Professional Documents
Culture Documents
1. The opening of the new Hong Kong International Airport in July 1998 marked
the completion of the Airport Core Programme (ACP). The total capital cost
exceeded HK$160 billion (US$ 20.6 billion at the current exchange rate of
US$1 = HK$ 7.75), making the ACP one of the largest infrastructure projects
ever. The airport was the central project in the 10-project ACP, commenced in
1991 on the basis of feasibility studies going back to the early 1980's. The
ACP also included extensive road and rail infrastructure and a new town.
2. Seven of the ACP projects - involving the formation of new land and the
construction of highways and bridges and a new town - were funded and
carried out by the Government of Hong Kong as direct capital works.
3. The Airport Authority (AA) was responsible for developing the new airport,
and the Mass Transit Railway Corporation (MTRC) built the airport railway.
Both are statutory bodies owned by the Government. The private sector
Western Harbour Crossing Company built the new cross-harbor tunnel under a
30 year "Build, Operate and Transfer" franchise.
4. Implementation of the ACP projects was overseen by the Government's New
Airport Projects Co-ordination Office (NAPCO) operating under the auspices
of the Works Bureau. NAPCO provided overall project management services
in coordinating project implementation and interfacing. NAPCO reported
directly to the Airport Development Steering Committee which had overall
responsibility for guiding the implementation of the ACP.
5. The timing of the ACP was particularly sensitive as it was largely
implemented in the run up to Hong Kong 's reversion to China in July 1997.
6. From all appearances, the ACP has been implemented largely within budget
and with a minimum of corruption. Apart from very minor corruption cases,
only one significant case has been reported in the press relating to non-ACP
work - bribery in connection with substandard foundation work in connection
with property development adjacent to the Airport Railway's Hong Kong
Station which was a joint venture between the MTRC and a developer and was
not part of the ACP.
The ACP
and
monitoring
of
the
to/by Civil (Crown) Servants with no link to any official act by the
Civil Servant required,
to/by "agents" (any person employed by, or acting for another, i.e.
including private-to-private bribery), or
"Advantage" is very broadly defined and includes gifts, loans, loan release or
discharge, employment, contract or any favor or service. Curiously,
"entertainment" is allowed provided it is not excessive.
11. For a Civil (Crown) Servant, the "possession of unexplained property"
demonstrated by maintaining a standard of living above that which is
commensurate with his past or present official emoluments or by being in
control of pecuniary resources or property disproportionate to his official
income is a crime "unless he gives a satisfactory explanation as to the source
of his wealth". This reversal of the normal burden of proof has been quite
effective but remains somewhat controversial among lawyers and civil
liberties activists.
12. The giver and taker of bribes are considered equally guilty. In case of a
"conspiracy in committing any such acts", all participants are treated like the
principal perpetrator.
13. The penalty for such offenses is prison for up to ten years plus a fine plus
confiscation of the "unexplained" assets and (optionally) the prohibition of
25. The Highways Department, when selecting consultants (e.g. for design work),
starts with a long list of firms with the appropriate expertise and invites
expression of interest from those firms with a project brief. The Department
allows foreign firms to enter into joint ventures with local firms. The
Highways Department will then form an Assessment Panel, with members
from different departments, and ask the members to mark the submissions
(without disclosing them to the other members) and send their result to the
Chairman. At the Panel meeting three to four firms are selected for the short
list; detailed minutes are kept of the Panel proceedings. All departments
prepare semi-annual reports on the performance of all consultant firms; these
reports are kept centrally and are accessible to all departments.
26. Consultancy proposals are then invited from the short list on the basis of two
envelopes - technical and price. Normally the technical proposal will have a
weight of 60%, the financial 40%. For technically complicated proposals, the
weighting may be 80/20. (The mission heard the view that a weighting of
as a central objective.
33. The Mass Transit Railway Corporation (MTRC), a public body with very
significant investment activity, asks of its contractors interested in joining its
"approved list" some detailed information on previous projects carried out by
the applicant, namely on
o
On the other hand, the MTRC contractor selection process does not have a
formal reference to bribery or integrity, but MTRC inquires about probity
issues during the interview and feels that integrity issues would come out
during the discussion. MTRC conducts regular integrity and bribery awareness
sessions with its own staff as well as with contractors. There is a reference to
anti-corruption in the MTRC code of conduct.
34. MTRC also employs a Post Tender Price Adjustment Procedure (a form of
limited negotiation), in order "to get the best value for money". These
negotiations are conducted with the shortlisted tenderers only in the presence
of a team of Senior Officials, and full records are kept.
35. The MTRC invites a limited number of bidders for individual contracts. The
MTRC will limit the number of contracts won by a single contractor. It will
also try to achieve a national spread among its contractors, so as to contain the
risk.
36. The Highways Department uses the Government's Central Tender Board for
any contract above a value of HK$ 10 million (US$ 1.3 million equivalent),
comprising officials from the Works and Finance Bureaus as well as other
officials. This Department also limits the number of firms which it invites to
submit tenders. It considers tendering too costly both for the project owner and
the tenderer to ask other than the most likely winners to go through the process
of preparing the tender documents.
37. The Airport Authority (AA) works under the watchful eyes of the Airport
Consultative Committee made up of competent people including appointed
legislators. It has a watching function over technical, financial and legal
matters. The AA is headed by a Board the members of which are appointed by
the Chief Executive of the Government of Hong Kong.
38. The AA employs a selection process which allows full competition. Its
standard contract form was developed in conjunction with ICAC and the Hong
Kong Contractors Association. The selection of contractors follows a five step
procedure:
o
it starts with Group C - the Evaluation Task Force, staffed from the
controls, construction, engineering, planning & scheduling, quality
control, finance and legal departments; Group C reports to
Group A - the Peer Review Group, which comprises the CEO, the
Project and Finance Directors, and coopted Directors, as needed, which
endorses the Group B report and submits it to the
39. Normally the selection of contractors by the AA goes through two rounds: in
the first (technical only) round, 8 -10 bidders are invited to participate; the 3 or
4 best in this group are then asked to submit a full technical and financial bid.
40. All agencies appear to allow "non-conforming alternative bids" (provided they
accompany a "conforming bid"), even though they deal differently with them.
The AA will consider such alternatives and, if it sees merit in any of them, will
give all bidders a chance to bid on the alternative design as well. The
Highways Department, if it sees merit, will not give other bidders the
opportunity to bid on it.
41. The criteria for the evaluation of consultant, contractor and supplier proposals
are made public and thus are fully transparent. Equally, tenders to be issued
over the forthcoming 9 months or so are published on the Web and in the
Official Gazette.
42. Since Hong Kong applies the WTO-GPA, any company worldwide can ask for
tender invitations, whether it is on the "approved list" or not, but it will then
have to go through the inquiry/prequalification process to demonstrate its
technical and financial
competence.
Contract Implementation
43. To deal with integrity and bribery issues during contract implementation, the
Government provides for
o
48. The AA also has a complex process for change orders. A Divisional Review
Committee of senior line managers will have to give Contract Change
Authorization (CCA), Budget Change (BCA) or Expenditure Change
Authorization (ECA). A CCA will involve design, construction and contract
engineers, the Project Manager, the Project Control Manager and the Project
Director. All in all, up to 17 signatures are required before a change order can
be approved. If the change exceeds a value of HK$ 5 million (US$ 650.000
equivalent), even the CEO has to sign off.
49. In general government matters, change orders within the terms of the contract
up to HK$ 300 000 (US$ 40.000 equivalent) can be approved by the
consultant engineer, everything above requires approval by the Department:
o
If outside the terms of the contract, then changes at < HK$ 3 million (US$
390.000 equivalent) can be approved with legal advice, anything beyond
requires the approval of the Secretary of the Treasury.
Other Implementation Issues
50. One instrument employed by government to assure quality implementation is
Quality Control Testing, normally by an independent organization. In this
regard, the contract may contain a probity clause which specifically prohibits
inappropriate handling of samples and disclosure of information. Good test
management would also focus on the avoidance of corruption through staff
rotation, regular audits and suitable conflict of interest provisions.
51. On a selective basis (technically complex projects or BOT projects, or in the
presence of safety concerns), the Government employs "independent
checking engineers" to obtain an independent quality check of project
implementation. In the case of BOTs, the "independent checker" is paid by the
franchise holder, but he is responsible to the Government as well as to the
franchise holder. While this was not the case with the West Harbour Crossing,
an independent design and works checker was employed. The task here can
include a technical audit of project supervision ( test records, site observation,
approval of and compliance with control procedures) and an audit of the