Following is a question by the Hon James To and a written reply by the Secretary for Development, Mr Paul Chan, in the Legislative Council today (March 25):
Recently, quite a number of major infrastructure projects, such as the Hong Kong-Zhuhai-Macao Bridge related local projects and Liantang/Heung Yuen Wai Boundary Control Point and associated works, have experienced delays and cost overruns. The authorities have pointed out that some of the main causes for cost overruns are surges in the wage levels of construction workers as well as the prices of construction materials and machinery, etc. Some members of the construction industry have pointed out that the cause for the soaring wages of the workers is related to the concurrent implementation of a number of infrastructure projects, resulting in competition for construction workers. In this connection, will the Government inform this Council:
(1) whether it has assessed the respective current total shortfalls of technical workers and unskilled workers for the various major infrastructure projects;
(2) whether it has any new plan to attract young people and employees from other industries to join the construction industry; if it does, of the details;
(3) whether it knows the number of graduated trainees of the training courses provided by the Construction Industry Council (training courses) in each of the past three years, together with a breakdown by course type;
(4) whether it has compiled statistics on the employment rate of the trainees of the training courses upon graduation and the percentage of the graduated trainees who did not join the construction industry in the total number of graduated trainees, in the past three years;
(5) whether it has conducted surveys to find out, among the trainees who graduated in the past three years from the training courses and joined the construction industry, the percentage of those taking up jobs in other industries within two years from graduation; and
(6) whether the authorities will, when drawing up plans for major infrastructure projects in future, plan for the implementation of such projects by phases on the premise of not importing foreign labour, so as to avoid labour shortages and project delays arising from competition among projects for construction workers?
The Government has all along managed public works expenditure prudently. Our records show that for projects approved by the Finance Committee of the Legislative Council (LegCo) over the past ten years from 2004-05 to 2013-14, except for individual projects that required increase in the Approved Project Estimate (APE) owing to actual circumstances, we managed to complete the projects under the Capital Works Programme within the original APE overall. Generally speaking, the major reasons for increasing the APE include the follows:
(i) increased project contingencies (and associated provision for price adjustments) to account for unforeseeable circumstances as from the date the project obtained funding approval to tendering stage as well as during construction stage of the project. For example, they include higher-than-expected tender return prices, worse-than-expected ground conditions and additional costs for extra works to meet loca1 concerns; and
(ii) increased provision for price adjustments to cover higher-than-expected escalation in labour and material costs.
To cope with the manpower shortage in the construction industry, the Government has been closely collaborating with the Construction Industry Council (CIC) to adopt a multi-pronged approach to attract more entrants, particularly young people, to join the industry. The measures include stepping up training, publicity and promotion as well as enhancing the working environment and construction site safety, etc.
My reply to the six parts of Hon To's question is as follows:
(1) Since 2013, the Government has been working with CIC to assess the overall construction expenditure of both public and private sector works as well as the supply and demand of construction workers over a ten-year horizon. According to the latest report on manpower forecast for construction workers released by CIC in October 2014, there will be a shortage of about 10 000 to 15 000 skilled workers in the construction industry in the coming years. The manpower forecast has taken into account the latest forecast construction expenditure of public and private sectors, the number of in-service workers and their age distribution, training, and other relevant factors. CIC will regularly update the forecasts and release its results.
CIC forecast that there will also be a shortage of unskilled workers in the coming years. However, unskilled workers in general need not undertake particular skill training and will find it easy to join the industry. Its labour supply is also susceptible to the manpower situation and remuneration of other sectors and hence is more volatile. In this connection, it is difficult to make a more accurate forecast on the shortage of unskilled workers.
(2) The Government obtained a total of $320 million from LegCo in 2010 and 2012 to support CIC to strengthen its role in training local construction personnel and enhance promotion and publicity efforts to attract more new entrants to join the construction industry.
The following measures have been implemented to attract young people and job changers to join the construction industry:
(i) The Government collaborates with CIC to launch the Enhanced Construction Manpower Training Scheme (ECMTS) to attract more new entrants, including young people and job changers, to join the trades facing labour shortage through providing enhanced training allowances using the aforementioned approved funding. As at end-2014, there have been more than 6 000 semi-skilled workers trained under the ECMTS and about 60 per cent of them were aged below 35. This reflected that more younger people are interested in joining the construction industry;
(ii) CIC collaborates with contractors in launching various Collaborative Training Schemes, under which the trainees are hired and then trained on-site by contractors so as to acquire site experience at an early stage;
(iii) CIC will continue to provide regular one-year full-time Basic Craft Courses with training allowance for individual trades to attract and train trainees, mainly those completed with junior secondary education, to become semi-skilled construction workers; and
(iv) The Government collaborated with CIC to launch the "Build Up" publicity campaign in 2011 and enhance the working environment and construction site safety to uplift the image of the construction industry.
To increase the supply of skilled workers to meet the needs of the industry, the Government will seek funding of $100 million for CIC to kick-start new training measures to upgrade the skills of semi-skilled workers to the levels of skilled workers in the coming years. Currently, CIC is consulting the industry stakeholders on the detailed arrangements. Subject to funding approval from LegCo, we will take forward this new initiative within 2015.
(3) According to the information provided by CIC, the numbers of trainees that graduated from the above-mentioned courses each year between 2012 and 2014 are set out in Table 1.
(4) According to the information provided by CIC, the percentages of the graduate trainees joining the construction industry between 2012 and 2014 are set out in Table 2.
(5) To keep track of the retention situation of graduates of full-time training courses for construction workers, CIC has been conducting telephone surveys on the employment situation (note: reference is made to the employment surveys released by CIC in January 2015. CIC regularly surveys the retention rates of trainees in the industry for three months, six months and 12 months after their graduation.) of its graduates 12 months after graduation. According to the information provided by CIC, the retention rates of graduates of various training courses for 12 months after graduation in 2012 and 2013 are set out in Table 3.
From 2015 onwards, CIC will extend to keep track the employment situation of graduates for 24 months after graduation. As the survey is still underway, the relevant data is not available for the time being.
(6) Infrastructure development can bring about huge benefits to the economy and society. It will create employment opportunities during construction stage, as well as spur economic activities and improve the living environment of the people after its completion. Over the past few years, the Government has continued to increase its investment in capital works so as to boost the economy, create employment opportunities, enhance Hong Kong's competitiveness in the long term and improve people's livelihood.
The Government has all along been adopting long-term planning for infrastructure development. While maintaining investment in infrastructure projects, the Government will deliver the Capital Works Programme in a prudent and realistic manner, with due consideration for the sustainability of public finances and the overall capability and capacity of the construction industry.
The Government will continue to study and formulate effective measures to further enhance its capacity in supervising works progress. The Government has been vigilant to the market trends of the construction industry and will take forward infrastructure projects in an orderly manner so as to meet the housing and other needs arising from the growing population in the coming ten years and facilitate the development of Hong Kong.
We will continue to work with CIC to help meet the keen manpower demand through local training and re-training as well as attracting new entrants to the construction industry. Nevertheless, Hong Kong is facing ageing population and dwindling labour force, and there are limitations in training local construction workers, the construction industry needs to import skilled workers in a timely and effective manner in order to cope with the acute shortage of skilled workers. With due regard for the unique characteristics of the construction industry and safeguarding the priority to the employment of local workers and their income levels, the Government will further enhance the Supplementary Labour Scheme so as to enhance the flexibility of deployment and the utilisation of productivity of skilled workers.
Ends/Wednesday, March 25, 2015
Issued at HKT 17:34