Industry Survey
ARE THERE ENOUGH
CONSTRUCTION COMPANIES
TO KEEP PACE WITH DEMAND?
Concern has been expressed within Hongkong's construction industry that, in the near future, there may not be enough contractors of certain grades to work on some of the major construction projects currently in the pipeline.
Since the slump in the industry in the mid-1980's, major contractors, that is Class 'C' contractors, are said to be experiencing one of the busiest periods ever in Hongkong, as property is now probably the most favoured area of investment.
As demand for prime quality office and residential buildings has risen sharply and the Government is engaged in a number of major construction projects, building con- tractors are scrambling to keep up with the increased requirements of property developers.
There are hundreds of construction companies and firms in business in Hongkong, but only a few are considered to be capable off taking on large projects and completing them with the necessary degree of professionalism.
With the property market booming in the private sector and the Government committing large sums of cash to various construction projects, top level contractors are reported to be finding themselves with their hands full.
The current labour shortage, which is being felt acutely by the construction industry, has restricted the capacity of companies to expand the number of projects which they could, normally, have handled at any one time.
Although sources in the industry say that they have tried to limit the problem by introducing labour-saving tech- niques, the construction business still remains, and probably will always remain, dependent on manpower for a consider- able proportion of required work.
The Government Sector
The number of contractors which are able to complete
25
work for the Government is restricted by a kind of licensing procedure, whereby companies are assessed on their finan- cial and technical capacity, as well as their track record, and, if they meet the necessary requirements, they are put on the 'gazetted list' of Government-approved contractors.
It has been suggested that there may not be sufficient numbers of 'Group C' contractors to compete for major Government projects.
Group C contractors are those which are able to submit tender proposals for any number of Government projects for an unlimited amount of money, as opposed to Group B contractors which can only submit proposals for projects with a total budget of $HK15 million or less.
According to the Government, there are currently 53 Group C Contractors on List I and 62 contractors on List II. All of these 115 contractors enjoy a Group C status.
Since June 1984, 67 contractors of the 115 contractors in the Group C bracket have been awarded contracts.
In 1985, 85 Group C contracts were let with a total value of $HK3.72 billion. In 1986, there were 68 contracts let with
a total value of $HK3.5 billion. And in 1987, 77 contracts with
a value of $HK4.06 billion were let.
The Government told TARGET: 'Currently there are sufficient numbers of approved contractors to ensure that sufficient, competitive tenders are received for works con-
tracts.
"There is, at present, no shortage of Government-ap- proved Contractors in general.
'A criterion for (such) a shortage would be, if there were insufficient competitive tenders for the majority of con-
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