Policy Address

Construction Industry

Public Works Projects

128.         Construction costs have been escalating in recent years.  Several major projects have experienced significant cost overruns.  There is a need for the Government to strengthen cost control. 

129.         The Government will soon roll out new measures in relation to public works projects to reduce unnecessary design and contractual requirements under a “no frills” principle.  Such measures, including a holistic review of relevant guidelines, will embrace innovative design concepts and approaches without compromising technical and safety standards.  The Government will put in place an indicative cost system for public works projects.  Except for special circumstances and projects that have entered the design stage, the unit cost of all new government building projects must be lower than the benchmarks.  In addition, the works departments will enhance the standardisation of project design, promote mechanisation and construction by prefabrication, and adopt the guiding principle of “design for buildability” so as to reduce costs without undermining safety.  Procurement and tendering of projects will be refined with the aim of lowering the risk premium included in the tender price and reducing the overall project cost.  The Secretary for Development will establish and lead a dedicated office to take forward the relevant work. 

130.         The Government will make reference to overseas practices and bring in contractors and consultancies from overseas, with a view to expanding the overall capability and capacity of the local construction sector to undertake projects.  This will help contain cost escalation caused by insufficient capability and capacity. 

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