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labour shortage has been having on construction project in Hong Kong. As the Chairman of the Capital Works Select Committee, charged with overseeing the implementation of the Council's Capital Works Programme worth some $360 million in this financial year, I have inquired into how the labour shortage is affecting the Council's construction projects.
The labour shortage has two major effects on the Council's work. Firstly, it is a major factor in the rapid increase in construction costs. The Architectural Services Department's Tender Price Index shows a rise of almost 20% in the last twelve months and 53% since 1985. Certainly the tender price index includes labour costs and building material costs. If we only look at labour costs, ever since 1985 to 1988, the increase is 58%. The second effect is that fewer firms are tendering for each project. A comparative analysis of firms tendering for UC projects in the periods January to September 1985 and January to September 1988 shows a decline in the average number of firms tendering. In respect of capital projects estimates to cost under $20 million, the average number of firms tendering was 27 in the first period (i.e. January to September 1985) and 21 in the second. In other words, we only have 21 firms tendering for our capital projects estimated cost less than 20 million dollars. More significantly, for projects estimated to cost $20 million and above, the number was 14 in the first period and 7 in the second.
One area in which it would seem likely that the labour shortage would have an effect is on delays to the completion of projects under construction. However, I am assured by the Architectural Services Department that they do not currently grant extensions to contracts simply because of an inability to employ sufficient labour. When I talk about contracts, I mean UC projects. Contractors who fail to complete projects on time through failure to employ sufficient resources, including labour, will normally be charged liquidated damages for late completion under the Conditions of Contract. The view of the Architectural Services Department is that a contractor currently tendering for a contract will be aware of the local labour situation before he tenders. In any case, if inability to attract labour were to be accepted as a valid reason for late completion, it would be difficult, if not impossible, to verify whether contractors had made every effort to attract labour at full market rates.
In conclusion the labour shortage is having an effect in increasing project costs but it is not at present causing significant delay to projects under construction.
MOTION
1.
MR. TONG KAM-BIU, VICE-CHAIRMAN OF THE ENVIRONMENTAL SELECT COMMITTEE, moved the following motion:-
'RESOLVED that the Places of Amusement (Urban Council) (Amendment) By-laws 1988 be made under section 92B of the Public Health and Municipal Services Ordinance, Cap. 132'.
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He said (in Cantonese): Mr. Chairman, as Vice-Chairman of the Environ-mental Hygiene Select Committee, I rise to move the motion in my name.
The Places of Amusement (Urban Council) (Amendment) By-laws, 1988 made under the Public Health and Municipal Services Ordinance, Chapter 132, now before the Council, when adopted, will exempt all billiard establishments with less than four billiard tables to take out a licence. Establishments with less than 4 billiard tables are considered not commercially viable and are therefore exempted from licensing control.
The purpose of these amendment bylaws is to enable the Authority to extend licensing control over public billiard saloons which are at present operating under the guise of private billiard clubs. This is necessary for the protection of public health and safety and to ensure that law and order are maintained in such premises. Upon enactment of these amendment bylaws, billiard establishments having 4 or more billiard tables will be given a grace period of 12 months to apply for and comply with requirements for the licences, or to wind up their business if their premises are unlicensable.
All the provisions now proposed have been carefully considered by the Environmental Hygiene Select Committee and the Standing Committee of the Whole Council, and I am satisfied that due weight has been given to all implications of the proposals.
Mr. Chairman, I beg to move.
MR. WALTER M. SULKE, MEMBER OF THE ENVIRONMENTAL HYGIENE SELECT COMMITTEE, seconded the motion (in English):-Mr. Chairman, I could now make a very long speech, but since we are all waiting for that bottle of champagne, you are so generously donating, I will just simply second the motion.
The question was put.
The motion was carried unanimously.
ADJOURNMENT—3.55 p.m.
CHAIRMAN (in English):—That concludes the business of today's meeting. The Council stands adjourned until Tuesday, 13 December 1988 at 2.30 p.m.
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