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Hong Kong authorities have saved about HK$190 billion (US$24.4 billion) in costs from more than 540 public works projects over the past nine years, according to a top official who also pledged to further advance construction innovation. Deputy Financial Secretary Michael Wong Wai-lun said on Friday that the city had improved its performance in lowering construction costs, as Hong Kong’s position in the Arcadis International Construction Costs report dropped from third in 2020 to 10th this year. “This reflects a clear trend that projects in Hong Kong are becoming more affordable and more competitive in the global construction market,” Wong said during his opening remarks at the Project Cost Management Forum organised by the Development Bureau. Looking ahead, Wong said the city could “play a key role” in enhancing the global standing and competitiveness of the construction industry, to echo China’s 15th five-year plan last month. Noting that Hong Kong has an edge in technology, international connectivity, talent and professional standards and services, Wong said the city would take “decisive steps” to advance construction innovation, such as through the use of robotics. Wong highlighted that the bureau’s Project Strategy and Governance Office, established in 2016, had saved almost HK$190 billion from more than 540 projects over the past nine years. He added that the government’s annual capital works expenditure would exceed HK$120 billion in the next few years, as it would speed up small and medium-sized projects to counter the downturn in private construction. He said an additional HK$30 billion had been earmarked to launch projects that were urgently needed at the local community level, such as footbridges, lifts and small community halls. Secretary for Development Bernadette Linn Hon-ho said the mindset of cost-consciousness was “more critical than ever” amid the current global financial situation, as the government increased its public works expenditure and rolled out major development projects. In this year’s budget, Financial Secretary Paul Chan Mo-po predicted that the capital works expenditure was expected to increase from a previous estimate of HK$90 billion per year to about HK$120 billion in the medium term. The government’s capital account was also forecast to record a deficit in the medium term due to the accelerated mega development of the Northern Metropolis and other public works projects relating to the economy and people’s livelihood. But the level of deficit will decline year on year from 2026-27 onwards, according to Chan. Speaking at the forum, Linn pledged that the government would continue to use public money prudently. She added that it has been evaluating the cost-effectiveness of different development proposals in their initial phase, including reviewing the site, scale, design and implementation of projects. Linn also said her bureau had embraced technology and innovation to enhance productivity, such as by promoting the use of artificial intelligence (AI) in the construction industry. Francis Yau Yiu-fong, chairman of the Association of Consulting Engineers of Hong Kong, said using AI could eliminate risks earlier and reduce the use of contingency funds. He cited industry projections estimating that using the technology in the initial design stage of a project could save 20 to 25 per cent of costs. By comparison, project savings would be less – at 5 to 8 per cent – if AI were applied only in the construction stage. Alex Kwan, CEO Asia of Global Infrastructure Solutions Inc, a global engineering and construction firm, said using digital tools such as AI could help generate a variety of options in days or even hours to facilitate complex projects.
