1 Mega projects could hurt coffers, claims lawmaker
Beatrice Siu and Timothy Chui, The Standard 6 February 2009

The government has been warned that its decision to go ahead with a mechanism allowing contract price adjustment during the economic downturn may prove costly, with 10 major infrastructure projects in the pipeline.

This is because payments to contractors may be adjusted upward or downward as raw materials and labor costs fluctuate.

Lawmaker Wong Kwok-hing of the Hong Kong Federation of Trade Unions said yesterday that with tender bids lower during an economic downturn, some unscrupulous contractors may underbid and then try to apply for contingency increases.

Since the duration of these mega projects means they may last well into an economic recovery in a few years, they will put more stress on the public purse as more money is spent to subsidize rising costs, Wong said.

However, Permanent Secretary for Development Mak Chai-kwong said the vigorous verification checks and documentation required for contingency raises would keep contractors honest.

He said the government has extended its risk- sharing system to all public works project contracts to "help the small- and medium-sized contractors cope better with financial difficulties resulting from unpredictable inflation of construction costs."

A Development Bureau spokeswoman said 66 percent of public works contracts with a duration of 21 months or less awarded from 2003 to 2007 were given to small- and medium-sized contractors.

A Hong Kong Construction Association spokesman said it is a good and timely move given the enormous upswing and fall of oil prices last year.

Architecture surveying and planning lawmaker Patrick Lau Sau-shing said the system is much more equitable, as it allows for partnerships between the government and contractors to better shoulder price changes. He said the arrangement also means contractors will not have to take on as much risk.

"This way the government gets what it pays for and it is better for the public," he said.

Between January 2007 and March 2008, the cost of steel reinforcements rose 114 percent, followed by a 70 percent spike in light structural steelwork and a 40 percent rise in the cost of sand.

Diesel rose 28 percent and bitumen prices rose 40 percent, according to the Development Bureau.

2 Architects to rebuild school's foundations
Olga Wong, SCMP6 February 2009

The foundations of the city's historic Central School will be rebuilt by experts on the adjoining police married quarters site in Central, after two weeks of public consultations that begin later this month.

The public consultations, organised by Central and Western District Council with the help of artists and architects - under the name Former Central School Envisioning Days - will be held from February 21 to March 1 at the former police married quarters.

To aid the public consultation, the old police quarters will display a history of the old school and proposals for revitalising the site into a base for arts-related enterprises. A wide variety of programmes and activities will be held on the "envisioning" days.

The Hong Kong Institute of Architects will recreate the school's foundations directly above the site where remnants of the real foundations were found in 2007.

"We won't uncover the historic site, which is currently covered with soil, because it would cause damage to the heritage without a long-term conservation plan," said Eric Lee Chung-ming, chairman of the institute's heritage and conservation committee. "But, with the installation, people will actually be able to walk on the site and feel the presence of the old structure."

Tickets for the consultations are available at the Central and Western District Office from today.