Call for new statutory body to oversee renovation works

Call for new statutory body to oversee renovation works

HKIS says new body would ensure better tendering and quality of work

A new statutory body or authority should be set up to supervise consultants and contractors involved in renovation of old buildings to prevent tender collusion and ensure quality of work, according to the Hong Kong Institute of Surveyors.

In a press release Wednesday the institute said that while it welcomed the new tendering measures to level the playing field as regards prevention of interference during tendering, there was a risk of inadequate supervision and bad quality of work even if the tender was reasonable.

Last week, the Urban Renewal Authority and Hong Kong Housing Society stipulated that a Certified Public Accountant would handle tendering arrangements for renovation work under the government’s Operation Building Bright scheme that provides subsidised funding for renovation of old buildings.

In the new arrangement contractors are assigned an eligibility code to conceal their identities and they would submit two envelopes for the tender.

The first envelope would show only the contractor’s eligibility code and his tender price and breakdown of works while the second envelope would have the full version of the tender with identity of the contractor and detailed tender prices.

The accountant would opened tenders in the presence of URA and HKIS officials and three members of the owners’ corporation with the first envelope given to the owners’s corporation for analysis by its consultant.

The second envelope would only be released after the URA and HKHS examine the tender analysis report compiled by the owners’s corporation.

The institute said the new arrangements may not be enough to keep the identities of the tenderers confidential.

It gave several reasons for this view.

“Staff at an independent accountant firm are not professionals in construction and in handling the tenders of building renovation may not take into account the special circumstances of renovation work,” the institute said.

It added contractors’ staff doing a tender site inspection or tender interview could cause the identity to be exposed.

There could be secret identification markings or unusual pricing by contractors to alert unscrupulous consultants and members of owners’ corporations.

The staff of the independent accountant firm may also be drawn into the scheme to influence the outcome of tendering.

Lastly a contractor that won the tender under the new arrangements may be persuaded to give up the tender so that an unscrupulous contractor would be awarded the tender.

A block of flats undergoing renovation in Tai Po  (Danny Chung)

A block of flats undergoing renovation in Tai Po (Danny Chung)

The institute said the best way to improve matters was getting the right professional consultants and qualified contractors on board right from the start.

To this end, the institute is proposing that a statutory authority be set up to implement a strict qualification and registration system for consultants and contractors.

In addition, a supervision system should be in place to monitor the performance of the consultants and contractors.

The statutory authority would be comprised of government officials, members of the public and members of the professions.

The institute said such an authority coupled with enforcement action by the police and the Independent Commission Against Corruption would drive out unscrupulous companies and prevent collusion in tendering and interference in the market.

In response to enquiries by Construction Post, a spokesperson for the URA said that the objective of the new arrangements was to encourage more bidders to come forward as their identities would be protected without fear of intimidation or interference from others.

“Hence, a Certified Public Accountant is considered appropriate for this task as the assessment of tender documents and the eventual selection of the successful bidder will rest with the owners’ corporation and its authorised person,” the URA spokesperson said.

In February 2009, the government launched the scheme with initial funding of HK$1 billion to do up old buildings and also provide employment for the construction industry in the aftermath of the 2008 financial crisis.

Danny Chung


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