Hong Kong’s New Renovation Council Expected to Lure Honest Contractors Back

Hong Kong's newly created body to oversee building renovations should coax back the honest consultants and contractors who were driven from the market by bid-rigging syndicates, industry figures said on Monday, a shift that could eventually lower costs for homeowners.

The Building Maintenance Support and Services Council, chaired by Financial Secretary Paul Chan Mo-po, will tighten oversight of the tendering process. Law enforcement agencies will conduct integrity and background checks so that only law-abiding, qualified firms can compete. Chief Executive John Lee Ka-chiu announced the council last Thursday as part of the reforms that followed the Tai Po fire at Wang Fuk Court, which killed 168 people and displaced nearly 5,000 residents. An independent committee investigating the disaster concluded that substandard materials used in the estate's renovation helped the flames spread rapidly, and that numerous features of the project showed the marks of bid-rigging and anticompetitive conduct.

Kenny Tse Chi-kin, vice-president of the Hong Kong Institute of Surveyors, told a radio programme that the council would durably restore order to the building maintenance market and draw in more legitimate firms over time. Such companies, he said, had stayed away because of bid-rigging and triad infiltration, but the government's measures and pre-qualification lists would give them confidence to bid again, since the market still offers genuine business opportunities. Lawrence Ng San-wa, permanent honorary president of the Hong Kong Construction Sub-contractors Association, said competent contractors had gradually withdrawn over the years after facing threats and other unfair treatment. Government regulation, he said, would open projects that were previously out of reach, and the number of contractors coming forward has already surged.

Tse urged the council to examine supervisory consultants' progress reports closely for site safety and quality. Variation orders and extra works, he noted, have in the past left owners with heavy financial losses. He proposed that large projects appoint an independent quality surveyor to stop owners from being exploited through additions made after contracts are signed. He also advocated a two-envelope tendering system weighing quality as well as price: evaluators would assess the technical proposal first and open the price envelope only if it achieved a minimum score.

Ng backed the approach, arguing that contracts should not automatically go to the lowest bidder because inadequate budgets lead to compromised safety and shoddy workmanship. He cited contractors who cut corners on basic scaffold netting to save money. Over the long term, he said, more reputable operators would encourage healthy competition and keep prices reasonable.

The government's reforms will also make bid-rigging a criminal offence, punishable by up to 10 years in prison and a fine of HK$10 million. Barrister and lawmaker Alex Fan Hoi-kit said the proposed dual-track mechanism, which would criminalise bid-rigging while strengthening the civil regime under the Competition Ordinance, must be set out clearly in statute. Under the new law, he explained, the government would first consider handling non-competitive conduct covered by the offence through criminal channels. Should the Department of Justice decline to prosecute, the Competition Commission could pursue the matter civilly, allowing each case to be treated according to its circumstances. Fan added that leniency policies should be debated and written into the legislation, because investigations into covert corruption offences often depend on a defendant who turns prosecution witness.