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LCQ3: Building Maintenance Guidebook

Following is a question by the Hon James To Kun-sun and a written reply by the Secretary for Development, Mr Paul Chan, in the Legislative Council today (April 9):

Question:

A group of property owners staged a procession last month requesting the Government to seriously address the problem that some lawbreakers secured contracts for major maintenance projects of some buildings by means of bid-rigging, bribing, etc.  On the other hand, most minority property owners have no knowledge of whether the project fees are reasonable.  In this connection, will the Government inform this Council:

(1) as the Appendix to the Building Maintenance Guidebook (the Guidebook) prepared by the Buildings Department lists the reference costs for 29 types of general maintenance works (which involve re-roofing; refurbishment of external walls, internal walls, internal floors and internal ceilings; spalling repair; plumbing and drainage; electrical works; maintenance of doors and windows, etc.), but such costs were prepared on the basis of information as at 2001, whether the authorities have the latest reference costs; if they do, of the details, with a breakdown in tables of the same format as that of the Appendix to the Guidebook; if not, the reasons for that;

(2) as the Appendix to the Guidebook also contains case analyses which provide reference fee scale for the services provided by building professionals in the market in carrying out building inspections, assessment and supervision of maintenance works, of the time of the information on which the fees were based, and whether the authorities have the latest reference costs; if they do, of the details with examples (such as the reference costs for general consultation and construction fees for carrying out a project involving basic refurbishment of external walls, waterproof roofing and replacement of drain pipes of a single-block residential building with some 20 storeys and 150 flats, as well as the difference between the cost reference for refurbishing external walls with paint and that with mosaic); if not, the reasons for that;

(3) for buildings which are not targets of "Operation Building Bright" but the maintenance works of which will be carried out, of the measures put in place by the authorities to assist owners of such buildings in assessing whether the service fees and project costs quoted by the building professionals and contractors to be engaged are reasonable, and in preventing lawbreakers from securing contracts for major maintenance projects of their buildings by means of bid-rigging and bribing;

(4) as the authorities will introduce the "AP Easy" Building Maintenance Advisory Service Scheme this month, whether the Scheme will provide owners with reference costs or reasonable fee ranges concerning the proposed building maintenance works; and

(5) whether the authorities will consider amending the Building Management Ordinance (Cap. 344) and related ordinances to enhance regulation of owners' corporations and companies bidding for building maintenance works so as to curb bid-rigging; if they will, of the anticipated time for conducting public consultation and introducing the legislative proposal to this Council?

Reply:

President,
  
Property owners have a responsibility for maintaining their buildings.  The Government and its partner organisations, including the Hong Kong Housing Society (HKHS) and the Urban Renewal Authority (URA), have been providing various financial and technical assistance schemes to offer assistance to owners in need for maintaining and repairing their properties.  The Home Affairs Department (HAD) also offers assistance from the building management perspective to owners' corporations (OCs) intending to carry out building maintenance works.  Moreover, the Independent Commission Against Corruption (ICAC) and the Hong Kong Police Force (HKPF) work together and adopt a multi-pronged approach, including launching publicity and education programmes, strengthening support for owners and OCs, and carrying out investigation and enforcement actions, to prevent unlawful activities arising from maintenance works.
  
Having consulted HAD, ICAC and HKPF, my reply to the five-part question is as follows:
  
(1) and (2) In 2001, the Buildings Department (BD) compiled a Building Maintenance Guidebook  which served as a general reference for owners on how to resolve maintenance problems.  The Appendices to the Building Maintenance Guidebook, namely "Cost Reference for General Maintenance Works" and "Sample Cases", were compiled according to the information provided at the time by building professionals and management experts.  Since then, BD has not compiled similar maintenance guidebook.

Being the enforcement agency, BD will only arrange government contractors to carry out necessary repair works in a small number of non-compliance cases under the principle of ensuring building safety and removing obvious danger.  Therefore, the data on maintenance costs so collected are very limited.  As the data on maintenance costs only cover the most basic requirements of the repair orders, they are very different from those buildings maintenance works in larger scale.  As the costs of building maintenance works are subject to many factors, such as the scale of works, work items and choice of material, it is difficult for BD to provide the fees of building maintenance for public reference.  For this reason, we do not intend to provide such information in future.  Nevertheless, relevant professional bodies such as the Hong Kong Institute of Surveyors (HKIS) have analysed the data it collected and published fee levels on professional consultancy service for building inspection and building maintenance works, which can serve as reference for owners in need.

(3) Apart from the Operation Building Bright, building owners in need can obtain assistance through various funding schemes, including the Integrated Building Maintenance Assistance Scheme (IBMAS), the Building Maintenance Grant Scheme for Elderly Owners, the Comprehensive Building Safety Improvement Loan Scheme and the Mandatory Building Inspection Subsidy Scheme, in order to maintain and repair their properties.  HKHS and URA have also set up a dedicated hotline and will soon launch a one-stop website to facilitate the public in making enquiry about the information on the funding schemes and maintenance works.

HKHS and URA provide technical support to help owners carry out maintenance works through the above funding schemes.  Regarding individual scheme like IBMAS, the two implementation agencies will not only formulate and issue guidelines on maintenance works, but also engage independent professional consultants to assess the maintenance costs for the buildings under application and give advice to applicants to help them understand if the costs are in line with the market level and make the appropriate decisions.  Besides, the two agencies also arrange briefings or attend OCs' meetings to provide technical support on building maintenance works and tender procedures to facilitate the proper conduct of tender procedures.

On the publicity and education front, ICAC and HKPF, in collaboration with HAD, URA and HKHS, etc, have been providing OCs and owners with information on corruption and crime prevention as well as guidelines on the tendering of building maintenance works.  Pursuant to the Building Management Ordinance (Cap 344) (BMO), HAD has issued the Code of Practice on Procurement of Supplies, Goods and Services and the Code of Practice on Building Management and Maintenance so that OCs can follow the rules and principles therein in the course of planning and tendering.  Moreover, ICAC also published the new edition of the Building Maintenance Toolkit in mid-December last year, offering more effective anti-corruption advice on building maintenance as well as providing checklists and templates for OCs' and owners' reference.  At district level, District Offices and ICAC frequently organise education and publicity activities to promote integrity building management in 18 districts.  ICAC also visits OCs to elucidate anti-corruption laws and point out the areas that are prone to corruption and bribery.  Through the RenoSafe Scheme, HKPF provides OCs intending to carry out building maintenance works with booklets, listing out possible crimes arising from improper handling of building maintenance works and offering advice on crime prevention.  For buildings that have participated in the Scheme, posters or banners will be displayed at conspicuous positions of the building to strengthen publicity and deterrent effect.

On the law enforcement front, ICAC and HKPF have been actively following up on and investigating all complaints and reported cases.  Recently, HKPF has set up a special working group under its Organised Crime and Triad Bureau.  Through the newly launched Renosafe Scheme, the respective District Anti-Triad Squad will maintain direct contact with OCs and owners concerned, and invite them to report to the police information of crime relating to building maintenance works with a view to stepping up its intelligence gathering efforts.

(4) HAD, in collaboration with the HKIS, the Hong Kong Institution of Engineers and the Hong Kong Institute of Architects have launched an "AP Easy" Building Maintenance Advisory Service Scheme ("AP Easy" Scheme) on a pilot basis for one year.  Under the AP Easy Scheme, expert teams comprising building maintenance professionals (including surveyors, engineers and architects) will provide in-depth, comprehensive and tailor-made professional advice to OCs intending to carry out building maintenance works but without professional support of building management company.  The expert teams will, having regard to the actual circumstances and needs of individual buildings, render professional advice to OCs on engaging consultants/authorised persons, in particular, on matters like drafting tender documents/contracts and analysing the tenders, etc., to help OCs select suitable consultants/authorised persons for conducting the maintenance works.

The hiring of consultants/authorised persons is the first phase for carrying out building maintenance works.  As the scheme does not cover the tendering for the specific maintenance works in the second phase, no information on the relevant maintenance fees can be obtained through this pilot scheme for owners' reference.

(5) BMO provides a legal framework to facilitate formation of OCs by owners and the carrying out of proper building management work in accordance with the requirements of BMO.

Regarding the requirements on meetings and resolutions of OCs, it is stipulated in Section 5(1) of Schedule 3 to BMO that the quorum at a meeting of the corporation shall be 10% of the owners.  According to Section 3(3) of Schedule 3 to BMO, all matters arising at a meeting of the corporation shall be decided by a majority of the votes of the owners voting either personally or by proxy.  Furthermore, it is required under Section 20A of BMO that any supplies, goods or services the value of which exceeds or is likely to exceed the sum of $200,000 or a sum which is equivalent to 20% of the annual budget of the corporation, whichever is the lesser, shall be procured by invitation to tender.

The quorum at a meeting of the corporation and the percentage of votes of owners required for passing resolutions are one of the issues examined by the Review Committee on the Building Management Ordinance (Review Committee).  HAD is considering and following up the Review Committee's recommendations, with a view to consulting stakeholders and the public on the amendment proposals for BMO later this year.


Ends/Wednesday, April 9, 2014
Issued at HKT 16:40

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