Hong Kong’s antitrust watchdog has called for bid-rigging in the city’s building renovation sector to be criminalised, in closing arguments in the public inquiry into deadly fire at Tai Po it started
The remarks came as hearings for an independent committee investigating the Tai Po fire last November resumed for closing submissions.
Authorities suspect bid-rigging was involved in a major renovation project at Wang Fuk Court, where the fire broke out and killed 168 people.
Lester Lee, executive director of the Competition Commission’s legal services, told the committee that anti-competitive behaviour, such as bid-rigging, was “widespread” and “systematic” in the city, with criminal gangs commanding a wide network of refurbishment contractors in the market.
Lee spoke of an ongoing investigation in which a suspected union approached contractors beyond its network to orchestrate a bid-rigging plot, only to be told by the firms that they had already been recruited by another bid-rigging group.
“This shows how widespread and brazen these bid-rigging syndicates are,” Lee said in Cantonese.
The Competition Commission believes the existing regulatory regime and fines are not sufficient to deter bid-rigging, Lee said. He added that the commission supports measures that can improve detection of bid-rigging schemes and successful prosecutions, he said.
Currently, cases involving violations of the city’s Competition Ordinance are civil in nature and are heard by the Competition Court, which can impose sanctions such as fines or director suspensions.
Lee called for bid-rigging to be criminalized and offenders to “face heavy prison terms”, while the civil regime could remain available to the authorities.
He said the flexibility of allowing authorities to adopt criminal or civil proceedings based on the strength of the evidence could strengthen the deterrent effect.
The commission also called for the maximum fine to be increased through legislative amendment, he added.
Also speaking on Wednesday, senior councilor Mike Lui, who represents the Urban Renewal Authority (URA), dismissed allegations that the semi-government body had been “shrinking its responsibilities” and “shortchanging its role” in the fight against bid-rigging.
URA has been criticized for failing to address the risks of bid riggingdespite its responsibility to oversee tender applications for the renovation work at Wang Fuk Court.
Lui said the URA faced “practical constraints” as it is not a law enforcement agency and lacks the powers and resources to investigate suspected bid rigging.
URA’s Smart Tender platform, which anonymizes the tender process, was merely “a shield but not a fortress” against illegal tendering practices, Lui said.
Martin Ho, representing ISS EastPoint Properties, said the property management firm had no role in overseeing the renovation works at Wang Fuk Court.
The committee previously heard that ISS electrician Law Kwok-shui unknowingly disabled fire alarms at Wang Fuk Court months before the fire.
Ho said on Wednesday that despite Law’s mistake, fire safety contractors Victory Fire Engineering and China Status Development and Engineering should be held accountable for failing to correct the error.
Aaron Chan, representing China Status director Leung Ping-kay, said on Wednesday citing an expert’s analysis that, even if the fire alarms had been working when the fire broke out, the time to escape would not have been more than 10 minutes.
Commission chairman Justice David Lok interrupted and dismissed Chan’s submission, saying: “If you wanted to say loud alarms would have been useless (in the fire), I don’t think anyone would agree with you.”
Chan said he was merely suggesting there were other factors that could have prevented residents from escaping during the fire, such as foam boards used to protect windows that blocked their views.
Lawyers for the nine residents of Wang Fuk Court and the government representative will give their closing arguments when the hearing resumes on Thursday.
