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Hong Kong | Challenges ahead

Hong Kong Night Skyline 23

Hong Kong is on a new drive to attract UK consultant and contractor expertise in a bid to push delivery and cost management of its future infrastructure plans.

The call comes as the Special Administrative Region pushes hard to deliver bold housing development projects and infrastructure schemes.

Hong Kong chief secretary for administration Carrie Lam set out the scale of the challenge to an audience at a recent event held at the ICE. Uppermost in her thoughts was the desire to see improvements in the country’s ability to deliver complex but much needed buildings and infrastructure on time, while also building sustainably and with great innovation from contractors. There is a secure pipeline of funding ahead, but the region has difficulty in relying on the ability of projects to be delivered without incident.

“We have challenges,” she explained. “The first challenge is high construction costs.

West Kowloon Terminus

West Kowloon Terminus

Hong Kong’s West Kowloon Terminus – delivered late (currently under construction).

 

“The fact is in the last few years, we have had major cost overruns in some of the high profile projects. So the reputation, the image of the government engineers is not very good.”

Anecdotal as well as formal evidence is now all too prevalent.

How the country’s infrastructure supports its economic progress is critical. Connectivity with mainland China is one of the most explicit examples of this. Almost 600,000 land passenger trips are made daily at the six land border crossings – two rail, four road – and there is more to come.

There will be few in the industry who have not heard of the 42km long Hong Kong-Zhuhai-Macao bridge, which is expected to be complete in the next year or so, but which has been struck by delays.

We try to create more room for contractors to come back to us with creativity and innovation instead of just complying with the specifications set by our own government engineers.

Hong Kong chief secretary for administration Carrie Lam

 

The Guangzhou Shenzhen Hong Kong Express Rail Link is also well talked about. This scheme has been “haunted” by complications, said Lam. “[The scheme is] very difficult to build, with very unpredictable ground conditions at West Kowloon terminus and very sophisticated architectural design, which is costing us a lot,” she added.

“The latest indication is that it will not be ready until late 2018 – which is a delay of two to three years – and very costly. We have already got extra funding from the Legislative Council and we have pledged that we will not allow the cost to overrun anymore.”

Lam described the complexity of the curving structure that forms the entrance to the terminus deep underground as particularly costly. “That’s why my chief executive said ’next time you want to build any more things like this, don’t entrust it to an architect, give it to an engineer. They come up with all these flowery things which are beautiful to look at but extremely costly to build.’”

West Kowloon terminus

West Kowloon terminus

West Kowloon will form the terminus of the Hong Kong Section of Guangzhou–Shenzhen–Hong Kong Express Rail Link.

 

“Every time [government engineers] go to the Legislative Council to ask for more funding they are being criticised and abused and humiliated. So we must in concert try to address these high construction costs.”

Those costs were now “really the highest” against the world standard, Lam added, before relaying a tale where a developer explained to her that it was “now more expensive to build a hotel in Hong Kong than in Tokyo”.

But Lam was also eager to emphasise that these same challenges now present great opportunities for engineers.

“We need the help of consultants and contractors with strengths in project management and also to review some of the specifications in some of the major projects,” she urged.

Hong Kong wants to do more, and to lead the green building movement.

Hong Kong chief secretary for administration Carrie Lam

And it is not just a case of calling on engineers’ now well established project management expertise. Hong Kong is keen to explore paths less well trodden. “One way to help with these challenges is if we go for more innovation, that is more creative ways of doing things,” explained Lam.

“We try to create more room for contractors to come back to us with creativity and innovation instead of just complying with the specifications set by our own government engineers.”

The wins can be big for those willing to push the boundaries. Infrastructure investment in Hong Kong has seen a fourfold increase over the last decade, and is set to keep rising. “There is very little worry that infrastructure investment will come down or there will be no jobs for engineers and contractors,” Lam observed.

And the wins are not limited to Hong Kong. “Looking beyond Hong Kong there are plenty of opportunities for businesses and professionals, including businesses and professionals in the construction industry,” said Lam. “We are a gateway for mainland China and a platform for mainland enterprises to go overseas.”

 

 

Infrastructure priorities

Hong kong's third runway

Hong Kong’s third runway

Source: HOK

Hong Kong’s plan for a new £14bn third runway on 650ha of reclaimed land

Housing

Less than a quarter (24%) of Hong Kong’s 1,100km² land mass has been developed, but challenges lie ahead. More and more development will be required in Green Belt land, which Lam says, “is going to prove more and more difficult”. Land reclamation also holds promise. “There is a big potential reclamation called the East Lantau metropolis,” explained Lam. “In other words we want to reclaim a whole artificial island to provide housing and jobs for up to 1M people. All of these have to be supported by very good transport infrastructure.

Rail

The Railway Development Strategy 2014 builds on its 2000 predecessor and will increase the Hong Kong rail network from 270km to 300km by 2031. The new projects “are not very lengthy but they are what we call very important missing pieces” for the network, according to Lam.

Aviation

Lam describes the new £14bn third runway on 650ha of reclaimed land at Chek Lap Kok as the “most important piece of infrastructure” in aviation. Construction of the eight year project kicked off on 1 August.

Ageing population

Earlier this year, Hong Kong announced a £21bn, 10 year hospital development programme to help accommodate its ageing population. Lam also explained Hong Kong must be built to be “more elderly friendly” with more elevated walkways, footbridges, hillside escalators, to ensure people remain more mobile as they age.

Greening the future

“Hong Kong wants to do more, and to lead the green building movement,” according to Lam, with the government aiming to stipulate gold or above BEAM (building environment assessment method) ratings for all its building projects.

 

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