Public Works
Hong Kong should be very concerned about the recent flurry of cases involving misbehavior in the construction industry. It would be too easy to write them off as isolated incidents but they could just as easily be straws in the wind indicating a serious underlying malaise.
Most high profile in the past few weeks has been the case of the Anderson Road Quarry redevelopment being undertaken by CK Asset Holdings. The Independent Commission Against Corruption has arrested 10 suspects for allegedly paying or receiving bribes in connection with steel reinforcement work which may not have been carried out properly. The Buildings Department has now initiated no fewer than 205 prosecutions against six individuals and two companies.
The case is serious on at least two counts: it involves six residential towers providing nearly 3000 flats which would represent a major contribution to Hong Kong’s housing stock; and the project is being undertaken by one of the city’s largest and most experienced property developers. If even one of the best can be misled, what could be happening lower down the development ladder?
The other case to catch the eye recently involved questionably genuine building materials in the construction of East Tung Chung station by the Mass Transit Railway Corporation. Though of seeming lesser importance, the whole question of ensuring use of genuine products is a minefield all its own.
It should not be forgotten that the recently commissioned East Rail Cross Harbour Extension of the Shatin Central Link was itself the subject of an official enquiry chaired by former non-permanent Judge of the Court of Final Appeal Michael Hartmann to investigate questionable engineering. And I am surely not the only person to remember that the same judge chaired the Expert Panel investigating the delay in construction of the Express Rail Link.
Clearly Hong Kong is no stranger to problems in the construction sector.
These cases resonate with me because I was recruited to the Operations Department of the ICAC shortly after it was formed in 1974. My first posting was to a team devoted to cleaning up the old Public Works Department. Naturally corruption in the police force captured most of the headlines in those early days because it was pervasive and readily visible to the public at large and its existence was what had prompted then governor Sir Murray McLehose to act. After all if the very people responsible for upholding the law were the ones most blatantly breaching it, what chance would any community have?
But what we found in the public works sector was no less shocking and equally appalling. Virtually every major public works project contained a substantial corruption element. The chief engineer supervising the project would often receive a percentage of the total contract sum. Junior supervisory staff could expect to receive a brown envelope each month containing a cash sum equal to their official salary. We estimated that total corrupt payments added around 20 per cent to the cost of individual projects, and in some cases more. The extra cost was of course borne by the taxpayer.
Corruption on this scale has many drawbacks, most obviously that it pushes up the cost to the public because every contractor included the element for bribery in his tender price. But there could also be consequences for quality and especially safety. Once you have paid the supervisor to look the other way, there is nothing to deter the contractor from shaving other costs as well. The specification might call for 30 steel piles each of 40 metres in length, but who would object if there were only 20 and they were shorter ones? And who would know once the whole site had been covered with concrete? Such shoddy work could go undiscovered unless a major safety issue arose later which provoked a detailed and expensive investigation. Even then the cost of remedial works might be less than the sum saved, albeit there would be a loss of quality.
But once malpractice on such a scale, whether or not facilitated by corruption, has come to hold sway over an industry there are other pernicious effects. Gradually the bad contractors will drive out the good ones as the latter will find it increasingly difficult to compete. And engineers preparing designs might be tempted to compensate by over specifying. For example, if 10 reinforcement bars would do the job, and 12 would provide an adequate margin of safety, it might be necessary to require 15 so that when the inevitable shrinkage occurred, there would still be enough.
It is essential that Hong Kong not allow its construction sector to be captured by bad elements.
Another area of activity to hit the headlines recently was official procurement procedures. The Government Logistics Department, which includes a supplies purchasing unit, has partially cancelled a contract for supply of drinking water to government offices and two people have been arrested. It was a pleasant surprise for me to learn our civil ervants drink so much water. The Audit Commission is now conducting an investigation.
This case resonates with me also as many years ago as an officer In the Corruption Prevention Department of the ICAC I conducted studies designed to assist the then Government Supplies Department devise and operate clean purchasing procedures. The truth is such studies by themselves cannot prevent or eliminate opportunities for corruption. But what they can do is provide management information systems which make it easier to detect (and therefore deter) corrupt practices. To be effective, those supervising the systems must make full and diligent use of the safeguarding mechanisms.
There will always be individuals tempted to fiddle the system. Only vigilance can prevent them.