The following is issued on behalf of the Hong Kong Monetary Authority: The Hong Kong Monetary Authority (HKMA) received enquiries from the members of the public about fraudsters posing as HKMA staff over the telephone asking for … read more
Following is a question by the Hon Lau Kwok-fan and a reply by the Secretary for Development, Mr Michael Wong, in the Legislative Council today (June 23):
Question:
Last month, the Development Bureau submitted a paper to give an account of the significant deviations between the accepted tender prices (successful bid prices) of 22 capital works contracts awarded in the fourth quarter of last year and the sums allowed in the Approved Project Estimates for such contracts. The successful bid prices concerned accounted, on average, for only 70 per cent of the sums allowed, and the relevant percentages for three of the contracts were even less than 60 per cent of the sums allowed. On the other hand, some contractors have relayed that the social incidents and the epidemic have caused delays in works and rise in costs. This situation, coupled with the recent surge in the prices of construction materials, has left such contractors in misery. In this connection, will the Government inform this Council:
(1) given that the causes as set out in the aforesaid paper for the significant deviations include that “this is due to keen competition under prevailing market conditions, which resulted in lower rates in the returned tenders”, whether it has assessed if this situation will cause contractors to “deliver poorer-quality works at lower prices” or hire illegal workers in order to cut costs, or result in non-delivery of the projects due to the contractors’ failure to make ends meet;
(2) apart from adopting a “two-envelope two-stage” tender approach, whether the Government will consider setting standards for “reasonably low bid prices” and excluding the tender with the lowest bid price from the evaluation of price proposals, so as to avoid vicious competition due to extremely low prices; if so, of the details; if not, the reasons for that; and
(3) in the light of the impacts of the epidemic on works projects, whether the Government will, apart from allowing contractors a longer construction period, provide them with other assistance; whether it will, by making reference to the Mainland authorities’ practice of reasonably sharing out with contractors the risks of price fluctuations in respect of the costs of municipal works projects, consider providing subsidies to the contractors to help them meet the extra expenses arising from the price escalation of construction materials?
Reply:
President,
The Government has been adopting the principles of “achieving best value for money” and “maintaining open and fair competition” in the tender exercises of public works contracts, which are conducted according to clear guidelines and well-established procedures. On tender evaluation, we do not adopt “the lowest bid wins” as the assessment criterion. Apart from considering the tender prices, we will also examine tenderers’ technical competence and past performance during tender evaluation. In general, tender evaluation of public works contracts comprises two parts. First, we will assess tenderers’ technical competence and past performance, followed by considering their tender prices. Depending on the nature of the works, the weighting of technical score is generally 40 per cent of the overall score, which will be increased to 50 per cent for highly complex projects. After summation of the technical and price scores, the tender with the highest overall score will be recommended for acceptance. To protect the public interest, we will also assess the financial capability of the tenderer with the highest overall score and the reasonableness of its bid, so as to ensure that the successful tenderer is fully capable of completing the works in accordance with the terms of the contract. For tenders with unreasonably low prices, even if they obtain the highest overall scores, they will not be recommended for acceptance. The above-mentioned tender evaluation method not only follows the public finance principles, but also enables us to select competent contractors to undertake the works. In fact, Hong Kong has been amongst the top-rank cities in the world in respect of infrastructure competitiveness over the years, which reveals that our tender evaluation system has been effective.
Our responses to the questions raised by the Hon Lau Kwok-fan are as follows:
(1) Over the eight quarters from 2019 to 2020, the average accepted tender prices for major capital works contracts with value exceeding $30 million, excluding term contracts and projects with tendered prices known before seeking funding approval, are around 81 per cent of the sums allowed in the Approved Project Estimates for such contracts (Sums Allowed). As far as the fourth quarter of 2020 is concerned, the accepted tender prices, on average, are around 77 per cent of the Sums Allowed. As regards the three works contracts mentioned by the Member, we have examined the situations in detail during tender evaluation and considered the tender prices reasonable.
​Notwithstanding the above, works departments will closely monitor the works during the construction stage to ensure that contractors will comply with all the contract requirements. If the performance of a contractor is not satisfactory, the works department will urge it to make improvements and reflect this in its performance report. If the unsatisfactory situation persists, the works department will follow the Development Bureau’s Contractor Management Handbook and relevant guidelines to take regulating actions against the contractor, including temporary suspension from tendering or even removal from the lists of approved contractors for public works. According to the works departments, there has been no problem with the contractor’s performance in the three works contracts mentioned above. The works departments will continue to monitor closely the contracts concerned.
​(2) As I just said, clear guidelines have been in place to assess and exclude tenders with unreasonably low bid prices under our current tender evaluation mechanism. This will ensure the quality and capability of the successful bidders and avoid contract default or other risks due to inadequate tender prices. In assessing whether a tender price is reasonable or not, we will consider several factors, including (1) comparison of the tender price with those of other bidders, the estimated contract value and the recent price of the same type of works; (2) comparison of the tender prices of the major types of works in the contract with the market prices; and (3) whether the tender has adopted a bidding strategy with a “front-loaded” cash flow. If the works department considers the tender price unreasonably low, which may affect the bidder’s capability to fulfill the contract requirements or even pose a risk of contract default, the department will not accept the tender.
​As there has been a mechanism to ensure that unreasonably low tender prices will not be accepted, we have no plan to impose a requirement to exclude the tender with the lowest bid price in tender evaluation across the board.
(3) On the impact of the epidemic on the local construction industry, I would like to briefly elaborate the concerted efforts of the Government and the construction industry, as well as the relief measures that the Government has implemented. Over the past year or so, we have launched a number of relief measures under the two rounds of the Anti-epidemic Fund, to support the construction sector. Such measures include provision of direct subsidies to construction workers and construction-related enterprises, introduction of the “Employment Support Scheme” for the construction sector, etc. and a total of $6.3 billion has been disbursed. In addition, the Development Bureau and works departments have jointly created more than 6 500 time-limited jobs to give impetus to the labour market. Also, we have increased the quotas for graduate trainees and summer interns by 250 and provided subsidies for employers to employ about 2 100 graduates and assistant professionals. This year, we will continue to provide about 3 000 time-limited jobs, recruit 100 more summer interns, and subsidise private enterprises to employ about 1 700 graduates and assistant professionals. Moreover, the Labour and Welfare Bureau will increase the quota of the Engineering Graduate Training Scheme to 500.
​For public works contracts, in addition to granting extension of time for completion due to the adverse impact of the epidemic, we have also offered advance payments to contractors of on-going and new works contracts to ease their cash flow problem. Over the past year or so, a total of $2 billion advance payment has been made in over 280 public works contracts. The measure has been well received by the construction industry as it can effectively relief the contractors’ cash flow problems. As regards Member’s concern about fluctuation in prices of the construction materials, there has been a mechanism in place for typical works contracts to allow adjustments of labour and materials prices. We follow the changes of the labour and materials price indices and adjust payments to the contractors upward or downward thereby reducing the contractors’ risk in respect of price fluctuations.
​Thank you, President. read more
The Department of Health (DH) today (June 23) appealed to members of the public not to buy or consume a slimming product named 2WEEKS as it was found to contain an undeclared and banned Western drug ingredient that might be dangerous to health.
Acting upon intelligence, a local seller was found offering for sale the above slimming product via a social media platform. A sample of the product was obtained for analysis and the Government Laboratory’s results confirmed that the sample contained sibutramine, a Part 1 poison under the Pharmacy and Poisons Ordinance (Cap. 138). The DH’s investigation is continuing.
Sibutramine was once used as an appetite suppressant. Since November 2010, products containing sibutramine have been banned in Hong Kong because of increased cardiovascular risk.
According to the Ordinance, all pharmaceutical products must be registered with the Pharmacy and Poisons Board of Hong Kong before they can be legally sold in the market. Illegal sale or possession of unregistered pharmaceutical products or Part 1 poisons are criminal offences. The maximum penalty for each offence is a fine of $100,000 and two years’ imprisonment.
The DH spokesman strongly urged members of the public not to buy products of unknown or doubtful composition, or to consume products from unknown sources. Members of the public who have purchased the above product should stop consuming it immediately. They should consult healthcare professionals for advice if feeling unwell after consumption.
The spokesman added that weight control should be achieved through a balanced diet and appropriate exercise. The public should consult healthcare professionals before using any medication for weight control. They may visit the website of the Drug Office of the DH for “Health message on overweight problem and slimming products” and “Information on slimming products with undeclared Western drug ingredients” for more information.
The public may submit the product to the Drug Office of the DH at Room 1801, Wu Chung House, 213 Queen’s Road East, Wan Chai, during office hours for disposal.
A spokesperson for the Civil Service Bureau said that the Government received the Report on the Grade Structure Review for the Disciplined Services from the Standing Committee on Disciplined Services Salaries and Conditions of Service (SCDS) today (June 23). The Report also covers the Standing Committee on Directorate Salaries and Conditions of Service (SDCS)’s advice on the salary structures of the heads of the disciplined services departments/agency.
“Since 2008, when the last grade structure review (GSR) for the disciplined services was conducted, the social and economic landscape of Hong Kong has witnessed significant changes. The use of technology has also induced social change. The COVID-19 epidemic in the past two years, together with the responsibilities for safeguarding national security, have also brought about significant changes and tremendous challenges to the operating environment of the disciplined services. As it is difficult to identify comparable posts and jobs in the private sector for the disciplined services, and individual grades are also facing recruitment and retention difficulties, the Chief Executive-in-Council decided to conduct a GSR for the disciplined services in October 2018 to ensure that the grade structures and remuneration of the disciplined services are still effective in attracting and retaining talent under the current social environment as well as the job nature, responsibilities and workload of the disciplined services,” the spokesperson said.
“To better understand the work of the disciplined services and to listen to their views, the Government noted that the SCDS organised 19 visits to the seven disciplined services departments/agency and held a good number of meetings with both management and staff sides. The SCDS also received more than 1 380 submissions from the members of the public. The Government is grateful to the consultative committees for the time and effort they have dedicated to this review,” the spokesperson added.
“The Government will examine in depth the review findings and recommendations, and consult relevant stakeholders including the management side of the disciplined services departments/agency, as well as the staff side of the grades concerned. Upon receipt of the views of the stakeholders concerned, the Government will submit as soon as possible its recommendations on the way forward to the Chief Executive-in-Council for a final decision. The Government aims to seek the approval of the Establishment Subcommittee and the Finance Committee of the Legislative Council (LegCo) for the final recommendations within the current term of LegCo,” the spokesperson continued.
The SCDS advises and makes recommendations to the Government on matters concerning the pay and conditions of service of the disciplined services. The SDCS advises the Government on matters affecting the directorate of the general civil service (excluding the disciplined services and the Judiciary), including the pay and conditions of service of the heads of the disciplined services. read more
The Chief Executive, Mrs Carrie Lam, today (June 23) received the Report on the Grade Structure Review for the Disciplined Services from the Standing Committee on Disciplined Services Salaries and Conditions of Service (SCDS) and issued the following statement:
The last grade structure review (GSR) for the disciplined services was completed in 2008. Over the past decade, Hong Kong’s social environment, economy, technological development and landscape have all witnessed considerable changes. In recognition of these changes, which no doubt have an impact on the nature and amount of work of the disciplined services, and the fact that there are no comparable jobs in the private sector for benchmarking, I announced in the 2018 Policy Address that a GSR for all disciplined services would be carried out to ensure that the grade structures and remuneration of the disciplined services are effective in attracting and retaining talent.
Upon the Government’s invitation, the SCDS and the Standing Committee on Directorate Salaries and Conditions of Service (SDCS) conducted a thorough review of matters concerning the disciplined services including their job nature, operating environment and challenges faced, as well as their recruitment and retention situation and career progression. During the process, the two committees met with staff and departmental management and reviewed submissions received from the relevant staff associations. I wish to extend my heartfelt gratitude to both committees for their effort in completing the review amidst some unprecedented challenges posed by the social unrest and the COVID-19 epidemic. I have instructed the Civil Service Bureau to consult relevant stakeholders and examine the review findings and recommendations as soon as possible, with an aim of seeking approval of the revised grade structures by the Legislative Council within this legislative year.
I notice that both committees have in their Report taken note of concerns expressed by the staff side on matters that went beyond grade structure issues. They have also addressed those matters in the Report for consideration by the Government. I will invite relevant bureaux/departments to consider those concerns separately to come up with a government response.
​Hong Kong is blessed to have a dedicated and professional civil service and the seven disciplined services departments/agency are playing a pivotal role in ensuring the rule of law. They are often at the front line to keep the city safe and form the backbone to law and order in Hong Kong. The unprecedented social unrest and the national security risks we have seen are posing additional challenges to the disciplined services. I would like to take this opportunity to thank all disciplinary colleagues for their perseverance, solidarity and commitment in serving the public even amidst difficult times. read more