LCQ6: Corrupt practices involving building maintenance works
Following is a question by the Hon Emily Lau and a reply by the Secretary for Home Affairs, Mr Tsang Tak-sing, in the Legislative Council today (December 4):
Question:
I have learnt that some lawbreakers have secured major maintenance contracts of a number of housing estates by means of bid-rigging, bribing and intimidating, and made huge profits from these works. The exorbitant maintenance costs have posed heavy financial burdens on many owners, and even led to violent confrontations between owners and members of owners' corporations (OCs). Recently, some members of the construction industry and a former staff member of the Independent Commission Against Corruption (ICAC) have commented that bid-rigging and price jacking practices involving building maintenance works are very common and the building maintenance industry has been monopolised by syndicates. In this connection, will the Executive Authorities inform this Council:
(a) of the number of corruption reports received by ICAC which involved building maintenance works, and the respective numbers of people who were arrested, prosecuted for and convicted of the related offences, in each of the past five years, as well as the penalties generally imposed by the courts on the convicted persons, with a breakdown by identity of these persons (including members of OCs as well as staff of consulting engineers, contractors and property management companies);
(b) whether they have looked into the gravity of the problem of tendering exercises for building maintenance works being manipulated by syndicated bid-rigging; and
(c) apart from the "Renosafe Scheme" jointly launched by the Police in collaboration with the relevant government departments and organisations in September this year, and the new tendering arrangement applicable to "registered general building contractors", whether they have formulated other measures to prevent and combat corruption involving building maintenance works, and whether they will allocate more resources to curb the problem?
Reply:
President,
Building maintenance works of large-scale housing estates usually incur substantial costs. Relevant Government departments have been highly vigilant in the potential involvement of lawbreakers in such works by employing unlawful means to make profits. Departments have been working very closely to implement a number of measures, which include (i) helping the public to take precaution against unlawful activities pertaining to building maintenance works; (ii) gathering intelligence on the activities of unscrupulous organisations; and (iii) taking enforcement actions in the light of reports and intelligence received.
My reply to Hon Emily Lau's question is as follows:
(a) The numbers of corruption complaints received by the Independent Commission Against Corruption (ICAC) relating to building maintenance works, persons prosecuted and persons convicted over the past five years are at Annex. ICAC does not maintain any breakdown by identity of these persons.
(b) ICAC and the Hong Kong Police Force (HKPF) will actively follow up reports made by the public or referrals from relevant organisations, and conduct in-depth investigation into corruption practices and other unlawful acts in connection with building maintenance works.
The Urban Renewal Authority (URA) and the Hong Kong Housing Society (HKHS), the implementation agencies of the "Operation Building Bright" (OBB) as well as other building maintenance assistance schemes, have been closely monitoring the tendering exercises of relevant building maintenance contracts. While they observe that the tender prices in some cases may deviate from the market level, there has been no concrete evidence suggesting prevalence of syndicated bid-rigging.
(c) The Government is very concerned about the crimes in relation to building maintenance works. Relevant departments are working together and adopt a multi-pronged approach, including launching publicity and education programmes, enhancing procedures, strengthening support for the owners and owners' corporations (OCs), and carrying out investigation and enforcement actions, to prevent unlawful activities in the course of building maintenance works.
For publicity and education, ICAC and the HKPF, in collaboration with the Home Affairs Department (HAD), URA and HKHS, etc, have been providing OCs and owners with information on corruption and crime prevention as well as guidelines on the tendering of building maintenance works. Pursuant to the Building Management Ordinance (Cap 344), we have issued the Code of Practice on Procurement of Supplies, Goods & Services and the Code of Practice on Building Management & Maintenance so that OCs can follow the rules and principles therein in the course of planning and tendering. Moreover, ICAC will publish in mid-December the new edition of the Building Maintenance Toolkit, offering more effective anti-corruption advice on how to deal with common problems as well as providing checklists and templates for OCs' and owners' reference. At district level, District Offices and ICAC frequently organise education and publicity activities to promote integrity building management. ICAC also visits OCs to elucidate anti-corruption laws and point out the areas that are prone to corruption and bribery. Through the RenoSafe Scheme, HKPF provides OCs intending to carry out building maintenance works with a booklet, listing out possible crimes arising from improper handling of building maintenance works and offering advice on crime prevention. For those buildings already participated in the Scheme, posters or banners will be displayed at conspicuous positions of the building to strengthen publicity and deterrent effect.
On the law enforcement front, ICAC and HKPF have been actively following up on and investigating all complaints and reported cases. Recently, HKPF has set up a special working group under its Organised Crime and Triad Bureau. Through the newly launched Renosafe Scheme, the respective District Anti-Triad Squad will maintain direct contact with the OCs and owners concerned, and invite them to report to the police information of crime relating to building maintenance works with a view to stepping up its intelligence gathering efforts.
As regards strengthening support for the OCs and owners, HAD, through the Building Management Professional Advisory Service Scheme, has engaged professional property management companies (PMCs) to assist target buildings to establish OCs, assist OCs in taking forward maintenance works and to follow up on tender matters. Moreover, HAD is liaising with professional institutes to launch a pilot scheme to offer professional advice and support for engaging authorised persons or works consultants to those OCs without engaging a PMC and intended to carry out large-scale maintenance.
Besides, HKHS and URA enhance from time to time the procedures and arrangements of OBB and other schemes with a view to eradicating bid-rigging. For instance, consultancy firms participating in the tendering exercise are required to submit to the OC working time allocation tables of authorised persons and relevant professionals so as to allow the OC to have sufficient information to evaluate whether the cost to be charged by the firms are reasonable, thereby avoiding the risk of bid-rigging owing to low cost. Independent consultants are also engaged to provide the participating buildings with estimated costs for the maintenance items in order to facilitate the OC to assess whether the tender prices are comparable with the market level. Apart from sending notifications of works eligible for OBB subsidies, independent professional assessment and points-to-note to property owners, HKHS and URA will participate in OC meetings and organise briefings in different stages to explain matters of attention in planning maintenance works so as to enhance owners' knowledge of building maintenance and provide technical support. HKHS and URA have recently launched the new tendering arrangement for engaging contractors with the aim of further fostering an equitable, open and competitive tendering environment.
The Government calls upon and encourages owners to play an active role in building maintenance works, in particular learning more details of the works as early as possible and attending owners' meetings, and discuss with other owners on the maintenance proposals. This will help reduce disputes as well as other illegal activities.
Thank you, President.
Ends/Wednesday, December 4, 2013
Issued at HKT 18:10