CE receives CIRC report ***********************
The Chairman of the Construction Industry Review Committee (CIRC), Mr Henry Tang, submitted a report containing the Committee's findings and recommendations to the Chief Executive, Mr Tung Chee Hwa, at noon today (January 18).
In April last year, the CE appointed the CIRC under the chairmanship of Mr Tang.
The committee is responsible for examining the current state of the industry in respect of quality, quantity, environmental friendliness, manpower, safety and supervision.
It is also charged with the job of identifying ways to improve the efficiency and cost- effectiveness of local construction in terms of quality, customer satisfaction, timeliness in delivery and value for money. It also advises on an order of priority for implementation.
A Government spokesman said the Administration, the industry itself and the community at large had a shared interest in the successful operation of the construction industry. The spokesman also said the Government, the industry itself and the
"An efficient, competitive and quality construction industry plays a key role in the continuous social and economic development of Hong Kong," the spokesman said.
The spokesman also said the Government was committed to working with the industry to facilitate the development of a healthy and reliable construction industry. That is, an industry that is capable of delivering construction works on time, at competitive cost, of high quality, with enhanced customer satisfaction, and in a safe and environmentally friendly manner.
Members of the public who are interested in studying the report can visit the Government website.
End/Thursday, January 18, 2001 NNNN
Construct for Excellence
Report of the Construction Industry Review Committee
January 2001
Contents
Page
Executive Summary 1
Chapter 1 : Introduction 15
Chapter 2 : The Construction Industry Today 19
Chapter 3 : Vision for Growth and Development 29
Chapter 4 : Fostering a Quality Culture 34
Chapter 5 : Achieving Value in Construction Procurement 52
Chapter 6 : Nurturing a Professional Workforce 86
Chapter 7 : An Efficient, Innovative and Productive Industry 101
Chapter 8 : A Safer Workplace and an Environmentally 125 Responsible Industry
Chapter 9 : Institutional Framework for Implementing the 151 Change Programme
Chapter 10 : Priorities of Implementation 158
Page
Annex
A : Terms of Reference of the Construction Industry 196 Review Committee
B : Membership of the Construction Industry Review 197 Committee
C : Membership of the – Construction Quality and Safety 199 Sub-committee – Manpower and Modernisation Sub-committee 200 – Construction Cost and Environment 201 Sub-committee – Working Group on Use of IT in Construction 202
D : Model Project Pact 203
E : Key Features of the Construction Worker 204 Registration Scheme as proposed by the Construction Advisory Board (Position as at December 2000)
F : Methodology Adopted by the Labour Department 206 for Calculating the Construction Site Accident Rate
G : Proposed Co-ordination Framework for Local 207 Construction
Executive Summary
Background
The construction industry has over the years produced numerous examples of outstanding architecture and engineering excellence. It has collectively contributed to the remarkable social and economic transformation of our society. But there is room for improvement in its overall performance in terms of quality, efficiency, productivity, site safety, environmental sustainability and customer satisfaction. The recent spate of non-compliant construction incidents has prompted widespread public concern about the need for reforming the industry. In April 2000, the Chief Executive of the Hong Kong Special Administrative Region appointed the Construction Industry Review Committee to comprehensively review the current state of the industry and to recommend improvement measures.
The construction industry today
2. The construction industry is one of the main pillars of Hong Kong’s economy. In 1999, it accounted for 5.6% of the GDP and 40% of gross domestic fixed capital formation. 9.2% of our workforce was employed by the construction industry in that year. There are, however, a number of shortcomings in the industry’s operations and in the quality of its products. Local construction activities are labour-intensive, dangerous and polluting. Built products are seldom defect-free. Construction costs are comparatively high. The industry is very fragmented and is beset with an adversarial culture. Many industry participants adopt a short-term view on business development, with little interest in enhancing their long-term competitiveness. There is a tendency to award contracts to the lowest bidders and delivery programmes are often unrealistically compressed. Accountability is undermined by the prevalence of non-value adding multi-layered subcontracting and lax supervision. An inadequately trained workforce also impairs the industry’s ability to adopt new technologies and to cope with new challenges.
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Vision for growth and development
3. To achieve a step improvement in its overall performance, the construction industry needs to develop a new culture that focuses on delivering better value to the customers on a continuous basis. We have a vision of an integrated construction industry that is capable of continuous improvement towards excellence in a market-driven environment.
4. We advocate an integrated approach to construction with an emphasis on teamwork in order to achieve the best project outcomes. Thorough consideration must be given to all relevant factors, such as buildability, site safety and environmental performance, at the planning and design stages to facilitate downstream activities. In support of this development, it is necessary for construction personnel at all levels to acquire a broader knowledge base and for service providers to improve their technical and management capabilities.
5. We urge the construction industry to seek continuous performance improvement instead of just meeting the minimum requirements set by the clients and regulatory authorities. To this end, the construction workforce will need to build up its expertise and keep abreast of the latest developments in the industry through continuous education and development. Industry participants will need to foster strategic relationships with their business partners to enable the team to achieve improved efficiency and productivity over time. Sharing of learning and knowledge within the industry should also be encouraged. We feel strongly that the change programme for the construction industry should be driven by market forces as far as possible. In this regard, clients, in particular public sector clients, play a critical role in driving the construction industry to improve its operations through quality-oriented procurement strategies and contractual requirements.
6. In addition to advocating greater integration across disciplines and processes along the construction value chain, we recommend a package of improvement measures covering the following areas to transform the construction industry –
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