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1. Roving Exhibitions on Railway Development Over the Next 20 Years

2. Scramble for projects as recession kicks in Layoffs, other cost-cutting measures no surprise to industry observers

3. Tenders invited for sewage job

4. Landslip project for islands

5. Contractors to bid for school

6. Kone wins elevator project

7. Mitsubishi, JGC to do oil study

8. Koreans lock up $20b orders

9. Shining to build apartments

10. DRB-Hicom eyes Proton team

1. Roving Exhibitions on Railway Development Over the Next 20 Years

If you want to know more about the railway development programme in Hong Kong over the next 20 years or whether the new railway lines would be located near your home or place of work, please come and visit one of the Roving Exhibitions on Railway Development Over the Next 20 Years at selected shopping centres, railway stations and the Arrival Hall of the Hong Kong International Airport. The Transport Bureau will organise a series of roving exhibitions from tomorrow (October 23) to end of January 2002 to promote amongst the public a better understanding of railway development in Hong Kong. The exhibition will feature information panels, video on Transport Strategy for the Future and the Railway Development Strategy 2000, an interactive model showing the existing and future railway alignments and a computer game. Computer game players who can provide correct answers to questions in the computer game will receive a souvenir.

The schedule of the Exhibitions is as follows: -

[Source: Hong Kong Government, 22 October 2001]

2. Scramble for projects as recession kicks in Layoffs, other cost-cutting measures no surprise to industry observers

Gammon Construction's decision lat week to sack 81 staff comes as no surprise to industry watchers who predict that redundancies and salary cuts will intensify as the building and civil engineering industries head into recession.

Keith Probert, High-Point Rendel business development consultant, told iBusiness: "It is disappointing, but there is more to come. More companies will be laying off staff, there will be more failures and more companies pulling out of Hong Kong." High-Point Rendel, which formed a joint venture specializing in corporate restructuring with accountant Baker Tilly earlier this year, predicted the industry was headed for crisis months ago.

French contractor Dragages et Travaux Publics, which built Cathay City at Chek Lap Kok airport and recently completed two tunnels on the West Rail project, said contract staff would disappear.

A company spokesman told iBusiness: "As projects have tended to re-employ staff on new contracts. But this isn't going to happen next year because new jobs are not coming in. inevitably we are going to have a smaller workforce compared with the last few years."

Mr Probert believed the government needed to bring forward, by a year, projects earmarked to start in 2003 and beyond in an effort to help the construction industry out of the doldrums.

Chris Morgan, Cannonway Consultants managing director, added: "There is probably downsizing in most construction companies. In the current situation this is not entirely surprising and I would imagine one will see more of it".

The latest figures from the census and Statistics Department show the gross value of construction work fell 6.9 per cent in nominal terms in the second quarter of the year to $27.6 billion. In real terms, the gross value fell 3.7 per cent.

While there was a 7.5 per cent nominal rise in private sector construction to $9.6 billion (14.6 per cent in real terms), work in the public sector slumped 18.5 per cent to $10.2 billion in nominal terms (18.3 per cent in real terms).

Officials attributed the decrease to cutbacks in the public housing programme. Mr. Probert said rail, road and other infrastructure projects announced by Chief Executive Tung Chee-hwa and Secretary for Works Lee Shing-see part of the policy announcement will do little in the short terms to help the industry.

He said many of the schemes such as Route 9, the Shenzhen western corridor and rail projects such as the Island line extension and Central-Sha Tin link will not begin until 2003 and beyond. As a result, firms are trimming costs now.

An industry insider source said: "Across the board pay-cuts are being introduced at many contractors and consultants in an effort to cut costs and help protect jobs."

One top consultant is cutting the salaries of senior staff by a massive 33 per cent, while middle ranking and junior staff are facing smaller cuts in an effort to remain competitive and maintain jobs.

Contracting staff have already suffered hard times with bonuses and salary increase this year either deferred or paid by non-cash means. Employees at one leading construction company received their bonus in grocery coupons.

Contractors said the while staff faced the axe, they were facing cut throat competition as projects dry up. "There is crazy pricing in the market which can only lead to trouble later," one firm said.

Mr. Probert said some contractors had reacted by developing niche areas such as the private financing of public projects, but process of changing the government bureaucracy was moving so slowly opportunities were proving elusive.

Insider pointed to the creation of the Housing Authority's premier league of six contractors - Gammon Construction, Hsin Chong Construction, Hip Hing Construction, Leighton Construction (Asia), Paul Y-ITC General Contractors and Shui On Building Contractors as one such scheme. The six have been short-listed to bid for two technically challenging projects in the scheme's first year of operation. "While this will be useful it will not secure an adequate amount of work. What the group needs is perhaps nine or 12 projects a year," said one source.

Gammon Construction is also trying to ride the recession with the development of niche markets including privately-financed infrastructure and the greater use of prefabrication. But the firm recognises it is early days of both.

[Source: HK iMail, 23 October 2001]

3. Tenders invited for sewage job

Tenders are being invited by the Drainage Services Department by December 7 for the design, supply and installation of electrical and mechanical equipment for the second phase of extensions to Sha Tin sewage treatment works.

[Source: HK iMail, 23 October 2001]

4. Landslip project for islands

Halcrow China is calling for bids on behalf of the Civil Engineering Department by Friday for further landslip preventive work at 30 slopes and retaining walls on Lantau, Peng Chau, Hei Ling Chau,, Cheung Chau and Lamma islands. Work involves the installation of soil nails, rock dowels and raking drains, the provision of surface drainage, cutting back and recompacting existing fill slopes an the construction of retaining walls and buttresses.

[Source: HK iMail, 23 October 2001]

5. Contractors to bid for school

Contractors are being invited to tender by November 9 by the Architectural Service Department for the construction of a "U"-shaped 14,300-square-metres 30 classroom primary school on Ma Wan island. Construction is expected to start in January with completion in July, 2003.

[Source: HK iMail, 23 October 2001]

6. Kone wins elevator project

Finlands' Kone has won its largest contract with a deal from Beijing Oriental Sun City Real Estate Development Company to supply 334 elevators for the Sun City project which covers 70 hectares in eastern Beijing. The first 82 units will be delivered in 2002.

[Source: HK iMail, 23 October 2001]

7. Mitsubishi, JGC to do oil study

Japan's Mitsubishi Corporation and JGC Corporation have signed an agreement with PetroVietnam to carry out a prefeasibility study for a US$2 billion (HK$15.6 billion) oil refinery and petrochemical complex at Nghi Son, in Thanh Hoa province.

[Source: HK iMail, 23 October 2001]

8. Koreans lock up $20b orders

South Korean contractors won US$2.57 billion (HK$20 billion) worth of new contracts in the third quarter, a 27 per cent increase over the year before, the commerce, industry and energy ministry said. Hyundai secured the lion's share with nine contracts totaling US$670 million.

[Source: HK iMail, 23 October 2001]

9. Shining to build apartments

Singapore's Shining Construction has been awarded a S$34 million (HK$145.86 million) contract from UOL Development for the construction of 160 apartments in eight five-storey blocks at Bedok Road.

[Source: HK iMail, 23 October 2001]

10. DRB-Hicom eyes Proton team

DRB-Hicom is planning to join the development team for the Proton city complex at Tanjung Malim, Perak, where the Malaysian car manufacturer plans its second plant. The 1,608-hectare scheme has been revived after stalling in the 1997 financial crisis. Construction will start early next year.

[Source: HK iMail, 23 October 2001]