Hong Kong should study how Singapore awards infrastructure contracts

As Hong Kong prepares for another major push in public works, one question deserves far more attention than it has received: are we buying infrastructure in a way that is sustainable for the construction industry and the public as a whole?In his February budget, Financial Secretary Paul Chan Mo-po announced that HK$150 billion (US$19.1 billion) will be transferred from the Exchange Fund to support the Northern Metropolis and other infrastructure projects in the coming two years. This major commitment of public resources signals that the government intends to keep the works programme moving despite financial pressure. That makes it even more important to ask whether our tender evaluation system is producing healthy competition.At present, Hong Kong’s tender price evaluation method for infrastructure projects generally gives the highest price score to the lowest bid. That score normally accounts for 60 per cent of the total, with the remaining 40 per cent based on technical attributes. As recent research from New Zealand pointed out, once price is given a weighting higher than 25-30 per cent, it is typically the deciding factor.