To meet the needs of the community, the Government is committed to maintaining a sizeable investment in building new infrastructure and improving existing facilities. It will spend about $32 billion on capital works in 2004-05, and has earmarked an average annual provision of about $29 billion for capital works expenditure in the next few years.

The Government completed a number of major capital works projects in 2004 which included the construction of the first phase of the Science Park at Pak Shek Kok, the Trunk Road T7 in Ma On Shan, and the redevelopment of the Police Headquarters at Arsenal Street, Wan Chai. It also started construction of the Stonecutters Bridge, the new Headquarters Building for the Independent Commission Against Corruption, and the improvement to Tung Chung Road. Other major construction works in progress include the remaining works of the School Improvement Programme, the third phase of the Central Reclamation, the second stage of Penny's Bay reclamation, Hong Kong-Shenzhen Western Corridor, Deep Bay Link, Route 8, implementation of the flood prevention programme and the territory-wide replacement and rehabilitation of trunk water-mains.

As part of the Government's comprehensive Slope Safety Strategy, a 10-year Landslip Preventive Measures (LPM) Programme, with a budget of about $9 billion, was launched in April 2000 to systematically upgrade substandard government slopes and carry out safety screening of private slopes. In addition, about $700 million will be spent in 2004-05 to maintain government slopes. For private slopes, a revised loan scheme on building safety improvement was set up in July 2001 to provide assistance to owners who needed financial assistance to maintain their slopes. To further enhance visual harmony with the surroundings, landscaping will be included in upgraded or newly formed government slopes.

The momentum in improving the safety performance at construction sites continues. The accident rate for public works contracts in 2004 was 19.1 accidents per thousand workers per year, a slight decrease of six per cent when compared with that of 2003. To strengthen safe practice in construction, seven public works projects have been chosen to implement the construction design management concept at project design stage to systematically formalise and document the risk control measures for the hazards and impacts related to project construction and maintenance. More public works projects will be included for the implementation of the construction design and management. The Pay for Safety and Environment Scheme is bearing fruits in improving the environmental performance of public works sites, and an enhanced specification is being prepared for further abating air, noise and waste water pollution associated with public works.

The Government, working in close partnership with the Provisional Construction Industry Coordination Board, has achieved notable progress on most recommendations made by the Construction Industry Review Committee. To strengthen communications with key stakeholders, the Board has continued to publicise its latest achievements through various channels and circulated a quarterly leaflet to all interested parties complementing information at its website (www.pcicb.gov.hk).

New legislation proposing to establish the Construction Industry Council as an umbrella organisation with statutory powers to exercise self-regulation and take ownership of industry reforms is being scrutinised by the Legislative Council.

The first phase of the voluntary subcontractor registration scheme (VSRS) launched in November 2003 has received an encouraging response. By the end of 2004, some 2 200 applications for registration were received and about 1 400 cases approved. The Environment, Transport and Works Bureau (ETWB) also introduced a contractual condition requiring public works contractors and their subcontractors to employ subcontractors registered under the VSRS. This new requirement will not only lend support to the scheme, but will also be useful in monitoring the performance of domestic subcontractors under public works contracts. Major clients and main contractors have already pledged similar support for the VSRS.

The registration authority for the construction workers registration system was established in September 2004 under the Construction Workers Registration Ordinance and preparatory work for commencement of registration is in progress. All construction workers must be registered before they can work on construction sites. This will improve the quality of construction works, foster a quality culture in the construction industry and raise the status of construction workers through statutory recognition of their skill levels. It will also help combat the hiring of illegal workers and resolve wage disputes between contractors and workers, and, in the long run, will provide more reliable labour supply data to facilitate manpower planning and training.

The ETWB has been proactively encouraging the exchange of professional and management knowledge, strengthening ties and cooperation among construction enterprises in Hong Kong and the Mainland to promote Hong Kong's construction and related engineering professional services in the Mainland. In the Mainland and Hong Kong Closer Economic Partnership Agreement (CEPA) implemented on January 1, commitments were secured for Hong Kong contractors and consultants to establish their business operations in the Mainland. In the Supplementary Agreement to CEPA signed on October 27, additional commitments were secured for the construction and related engineering services sector, including the extension of application of certificate for undertaking a single construction project, the recognition of construction performance outside the Mainland for application of a qualification certificate, the cancellation of the residency requirement for engineering technical staff and financial managerial staff in the Mainland and the cancellation of the restriction on the proportion of Hong Kong permanent residents employed as project managers.

In 2004, the ETWB jointly organised one conference and two seminars in the Mainland with the Ministry of Construction, Chongqing Municipal Construction Commission (CMCC) and Tianjin Construction Administration Committee for their construction industries. These have promoted the exchange of knowledge among professionals and provided an excellent platform for construction enterprises of the two places to explore market opportunities, establish cooperation and cultivate business networks. The ETWB and the CMCC signed a Cooperation Agreement on Construction and Related Engineering Services in October 2004 to strengthen the cooperation between both sides in various areas, including exchange of information, professional training and business cooperation.

The ETWB has been making every endeavour to encourage and facilitate discussions on mutual recognition of the construction-related professions between the local professional institutes and their Mainland counterparts. Following the signing of the mutual recognition agreement for estate surveyors, the mutual recognition agreements for architects and structural engineers were signed in February and August 2004 respectively. The drafting of the mutual recognition agreements for quantity surveyors and planners has been completed while discussions are ongoing for geotechnical engineers, electrical engineers, construction supervising engineers, landscape architects and land surveyors. Separately, under the Supplementary Agreement to CEPA signed on October 27, eligible Hong Kong residents would be allowed to take part in a number of professional qualification examinations related to the construction and engineering services, thus opening another route for the local professionals to acquire the relevant Mainland qualifications, thereby facilitating them to work in the Mainland.