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How can Hong Kong remain a benchmark of construction excellence?

20 February 2023

ICE Fellow Alex Katsanos asks how Hong Kong can overcome unprecedented productivity challenges and thrive in a changing environment. 

How can Hong Kong remain a benchmark of construction excellence?
Without rapid change, Hong Kong stands to lose out on substantial economic benefits. Image credit: Shutterstock

The construction industry has always been one of the engines of economic growth in Hong Kong.

With its high productivity and adaptability to innovation and change, it has for decades established the city’s construction sector as a global benchmark for excellence.

Maintaining this reputation, however, is not without challenges – especially in the face of the unprecedented capital expenditure planned this decade.

Productivity continues to suffer. This is due to social and economic factors – such as an ageing workforce and rising costs – as well as a failure to capitalise on the opportunities that digitalisation and off-site manufacturing offer.

Without rapid change, Hong Kong stands to lose out on substantial economic benefits.

Four key improvements the Hong Kong construction industry can make

The Construction Industry Council (CIC) has worked with industry stakeholders to assess the key challenges Hong Kong faces.

They have developed strategies to unlock barriers to change and accelerate productivity growth in the Hong Kong construction industry.

The study involved extensive local stakeholder engagement, a review of current government initiatives, international research on best practice, and a review of previous efficiency issue diagnostics in construction.

The CIC has identified four areas of opportunity:

  • Shifting from on-site operations to high-productivity construction in a controlled manufacturing environment, including greater modularisation, off-site production, and on-site assembly.
  • Driving innovation – establishing mechanisms to encourage and nurture new products, methodologies, and ideas that support productivity, safety, and sustainability improvements.
  • Streamlining existing approval processes by leveraging digital technologies and modifying existing communication mechanisms.
  • Enhancing project management delivery capability and embracing alternative, effective procurement options.

The roadmap for implementation

The study researched strategies for improvement based on successful similar initiatives overseas, original ideas developed specifically for Hong Kong, and input from more than 40 key stakeholders in the region.

Among the many initiatives explored, stakeholders reached a consensus on 13 priority strategies. Each combines high-impact potential, high likelihood of success, and good evidence of successful application elsewhere.

These priority strategies, within their respective focus areas, are as follows:

Shifting to high-productivity construction

  • Developing a digital library to facilitate modular integrated construction (MiC) and Multi-trade integrated Mechanical, Electrical and Plumbing (MiMEP).
  • Promoting and supporting the adoption of these tools through advocacy initiatives and development to educate industry stakeholders and practitioners.
  • Expanding the MiC Resources Centre to build industry capability.
  • Improving contract terms to promote wider adoption of MiC and MiMEP by addressing supply chain risks.

Driving innovation

  • Establishing a construction innovation platform to provide a systematic approach for facilitating innovative ideas, R&D programmes, and streamlining test-bedding processes with a flexible funding mechanism.
  • Generation of an eco-system for innovation through tendering to incentivise adoption of new methodologies and technologies that support productivity, safety, and sustainability enhancements.

Streamlining approval processes

  • Developing an integrated digital submission and approval process that leverages the benefits of building information modelling (BIM), incorporating automated design checking tools, e-inspection procedures, and common spatial data systems.
  • Extending the list of minor works exempt from the approval and consent process to reduce the workload in submissions.
  • Assessing proposals to expedite the efficiency of approval processes including parallelisation of submissions, a data-driven review of response time, and improving communication mechanisms.

Enhancing project management and procurement

  • Developing an integrated, centrally managed digital platform to enhance project control and planning through AI-enhanced big data.
  • Establishing a framework to enhance project management skills by providing professional training and accreditation as part of a structured career development path.
  • Launching a product certification scheme for construction materials procurement to reduce time on testing and approvals.
  • Promoting of benefits of early contractor involvement (ECI) in projects to improve design quality.

Supporting the implementation of the 13 priority strategies

While developing the strategies, the CIC secured the support of stakeholders to spearhead implementation.

The recommended initiatives will require both public and private sector support to succeed and yield benefits to Hong Kong’s industry, economy, and society.

Find out more

Find out how the ICE is promoting global best practice in infrastructure planning and prioritisation through the Enabling Better Infrastructure (EBI) programme.

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  • Alex Katsanos, Managing Principal at Aurecon