News Stories:

Click-on these handy "jump links" to quickly access the news item
you're looking for.

1. Housing contractor could lose projects

2. Government to study PAC's report on the development of a site in Sai Wan Ho

1. Housing contractor could lose projects
MAY CHAN , SCMP 15 February 2006

The Housing Department plans to terminate building contracts with a company that is still operating on the projects, in what would be an unprecedented move by the body, according to a source.

The department is considering the move to re-tender three construction projects as the contractor, Dickson Construction, has delayed the projects by more than a year after it failed to deploy sufficient workers and materials, the senior department source said.

"The department has never terminated construction projects with any contractor which is still operating," the source said.

The department would meet tomorrow to decide whether to terminate the project contracts and re-tender them in March. This would incur an extra $90 million in material and construction costs in total, while additional administrative costs had yet to be assessed.

All extra costs would be borne by Dickson Construction. Senior Dickson executives could not be reached for comment yesterday.

Dickson Construction won the contracts in 2003 and 2004 and the three projects - redevelopment of Shek Pai Wan Estate phase two and two building projects in Fanling - are together worth $13 billion.

The contractor has only completed less than $500 million of work, according to the source, who said the projects had been delayed for more than a year - completion of the Shek Pai Wan project has been pushed back to March 2007 and the two Fanling projects to March and November 2008.

The Labour Department has received 577 complaints from construction workers who claimed the contractor owed them $12.8 million in wages. More than $4.5 million has been paid to 330 of the complaining staff, while the rest of the cases remain unsettled.

Secretary for Economic Development and Labour Stephen Ip Shu-kwan said the department had helped workers collect $4 million in unpaid wages. "We want to reiterate that contractors as well as subcontractors have the responsibility to pay their workers," he said. "The department will continue assisting workers of Dickson Construction in getting wages."

He vowed the government would prosecute employers if there was evidence they had not paid wages.

The department claims the contractor had failed to pay wages to its construction workers in August last year and that it had substantially lagged behind in those projects because it had failed to buy enough building materials or hire enough labour.

The source said that on December 19 last year, the department informed the contractor that it would terminate the contract on December 31, but later revised the deadline to February.

ickson Construction is a subsidiary of Dickson Group Holdings Ltd, which was delisted from the stock exchange last December.

2. Government to study PAC's report on the development of a site in Sai Wan Ho
Hong Kong Government, 15 February 2006

The Legislative Council (Legco) Public Accounts Committee (PAC) submitted a report with its recommendations on the development of a site at Sai Wan Ho to the Legco today (February 15).  

As regards the concerns raised in the PAC report about the exercise of discretionary powers by the Building Authority (BA), a spokesman of the Housing, Planning and Lands Bureau (HPLB) said such powers are provided under the law.  In order for the BA to make corresponding and appropriate decisions under different circumstances, certain discretionary powers are required to be given to the BA.

"Generally speaking, the BA has to consider all relevant factors to ensure that the decision is reasonable, in compliance with the restrictions of relevant laws, and is in the public interest," the spokesman said.

"While the relevant factors vary in each case, Buildings Department (BD) has put in place internal guidelines setting out the factors which may be considered for general guidance.   Officers of BD are bound by the internal guidelines of its department, as all civil servants must follow the instructions of the departments they belong to."

"The Chief Executive has already appointed an Independent Committee of Inquiry (ICI) to conduct an in-depth examination on whether discretionary powers have been exercised properly by the BA in respect of the development of the site at Sai Wan Ho. The Committee will also advise on how the concerned departments may better perform their functions in this area in future," he said.

Concerning the recommendation that Government should review the criteria for deciding whether or not the maximum gross floor area (GFA) of a site should be specified, with a view to removing any ambiguities about the development potential of the site, the spokesman said the Secretary for Housing, Planning and Lands has proactively suggested such a review during the PAC hearing and that the proposal involves both pros and cons and it would be necessary to strike a balance.   The Government will carefully consider the recommendations of the PAC and the ICI and decide on the way forward.

As regards the PAC's concern on the communication and coordination among Planning Department (PlanD), Lands Department (LandsD) and BD, the spokesman said, "HPLB sets the general policies relating to planning, land and building aspects, while PlanD, LandsD and BD are responsible for their implementation."

"Other than communicating through correspondence, the three departments also make use of the District Lands Conference, the District Planning Conference and the Building Authority Conference to study cross-departmental subjects.   Joint practices notes by the three departments have also been issued to the industry to clarify issues of concern," he said.

"On issues with policy implications, the concerned departments will consult the Bureau for guidance.   The Bureau also holds regular meetings with the departments through directors' meeting, housekeeping meetings and ad hoc meetings to discuss major issues of individual departments or cross-departmental issues involving two or more departments.  We will continue to enhance the current mechanism to promote coordination among departments," he said.

Responding to criticisms in the report about the way the Government had dealt with the development at Sai Wan Ho, the spokesman said, "The existing mechanism for handling land and property development has been practised for some time and has been operating effectively.  Its operation is basically sound.  The incident covered by the report happened in 2001.  In the past few years, the Government has adopted a series of measures in a bid to further enhance the concerned mechanism."

These improvement measures include:

"In keeping with changes over time, we will strive to enhance the current mechanism to promote fairness and transparency," the spokesman said.

Given that Mr Leung Chin-man, the BA involved in the case, has been granted leave by the High Court regarding his application for judicial review of parts of the report by the Director of Audit, and that the legal proceedings relating to the concerned application have commenced and the date of hearing has yet to be fixed, it is inappropriate to make any comments on the relevant recommendations of the report by the PAC for the time being."

 The Government would carefully study the report and respond to Legco within three months.