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1. 100 building contracts on the way

1. 100 building contracts on the way
Danny Chung , The Standard 31 October 2006

Hong Kong's construction industry can look forward to more than 100 government contracts worth at least HK$30.7 billion that are due for approval during the 2006-07 Legislative Council session.

Last week, Financial Services and the Treasury Bureau submitted details of 113 items for the approval of legislators in the public works subcommittee of Legco's finance committee.

The government only gave an indicative cost of the projects which total HK$30.7 billion.

During the previous Legco session, the government submitted a list of only 76 items worth at least HK$19.1 billion.

Most of the 86 projects, are expected to cost less than HK$200 million, while 18 are expected to cost between HK$200 million and HK$500 million.

Only nine are estimated to cost more than HK$500 million. About 25 projects worth at least HK$6.2 billion were rolled over from the previous Legco session.

However, contractors and consulting firms who may be expecting that the projects will be launched soon are likely to be disappointed.

According to the bureau's estimates, only two are expected to start work this year.

Instead, 98 projects will commence in 2007, of which 59 will start in the second half. Eleven projects are due to start in 2008.

Big-ticket projects include stage 2 of trunk road T4 at Sha Tin, construction of a new campus at Tiu Keng Leng for the Vocational Training Council, redevelopment of Caritas Medical Centre phase 2 and redevelopment of Hong Kong Sports Institute.

The Housing, Planning and Lands Bureau is seeking funds for the detailed design of infrastructure work on the southern part of the disused runway at Kai Tak possibly for a new cruise liner terminal there.

The detailed design will not be complete until 2009, assuming an early 2007 start date.

The bureau is also seeking funds to allow a detailed engineering feasibility review of the preliminary outline development plan for Kai Tak. The review is due for completion in 2009.

According to government statistics, the gross value of construction work by main contractors has fallen steadily every year since 1998.

Contractors carried out work worth HK$44.4 billion in the first half of 2006, down 2.5 percent compared with the same period last year.

While acknowledging there are more projects for this Legco session, Derek Zen Wei-peu, chairman of Build King Holdings (0240), said there is still a lot of talk and not much action.

"When it comes to the crunch, they [government] blame Legco," Zen said. He added so far this year, the industry's total turnover has dropped and the private sector has not been buoyant either.

"In Hong Kong , for the whole market, total turnover could be worse than last year," Zen said. However, consultants have told him they are busier this year with new projects.

"If they are busier this year, then next year we will be busier," Zen said.