Tang Report 2001“Construct for Excellence”

Background

Sub-standard foundation works in several public housing developments in 1999

• The Secretary for Housing, Planning & Lands claims the incidents were “caused by criminal acts of contractors' and consultants‘, dishonest staff members, shortcomings in the HD’s project-management systems and malpractices in the industry.” Jan 22, 2003

Background (2)

Industry problems• Non-value adding multi-layered subcontracting• Highly fragmented with adversarial culture • Labour-intensive construction methods• Inadequately trained workforce• Time, cost, quality not satisfied• High site accident rate

Depressed Economy

Industry’s role in HK

• Since 1990’s, 5-6% of GDP

• HKHA is the largest developer providing housing for almost 50% of residents

• In 1999, 1 in 10 employed in the industry

Overseas

• Egan Report (UK) 1998

• C21 (Singapore) Report 1999

• Building for Growth (Australia) 1999

• White Paper (South Africa) 1999

CIRC

• April 2000• Led by Hon. Henry Tang to examine the

construction industry and propose a way forward

• 9 month consultation• Main committee, 3 Sub-committees and 1

Working Group • CIRC held 10 meetings• 33 meetings held by S-committee and WG

C21 Committee (Singapore)

• May 1998

• Led by Secretary for Manpower to examine industry and workforce

• 15 month consultation

• Steering Committee, Working Committee, 4 Working Groups; 11 meetings by SC

• Study missions to Japan and HK

• Advice from Egan (UK)

CIRC membership

Main committee

• 8 public and 8 private sector members

Sub-committees

• Gov’t bureaux and depts

• Professional institutions

• Trade associations

C21 membership (Singapore)

Steering Committee• 28 members; 2/5 private and 3/5 public

sector membersWorking Groups• Regulatory bodies• Professional institutions• Trade associations and unions• Members of Parliament

CIRC’s vision

“To develop an integrated construction industry that is capable of continuous improvement towards excellence in a market-driven environment.”

C21’s vision (Singapore)

“To be a world class builder in the knowledge age.”

Key Issues

• Quality culture

• Value in construction procurement

• Professional workforce

• Efficiency, innovation and productivity

• Safety and environmental performance

• Institutional framework

Quality culture

• Proactive client

• Voluntary subcontractor registration scheme

• Site supervision

• HKHA projects subject to the Buildings Ordinance

Quality in C21

• Enhancing buildability

• CONQUAS 21, a measure of quality

• R&D under the Nat’l Construction Research Institute (NCRI)

• Generic construction management system

• Minimize modifications to contracts

Value in procurement

• Cost and quality performance considerations in selection of project team

• Partnering and alignment of interests

• Equitable allocation of risk in contracts

• Payment systems

Procurement in C21

• Greater integration

• Design and Build

• D&B friendly environment

Professional workforce

• ‘Soft’ skills and multi-disciplinary approach for new professionals

• CPD courses a pre-requisite for professional membership renewal

• Formalized training for supervisory level staff

• Registration scheme for workers

• Use of direct labour

Professionalism in C21

• Multi-disciplinary approach for new professionals

• Continuing education / CPD programs

• COP and COC for all participants

• Contractor licensing scheme

Future direction

• 109 recommendations

• Clients to lead

• Compete with leading firms

• Evaluate the progress in 3 yrs time

HKHA “Partnering for Change”

• 40 recommendations

PCICB

• Sept 2001 establishment of Provisional Construction Industry Co-ordination Board

• Facilitate the reforms in the CIRC Report

• Led by M.D. of Swire Properties Ltd.

• 20 members (industry stakeholders)

• 5 Working Groups

• 10 meetings

PCICB (2)

• Develop a framework for Construction Industry Council (CIC)

• Progress reports on the CIRC recommendations (tender assessments on a 40/60 weighting on quality/cost)

• Consultation documents on the legal framework of the CIC and operational framework of the voluntary S/C registration scheme

Remarks

• Cost of these reforms?

• Concensus about the direction?

• Prescriptive

• Tang Report reiterates issues from Egan Report

• Recommendations met

• Measure success?