About HK$500 billion (US$64.5 billion) in public works will be accelerated over the coming five years to pull Hong Kong out of recession, the city’s leader has pledged.
Bigger projects in housing, rail and roads would be divided up so smaller contractors would be eligible for tender, Chief Executive Carrie Lam Cheng Yuet-ngor said on Tuesday, unveiling an annual HK$100 billion lifeline for the struggling construction sector.
While more tenders would be available, the government would also speed up and simplify the approval process, she added.
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“The construction sector is an example of our approach to revive the economy, and we are going to apply the same mentality to other sectors,” Lam said before her weekly Executive Council meeting. “During an economic downturn, construction costs have come down as reflected in government tenders. This is a good time to expand public works as well.”
Amid the Covid-19 pandemic, the construction sector has been hit with an unemployment rate of 11.1 per cent and 8.1 per cent for underemployment, higher than the city’s overall mark of 6.1 per cent and 3.8 per cent respectively between June and August.
The industry’s jobless rate so far this year is the worst since the post-global financial crisis in 2009.
“We want to create more job opportunities and help the industry retain jobs,” Lam said.
She added that in addition to general government projects, there were residential developments by the Housing Authority, and the MTR Corporation’s planned rail lines, as well as hospital expansions and proposed facilities within universities.
In the last financial year 2019-20, the Legislative Council approved HK$170 billion in public works, which Lam promised would boost construction projects. Of these, half of the tenders had been awarded, with 48 per cent still under tender, and the rest to be put up for grabs imminently, the city’s leader said.
There are some workers who are out of a job for months, and it would be great to have more projects coming in
Allan Chan, Hong Kong Construction Association
With the new Legco term set to start in October, Lam said tenders for new projects would be launched simultaneously along with seeking lawmakers’ approval, whereupon contracts would be granted.
To keep smaller contractors and consultants afloat, the government would accelerate public works such as repair and maintenance of facilities, and anti-landslide projects.
“I asked other public entities such as the Housing Authority, Housing Society, Urban Renewal Authority, Science Park and Cyberport to speed up projects and simplify the approval process,” Lam said.
Allan Chan Sau-kit, president of the Hong Kong Construction Association, welcomed the measures.
“There are too few projects to sustain jobs for some months,” he said. “There are some workers who have been out of a job for months, and it would be great to have more projects coming in.”
But he said it would take another few months between a project launching and a contract being awarded.
Hong Kong remains in deep recession, with its gross domestic product contracting 9 per cent in the second quarter year on year, following a 9.1 per cent decline in the first quarter.
This article HK$500 billion in public works to be ramped up over five years to drag Hong Kong out of recession first appeared on South China Morning Post