hkskyline
April 3rd, 2006, 05:56 PM
Busy time for contractors as public works projects hit $19.68b
Danny Chung
13 March 2006
Hong Kong Standard
The value of new public works contracts to be launched in the next financial year has risen for the first time after dropping steadily for the past few years.
Contractors can look forward to more work, with the total value of new projects due to start rising by about a third to HK$19.68 billion compared with the estimate for the current year, which ends next month.
However, this figure is still short compared with the estimate of HK$25.93 billion for 2004/05 and HK$60.75 billion for 2003/04.
In the financial years 2001/02 and 2002/03, it was even higher, at HK$98 billion and HK$90 billion, respectively.
In his budget speech, Financial Secretary Henry Tang said the government would be spending HK$29 billion on public works annually for the next five years. But the government estimates it will spend only HK$781 million on the 60 new projects next year.
As such, most of the HK$29 billion is still going towards existing projects for schools, hospitals, roads like Route 8 and drainage schemes.
By comparison, the amount to be spent on new projects rolled out in 2005/06 was HK$906 million, covering 71 projects. "I don't think people were expecting him [Tang] to announce some sort of new major initiative. I can't even think what he would do unless he was to suddenly announce the Hong Kong-Zhuhai-Macau bridge was going to start at the end of the year," an industry consultant said.
Some of the new projects, however, are not new as 20 of them with a total value of HK$6.56 billion in 2005/06 were rolled over into 2006/07, with a revised total of HK$10.9 billion.
One rolled-over project accounted for most of the increase in the value.
This was the West New Territories landfill extension, which has a new estimate of HK$4.81 billion compared with its previous estimate of only HK$40 million in 2005/06.
Civil engineering work forms most of the new projects, including HK$6.26 billion for water mains replacement, HK$2.89 billion for various drainage schemes and HK$537 million for advance works at Sunny Bay.
Building projects include 11 new schools worth HK$1.15 billion and redevelopment of Caritas Medical Centre costing HK$1.16 billion.
The schools "surprised" the consultant who said:"Do we have the population growth that's going to demand all these schools?"
For the current financial year, nine school projects worth HK$954 million and due to start this year were not rolled over into the next financial year.
The government also intends to spend HK$2 million in the next financial year on its controversial Tamar government headquarters project due to start in the first quarter of 2007/08 and costing HK$4.91 billion. Contractors have been facing lean times over the past few years as the public and private sectors cut back on spending on construction projects.
Government statistics show the gross value of work performed by main contractors has fallen by 5 percent a year from its peak in 1998 to about HK$93 billion in 2004.
In the first three quarters of 2005, the figure was HK$68.2 billion.
Despite this, the consultant said the industry was feeling more bullish with new projects like the MTRC's Island Line extension and Ocean Park redevelopment and various private sector building projects to look forward to.
Danny Chung
13 March 2006
Hong Kong Standard
The value of new public works contracts to be launched in the next financial year has risen for the first time after dropping steadily for the past few years.
Contractors can look forward to more work, with the total value of new projects due to start rising by about a third to HK$19.68 billion compared with the estimate for the current year, which ends next month.
However, this figure is still short compared with the estimate of HK$25.93 billion for 2004/05 and HK$60.75 billion for 2003/04.
In the financial years 2001/02 and 2002/03, it was even higher, at HK$98 billion and HK$90 billion, respectively.
In his budget speech, Financial Secretary Henry Tang said the government would be spending HK$29 billion on public works annually for the next five years. But the government estimates it will spend only HK$781 million on the 60 new projects next year.
As such, most of the HK$29 billion is still going towards existing projects for schools, hospitals, roads like Route 8 and drainage schemes.
By comparison, the amount to be spent on new projects rolled out in 2005/06 was HK$906 million, covering 71 projects. "I don't think people were expecting him [Tang] to announce some sort of new major initiative. I can't even think what he would do unless he was to suddenly announce the Hong Kong-Zhuhai-Macau bridge was going to start at the end of the year," an industry consultant said.
Some of the new projects, however, are not new as 20 of them with a total value of HK$6.56 billion in 2005/06 were rolled over into 2006/07, with a revised total of HK$10.9 billion.
One rolled-over project accounted for most of the increase in the value.
This was the West New Territories landfill extension, which has a new estimate of HK$4.81 billion compared with its previous estimate of only HK$40 million in 2005/06.
Civil engineering work forms most of the new projects, including HK$6.26 billion for water mains replacement, HK$2.89 billion for various drainage schemes and HK$537 million for advance works at Sunny Bay.
Building projects include 11 new schools worth HK$1.15 billion and redevelopment of Caritas Medical Centre costing HK$1.16 billion.
The schools "surprised" the consultant who said:"Do we have the population growth that's going to demand all these schools?"
For the current financial year, nine school projects worth HK$954 million and due to start this year were not rolled over into the next financial year.
The government also intends to spend HK$2 million in the next financial year on its controversial Tamar government headquarters project due to start in the first quarter of 2007/08 and costing HK$4.91 billion. Contractors have been facing lean times over the past few years as the public and private sectors cut back on spending on construction projects.
Government statistics show the gross value of work performed by main contractors has fallen by 5 percent a year from its peak in 1998 to about HK$93 billion in 2004.
In the first three quarters of 2005, the figure was HK$68.2 billion.
Despite this, the consultant said the industry was feeling more bullish with new projects like the MTRC's Island Line extension and Ocean Park redevelopment and various private sector building projects to look forward to.