of our population growth.  We have also forged ahead with other works projects to improve our urban environment and create jobs.  The annual expenditure on capital works projects is set to exceed HK$60 billion for each of the next few years.  All these infrastructure developments will consolidate Hong Kong's status as a global city and lay a solid foundation for our sustained development in the future.

To deliver all these infrastructure projects on time and within budget, collaboration of every party in the construction industry is crucial.  I therefore consider the theme of this Convention - "Built on Collaboration and Fair Contract Terms" - most timely.  As rightly pointed out by Allan in his Welcome Address, only fairness in the allocation of risks between the contracting parties would promote the collaboration of every party, thus leading to successful completion and delivery of projects.    

Despite all good intents and purposes, disputes do occur from time to time in business relationships.  The construction industry is no exception.  We consider that the best way to handle disputes is to prevent them from occurring in the first place.  I trust that the application of a partnering approach can help create an environment for all participants in the projects to work together as a team rather than in a contentious manner.  While non-contractual partnering has been introduced in our public works contracts since 1997, we are now also trying out contractual partnering using the New Engineering Contract form.

In addition, we strive to put in place a good dispute resolution mechanism to resolve disputes amicably with minimal cost and within the shortest possible time.  Since 1991, we have introduced the concept of employing Dispute Resolution Advisers (DRA) in our public works contracts.  The Government has also pursued other alternative dispute resolution methods in our public works contracts, including the introduction of voluntary adjudication in selected public works contracts since 2005.  We are prepared to learn from your experience, and exchange views on this important subject.

Since this is a unique gathering of contractors from the Asian and Western Pacific region, I want to share with you all the latest initiative of the HKSAR Government overseen by my Bureau, that is, to develop another central business district in Hong Kong by Energising Kowloon East.  In recent years, we have witnessed a strong and increasing presence of regional headquarters and regional offices for multi-national companies in Hong Kong and this trend is set to continue.  The number of regional headquarters set up by overseas companies in Hong Kong increased from 855 in 2000 to 1,340 in 2011, representing a 57 per cent increase.  To capitalise on the fast-growing opportunities of the Mainland and sustain Hong Kong's position as a leading financial and business centre, a steady and adequate supply of quality offices is important.  We acknowledge that Hong Kong's traditional core business districts can no longer satisfy this growing demand for office space.

Kowloon East is right across the Victoria Harbour from the venue of this Convention, and includes the new Kai Tak Development, the former industrial areas at Kwun Tong and Kowloon Bay on the eastern part of Kowloon.  It covers an area of close to 500 hectares.  The area was once an important industrial base in the heyday of Hong Kong's manufacturing industry, creating hundreds of thousands of jobs and propelling Hong Kong's prosperity.  However, the massive relocation of our manufacturing base to the Mainland in the 1980's and the relocation of the airport to Chek Lap Kok in the 1990's have left a huge stock of industrial buildings not being fully utilised.  Some private developers, with good market sense, have already taken first-mover initiatives to develop high grade office buildings and retail centres in Kwun Tong and Kowloon Bay.  Up to now, about 1.4 million square metres of office space has been completed.

It is against this backdrop that we believe the Government should inject energy into this transformation by adopting a visionary, co-ordinated and integrated approach.  Kowloon East is destined to become an attractive central business district, characterised by improved connectivity, successful branding, diversity and quality urban design upon full implementation.  Kowloon East is capable of providing 5.4 million square metres of Grade A office space, which is almost twice that in Central.

I am sure that through these few days of meetings, networking and visits, you will get to know more about some of the projects and plans that I have just mentioned, and appreciate the many business opportunities here.  I welcome you to partner with us in this New Era of infrastructure development.  Meanwhile, I wish you all a most pleasant stay in Hong Kong.

Thank you.

Ends/Wednesday, November 16, 2011
Issued at HKT 12:35