Chapter 7 : Striving for Productivity and Efficiency
7.1 As stakeholders' expectations of building quality are increasing, we need to improve construction techniques and operations progressively. As part of our move along this direction, we need to demonstrate how the industry and the HA can work together in realizing these objectives by addressing the following issues -
| (a) | Improved
buildability |
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| (b) | Integrated
production process |
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| (c) | Sub-contracting |
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| (d) | Construction
period and costs |
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| (e) | Departmental
reforms |
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| (f) | Environmental conservation |
Improved Buildability
7.2 To date, the construction industry is still a labour-intensive industry. As such, building quality is usually dependent on the input and quality of individual workers. Over the past decade, the HA has taken the lead in reducing this dependency through the wider use of standard block designs, precast facades, drywalls and standard building components. With these improvements, we can expect greater certainty in contractors' performance over time, cost and quality. In the years to come, the HA will continue to promote mechanization of the construction process through the wider use of system formwork and prefabricated building components.
7.3 Continued research and development is the key to quality improvements and production breakthroughs. For instance, with the HA's encourgement, some contractors have been using "jump lifts" Note 4 in construction sites to facilitate vertical transportation during construction and to enhance site safety and management. To promote research within the building industry, the HA will consider the following initiatives -
| (a) | Introduce
the concept of "Technology Leading to Total Quality" into
tender assessments. Tenderers who can innovate by providing
proposals to enhance buildability and quality will be given higher
technical scores during tender evaluation in recognition of their
positive contribution. |
|
| (b) | Establish an
annual Excellence Award Scheme to recognize the contributions of new
building innovations. We will consider sharing the productivity
gains with innovators on more efficient building methods and better
building materials. |
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| (c) | Set up an HA
Research Fund to encourage and assist research. Initially, we shall
set aside $20 million for this purpose in the first year. Tertiary
institutes and the industry can better explore and develop new
construction methods, technologies and materials under this fund. |
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| (d) | Draw up a
systematic research plan by the HD annually to identify major study
areas. |
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| (e) | Facilitate
the wider use of information technology in the construction
industry. |
| Note 4 | "Jump lifts" are passengers/materials transportation system at construction stage using the permanent lift shaft as the temporary support while the superstructure works progress. |
Integrated Production Process
7.4 At present, the building process in Hong Kong is too fragmented and there is insufficient experience-sharing amongst architects, engineers, contractors, workers and suppliers. As quality buildings require a harmonious integration of the upstream design and downstream construction processes, we must ensure that a more integrated production process is developed. If contractors and suppliers cannot adjust their building processes, methods and components correspondingly, good building designs may not necessarily turn out to be quality products.
7.5 The promotion of a partnering spirit amongst stakeholders and the conduct of various partnering conferences and workshops will help us to bring stakeholders closer together. To assist in the development of an integrated production process, the HA will -
| (a) | consider
launching a pilot "design-and-build" building project.
The project should serve as a model to enhance the buildability of
public housing and engender a better team spirit amongst
stakeholders. |
|
| (b) | facilitate
the wider use of "non-standard" building designs to
make the best use of consultants' expertise and to enrich the
variety of public housing. |
|
| (c) | conduct
regular workshops with contractors, consultants, suppliers,
academics and professionals to explore new means to facilitate the
integration of construction process and to enhance buildability. |
|
| (d) | review
the operation of the "Nominated Sub-contracting System"
for improving production efficiency. At present, the HA adopts a
Nominated Sub-contracting System in which main contractors have to
engage building services sub-contractors on our approved lists to
install specialist items. Concern has been expressed that the
present system may lead to segmentization of the construction
process and contractual interface problems. In the private sector,
main contractors have the freedom to choose other professional
sub-contractors. As part of fostering a partnering spirit and
construction productivity, we will review the need for this system
and other alternative arrangements. |
|
| (e) | launch a
consultancy study to examine how our procurement policy in building
materials and components can optimize the life-cycle costs of
buildings. Apart from considering the value-for-money of
building components at the development stage, we will also consider
actively their long-term implications on management and maintenance.
We need to do more to secure long-term durability and ease of
maintenance for our clients. |
|
| (f) | provide
greater flexibility to contractors over the use of building
materials by widening the choices under our approved lists of
building materials and allowing them to propose alternatives. We
will review our approved lists of materials annually to ensure that
they reflect the latest market trends and new products. |
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| (g) | review the relative merits of appointing architect-led consultants over direct appointment of specialist consultants. At present, where consultants assume the contract managers' role, we expect the architects to line up other professional consultants e.g. engineers and surveyors to deliver the work. This approach achieves one-stop service and provides a clear line of responsibility. Nevertheless, we have received suggestions that direct appointment of individual consultants by the HA may enable different disciplines to share experience more fruitfully. We shall review the current system and explore the feasibility of increasing the use of direct employment of consultants for major projects. In the meantime, we will review the performance appraisal system for sub-consultants to ensure that their performance is assessed objectively by the HD. |
Sub-contracting
7.6 Given the complexity and wide coverage of building projects, some degree of sub-contracting is unavoidable. Main contractors have to engage specialist sub-contractors to assist them in the delivery of projects. Sub-contracting also provides a flexible means of meeting fluctuating workload and maximizing the utilisation of expertise in the industry.
7.7 While recognizing the need for the sub-contracting system, we notice that some unscrupulous main contractors and sub-contractors have assigned their entire jobs to others. They act as little more than brokers. This kind of unrestrained multi-layered sub-contracting activity has given rise to two main problems -
| (a) | Main
contractors have lost control over the quality and progress of works
by sub-contractors. |
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| (b) | Because of the profiteering activities in-between different contractors, the final delivery agents have to work on unrealistically low budgets and are hence tempted to cut corners. |
7.8 The HA recognizes that some degree of sub-contracting is necessary but does not allow total assignment of works under existing contractual provisions. We also recognize that the problem of multi-layered sub-contracting cannot be resolved easily. Hence, we will expect the Government and the industry to address the issue jointly. From the HA's viewpoint, we will -
| (a) | support
the formation of an Organized Specialist Sub-contractors System
which aims to provide a consolidated list of capable
sub-contractors. We appreciate work already done by the HKCA, CITA
and REDA on this new initiative. By confining sub-contracting to
contractors with long-term commitments in the businesses, good
knowledge of the trade and direct workers, we can restrain
multi-layered sub-contracting and enhance the overall quality of
contractors. |
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| (b) | require
main contractors to submit a list of sub-contractors at all levels
to us under the Quality Supervision Plans for reference. This
will give us a clearer understanding on the delivery of work. |
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| (c) | promote the use of contract workers in core trades through contract provisions and better tendering opportunities. Wider use of contract workers will help to constrain multi-layered sub-contracting to some extent. |
Construction Period and Costs
7.9 Although there is a strong and urgent demand for public housing, we will not sacrifice building quality simply to meet production targets. At present, the normal construction period of building contracts is around 26 months. We fully appreciate that the more stringent environmental and site safety standards introduced in recent years, together with our increasing emphasis on quality supervision may require lengthening of the works period.
7.10 To allow sufficient time for contractors to deliver quality housing under our new initiatives, we will consider extending the normal construction period for new piling and building contracts by 1 and 2 months respectively. In the long run, we believe that process re-engineering and new technological innovations will help to reduce construction period progressively. With a steady and sufficient land supply, there is no need to force the pace. We are confident that the proposed revision of contract periods will not affect our ability to achieve our various public housing pledges, including the reduction of waiting time for public rental housing.
7.11 At present, Hong Kong's building costs are amongst the highest in developed countries. Why this should be so is not clear. It may be related to our building designs, specifications, methods of construction or a number of other factors. With the increasing emphasis on building quality and the revision of the tendering system to focus more on technical performance, tender prices may increase further in the short run. However, we strongly believe with the successful implementation of the reforms, the productivity and efficiency of the industry will increase. Improvement in buildability, reduction in non-valued-added sub-contracting activities, emergence of a professional workforce should all help to drive down construction costs progressively.
7.12 In order to better ascertain the reasons for our relatively high construction costs, we will commission a consultancy study to analyse the causes for the relatively high construction costs for residential developments. The study will also look into the construction costs of multi-storey residential buildings in selected foreign countries to provide comparative studies for our analysis.
Departmental Reform
7.13 Within the HD's Development and Construction (D&C) Branch, there are three Project Divisions, each headed by a Project Director, undertaking both project management and contract management functions. The central service and support function is undertaken by the Development Division. This system has functioned well in securing the housing production targets. However, the overlapping roles and responsibilities under the current system, together with recent quality problems in construction, have prompted the need to review the current set-up. To re-inforce our partnering with other stakeholders, the HD will reform the operations of the D&C Branch -
| (a) | re-organize
the D&C Branch into three core functional lines : research
and development, project management and regulatory control for
achieving better check-and-balance. |
|
| (b) | re-inforce
the emphasis on reviewing building designs and requirements by
deploying experienced and appropriate staff to undertake the reviews
and related researches. |
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| (c) | strengthen
project management so that Project Directors will have direct
responsibility of controlling quality, budget and programming. Under
each Project Director, there will be a clear functional structure
with easily identified contact points in planning, design, contract
management and consultant management to enable consultants and
contractors to secure our guidance and assistance. The roles and
responsibilities of different units will be clearly defined. |
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| (d) | streamline
decision-making by further delegation of authority and staff
empowerment. Directorate staff can focus more on strategic
policy development and implementation. We shall streamline
procedures for reducing unnecessary paper work. |
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| (e) | strengthen
the leadership of site inspection teams by deploying resident
professionals to take on management and decision-making
responsibilities on site in assuring building quality. |
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| (f) | strengthen
the vetting and audit functions by establishing the Regulatory
Control Division, which would provide third-party monitoring
independent from project management. |
7.14 With a more efficient and responsive organizational culture and practice, the HD should be well placed to establish partnerships with other stakeholders in the delivery of quality housing.
Environmental Conservation
7.15 Apart from providing quality housing, the HA is also committed to maintaining a sustainable and quality environment. As enshrined in its Environmental Policy Statement endorsed in July 1999, the HA will continually strive to improving environmental standards in the provision of public housing and related services.
7.16 Throughout the years, the HA has taken a pro-active role in reducing waste generated from construction activities. For instance, the use of large panel metal formwork in building works since 1985 has achieved an estimated saving of 783,300 metric tonnes of timber. Through our giant share in the construction market and our procurement policy, we have induced our contractors to put greater emphasis on environmental conservation.
7.17 To further demonstrate our commitment to conserve the environment and to respond to the Government's call for making Hong Kong an ideal home, we will plan for a pilot "Green Estate" where the concept of sustainable development will be developed. This environmental-friendly estate will comprise unique initiatives in design, waste treatment, anti-pollution and energy conservation. We will liaise with relevant government departments and environmental concern groups to develop this new concept. We intend to try out this demonstration project in an urban housing site to demonstrate the feasibility of developing such a quality estate within the city.
7.18 In addition, the HA has been working on a number of environmental initiatives. We will -
| (a) | pursue
more environmental-friendly buildings under the HK-BEAM
(Residential). HK-BEAM is a system for environmental rating of
new and existing buildings through the design and construction
processes. The HA has assisted in the development of a new version
for residential buildings. The pilot assessment trials on HA
buildings commenced in December 1999. |
|
| (b) | reduce
waste arising from the decoration of new flats by providing
different levels of fitting-out. For new sale flats, we are
exploring the feasibility of providing three standards of
fitting-out for purchasers' selection, i.e. basic, standard and
enhanced, to better meet the needs and preferences of individual
owners. |
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| (c) | improve
the cleanliness of new estates through the installation of the
Automated Refuse Collection System for new housing projects to
be completed after 2001. |
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| (d) | consider extending the Waste Management Plan to cover building and piling contracts. For civil and demolition works, contractors have been required to sort out inert and non-inert materials and breakdown large debris for proper disposal or re-use. |
7.19 With a renewed emphasis by the industry on research and an integrated production process, we are confident that evolving new building designs and methods will enable us to meet both new challenges and customers' expectations. In the long run, we can achieve shorter construction periods, lower costs, higher quality and environmental-friendly buildings.
2001 Housing Authority. All rights reserved.