4 October 2004

Dear Fellow Engineers

Calling for government's actions to help the engineering profession

The construction sector including the engineering profession has been overshadowed by the persisting high unemployment since the Asian Financial Crisis in 1997. It is my strong conviction that the government has the responsibility to revive the industry which is one of the pillars of our economy. I have made strong representations to the government in the past 6 years and will continue to demand for more concrete measures from the government.

The Asian Financial Crisis in 1997 touched off one of the longest economic downturns in Hong Kong . The construction industry has been particularly hard-hit with the meltdown of the housing market. The substantial reduction in housing production in both the private and public sectors has accelerated following the debacle of government's annual housing production target of 85,000 units. Compounded by the negative equity, many practitioners in the construction industry have to face pay slash and even job cut.

Despite government's recent upbeat economic growth forecast of 7.5% for 2004, the jobless rate of the construction industry stays at 16.3% which is almost triple the overall unemployment of 6.8%. While our overall economy has benefited from the individual travel scheme of Mainland visitors, CEPA and the Pan-Pearl River Delta Regional Co-operation and Development Framework Agreement involving 9 provinces, HKSAR and Macau SAR, the construction industry is still at its doldrums. There are over 300,000 practitioners including professionals, technicians and workers in the industry. If we take into account of their family members, there are over 1 million people at stake. It is imperative for the government to implement more public works projects to create more jobs in the industry. The Financial Secretary should not simply give top priority to solving the deficit problem and not the pressing unemployment issue.

Seeing the seriousness of the problem, I established in 2000 on my own initiative and was elected as convenor of the Public Works Concern Group ( 關注公共建設聯席會議 ) which comprised 2 other legislators and 12 construction related organisations (interest groups, the largest construction labour union and professional bodies including HKIE) to join forces together to press the government to expedite implementation of its infrastructure projects and building works.

My speaking out for the engineering profession and the construction industry has obviously borne fruit. Instead of further cutting public expenditure in public works projects as suggested by some senior officials some 2 years ago, the government has agreed to increase infrastructure spending by 10% to 29 billion per annum for the next 5 years. It is very likely that the spending of the current year will increase to $33 billion. Many of these projects are in the construction stage. But we need projects in planning and design stages too.

The issue was raised by me at a recent meeting with the Chief Executive following my re-election in September. I asked him to dish out more Category B and Category C projects to ensure that there is a steady flow of works for the industry. Besides, I raised my concern about the slow progress in implementing his initiatives embodied in the paragraph 38 of the 2004 Policy Address. One of these initiatives is to reverse the policy as laid down in an internal government circular issued on 30 August 2002 by Secretary for Financial Services and the Treasury, Mr Frederick Ma Si-hang, calling for suspension and cancellation of some infrastructure projects and maintenance works and requiring all departments to find their own funding for recurrent expenditure of any project they intend to undertake.

At the same meeting, I strongly urged the Chief Executive to commence as soon as possible the 160 projects worth $20 billion previously undertaken by the two abolished municipal councils as these projects are related to the quality of life of the people in Hong Kong and can create many employment opportunities. In addition, I told him my belief that the proceeds of $26 billion from recent bond sales for the $20 billion and the securitisation of 5 tunnels and 1 bridge for 6 billion should be used to finance infrastructure projects other than or in addition to those totally $29 billion already earmarked. Doing so will maximise the impact on our economy. I advised him against using the monies so raised to finance the current deficit.

Despite the government's promise to extend its deadline for eliminating fiscal deficit for 2 years to 2008-9, unfortunately the original target for achieving balanced budge in 2006-7 seems to be more relevant to the government in practice. I asked Mr Tung to keep the government's promise by committing more spending in public works projects. The government should follow the examples of some foreign countries in increasing more public works projects during slowing economies with a view to creating more employment opportunities and saving construction costs.

I will continue to press the Executive-led government for more concrete measures to help the construction industry and the engineering profession.

Yours,

Ir Dr Raymond Ho Chung-tai