SKYLINE Technologies -- News Update (21 June 2005 )

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1. Scheme penalises site contractors for safety breaches
ELAINE WU , SCMP 21 June 2005

Developers are looking to reduce the number of work injuries on building sites by withholding a small percentage of contractors' pay if they fail to abide by safety guidelines.

Developer and contractor associations yesterday signed an agreement to start including those terms in their contracts.

The main contractor could have 0.5 per cent to 2 per cent of its pay withheld if it fails to meet criteria such as placing a safety officer on site and having a safety plan.

The voluntary scheme mimics one by the government, which has lower accident rates at its construction sites after implementing the system about 10 years ago.

"Nobody wants accidents at their sites," said Lau Chi-keung, convenor of the construction subcommittee of the Real Estate Developers Association. "If it's a serious accident, it means that work has to be stopped."

Mr Lau said his association would start by persuading its 40 to 50 active members to join, but he said it could be difficult to sign up certain small and medium-sized developers that were not members of the association.

Accidents in the construction sector have accounted for the largest number of workplace injuries and deaths for many years. Seventeen of last year's 24 industrial fatalities came from that sector.

There were 68 accidents per 1,000 workers last year. But in the private sector, that number is 89 accidents per 1,000 workers.

Mr Lau said the most common accidents were workers falling from height and injuries caused by falling objects.

Hong Kong Construction Industry Employees General Union chairman Choi Chun-wa said he was happy to see the developers' association and Hong Kong Construction Association working together on the programme.

"It's a good thing that developers are willing to invest money into improving safety," he said.

But Ng Koon-kwan, secretary-general of the Hong Kong Construction Site Workers General Union, was less optimistic about the scheme.

"These pledges do not have much enforcement effect because it's voluntary," he said.

"There was a similar pledge signed a few years ago that contractors would hire full-time staff on sites. But that has not happened."

2. New Stanley park could see just 100 trees cut down
CHLOE LAI , SCMP 21 June 2005

The Housing Department has proposed scaling back plans to chop down trees to create a horticultural park in Stanley, but still intends to allow 100 trees to be felled despite law experts questioning the project's legality.

District councillors and green activists who attended a recent meeting with the department said yesterday that officials claimed the best they could do was to reduce the felling in the latest version of the controversial gardens.

Legislators expressed regret that the project was going ahead and vowed to have Legco's housing and environmental panel discuss the issue.

The South China Morning Post reported last October that as many as 550 mature trees near the historic Murray Building could be cleared.

Under the original plan, the 48,000-square-metre site would be granted to the Ding Yuen Arboriculture Foundation under a public-private partnership.

Senior barrister Audrey Eu Yuet-mee and University of Hong Kong law lecturer Eric Cheung Tat-ming have said the authority may have violated the Housing Ordinance because it only had power to dispose of land for housing purposes rather than tourism. The department then put the project on hold after the controversy.

Officials met Southern District councillors, the Conservancy Association and representatives of the foundation last Wednesday on the project's progress. They were told that the scaled-back version would keep all key features, according to district councillor Chai Man-hon.

Mr Chai, of the Democratic Party, said: "The officials told us they're determined to build the park and are prepared to find new partners if the foundation refuses to [depart from the original plan]."

But he said the foundation rejected the scaled-back plan and insisted on sticking to the original plans.

Choy So-yuk, of the Democratic Alliance for the Betterment and Progress of Hong Kong, said: "The department should scrap the idea."

Ms Choy said she would try to have Legco's housing and environmental panels discuss the issue.

Conservancy Association chief executive Lister Cheung Lai-ping said the forest could be saved easily by moving the proposed buildings to nearby areas that had already been cleared of trees.

The department said no final decision had been made.

Hong Kong Construction (Holdings) plans to reduce the nominal value of its shares to one cent per share, from $1, in an accounting measure designed to wipe out accumulated losses of $1.8 billion.

Reducing the par value of its shares would also enable the firm to raise funds in future, it said in an announcement yesterday.

The company's main board-listed shares have been trading below $1 for more than three years. As Hong Kong securities law prohibits companies from issuing new shares at below par value, Hong Kong Construction has been effectively blocked from raising funds on the stock market.

The capital reduction leaves Hong Kong Construction with an accounting credit of $2.3 billion, part of which will be used to eliminate its accumulated losses, which stood at $1.8 billion at the end of last year.

The company had been suffering from liquidity problems since late 2000 and had failed to service its loan obligations on several occasions, according to its announcement. By December 2003, all attempts to restructure its debts had failed.

Hong Kong Construction returned to profitability the following year, posting net earnings of $254 million on turnover of $1.01 billion, largely due to a write-back of provisions as part of debt restructuring.

The company was now focusing on investment and construction projects in China's second-tier cities, its chairman Oei Tjie Goan said in its annual report. It is also involved in the engineering and construction of the Shenzhen Convention and Exhibition Centre, the National Grand Theatre in Beijing and the Thames Town Project in Shanghai.

In December 2003, Creator Holdings, a company wholly owned by Indonesian Chinese businessman Eric Oei Kang, son of the chairman and currently the chief executive, bought most of Hong Kong Construction's debt, making Creator the controlling shareholder.

Hong Kong Construction's total outstanding borrowings fell to $589 million at the end of last year, down from a figure of $2.1 billion a year earlier, while its gearing ratio fell to 11.7 per cent from 1,541 per cent.

The company would seek approval for its capital reduction measure from the Listing Committee of the Hong Kong stock exchange and it would convene an extraordinary general meeting to approve the plan in due course, its announcement said.