The authority overseeing tender applications for renovation work at the fire-hit Wang Fuk Court failed to consider the dangers of illegal tendering practices, a case manager has said at an inquest into the deadly fire.
Testifying on Thursday, Matthew Chan, a case manager for the Urban Renewal Authority (URA), said the semi-government body had failed to consider the risks of bid-rigging in the tender process for the large-scale renovation at Wang Fuk Court, a government-subsidized housing estate in Tai Po.
In a typical bid-rigging scheme, a consulting firm typically offers a low price to oversee renovation or construction work at a fraction of the market rate.
In the case of Wang Fuk Court, where the massive fire in November killed 168 people and displaced thousands of residents, Will Power Architects was chosen to oversee the renovation project after offering a HK$308,000 consultancy fee and another HK$220,000 to inspect the entire property.
The consulting firm then had the opportunity to “rigg” the tender process in favor of Prestige Construction & Engineering, a related contractor, and carry out ineffective “rubber stamp” inspections.the independent commission investigating the cause of the fire heard last month.
Despite being aware that there was a significant range of prices submitted for the renovation contract – with deceptively cheap consultancy fees at the end – the URA did not intervene in the tendering process, Chan told Victor Dawes, chief adviser to the committee.
“We would not interfere”
The URA case manager said price discrepancies were common for a variety of reasons, such as when a newcomer to the field wanted to gain experience by offering lower prices.
Chan told Dawes that he did not analyze whether the prices were reasonable.
“We would not interfere in the decision-making process of the owners corporation,” Chan said.
Dawes asked Chan if he thought Will Power’s price seemed “suspiciously cheap”. The case manager said yes, “in terms of numbers”, but added that he did not dwell on any possible wrongdoing involved.
Chan also said the URA had “no role” in hiring the registered inspector and consultancy firm for the Wang Fuk Court renovation work, despite the service contract stipulating that it should have done so.
When Dawes presented a Competition Commission report in 2016 on the prevalence of bid-rigging in Hong Kong’s building maintenance industry, Chan said the URA failed to consider such risks, despite being aware of rampant secret bidding.
Chan also said the URA “would not comment on (Will Powers’) professionalism” as the authority trusted the consultant’s experience and wanted to avoid appearing biased.
He also told the hearing that the URA receives more than 10,000 tenders each year and does not have the ability to review each application in detail.
Chan added that URA’s Smart Tender platform, which anonymises the tender procedure and adjusts third-party price assessments to provide a fairer tendering process, cannot handle risks “with 100 per cent certainty”.
