When it comes to public works, the forum's theme - cultivating cost-consciousness - is Hong Kong's theme: today and tomorrow. And for good reason.
Infrastructure and the construction industry have long played critical roles in the economic development of Hong Kong. And I can tell you they will also be essential to our post-pandemic economic revival.
Up to last week, the Legislative Council Public Works Subcommittee endorsed around $200 billion for some 80 new capital works projects. Subject to the approval from the LegCo Finance Committee, that amounts to a record-high funding for new public projects within a single Legislative Council session. A fine start, I would say.
In the next few years, our annual capital works expenditure will exceed $100 billion.
Coupled with private development projects, Hong Kong's overall construction volume will increase to some $300 billion a year. That, I believe, makes a clear and compelling statement about this Government's commitment to infrastructure, to the construction industry and to the people of Hong Kong.
Commitment at that level calls for responsible, and innovative, management of resources.
With that in mind, I was pleased to hear Greater China Growth Director of Arcadis Francis Au, just a few minutes ago, speaking about the Arcadis 2021 International Construction Cost Index. Even more pleased to hear that Hong Kong had dropped from third all the way to eighth in the annual ranking of 100 of the world's major cities and their construction costs.
This is not the premier league table. The lower the better, as long as we maintain our high level of public works funding. And we are, and we will. So my thanks to the industry. I can only hope that Hong Kong will continue to tumble down the Arcadis table.
Since its creation in 2019, the Project Strategy & Governance Office has played a valuable role in the cost management of projects prior to their funding application stage.
Indeed, the office, guided by fitness for purpose and no frills principles, has helped achieve savings of $70 billion to date, that from more than 340 projects and a total estimated cost of $640 billion.
The no frills and fitness for purpose guidelines work hand in hand with cost benchmarking during the planning and design stage of a project. Before significant resources have been committed.
They allow us to consider whether the project is value for money or whether, in fact, it should be reconsidered.
Building a supply chain conducive to cost-effective public projects is no less important.
That means strengthening project governance and employing such innovative construction strategies as modular integrated construction and digitalisation. It also means working to ensure better productivity, sustainability and safety in our public projects.
These guiding principles emanate from Construction 2.0, the Development Bureau's comprehensive analysis of the industry. Construction 2.0 spotlights innovation, professionalisation and revitalisation as vital to ensuring the construction industry's success through this 21st Century of unbounded opportunity.
Underlying it all is the critical importance of building a cost-conscious culture. Ensuring that Hong Kong's resources and public funds are used smartly, effectively and efficiently - for the good of the industry and our economy, and for the well-being of our community.
Financial Secretary Paul Chan gave this speech at the Project Cost Management Forum: Cultivating Cost-Consciousness on June 23.
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