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Introduction
Today, Hong Kong enjoys reputations being a vibrant cosmopolitan that takes role of a global financial hub. Dated back to the 60s, Hong Kong was still a fish village with sluggish economy. Then you may question who has contributed to such a great morph. Undoubtedly, the Hong Kong local construction industry has played a significant role in constructing structures and facilities in local community that has continuously supported the long-term development of economy in the past decades. However, this historical industry is facing different challenges regarding the efficiency of construction projects in recent years, which urges the Government to carry out new changes to increase the productivity and sustainability of the Industry. The Development Bureau of HKSAR recently responded by releasing Construction 2.0 Time to Change, a report that highlights the 6 core challenges that the Industry is facing and set up 3 pillars, including innovation, professionalism and revitalization, to give the direction of future development in the Industry. There are numerous ways to realize the 3 pillars. In the following, I will explain the meaning of each pillar and give recommendations on ways to realize each pillar by reviewing the Report and knowledge in construction management, and these recommendations will be based on 4 categories, including the current procurement systems, contractual arrangement and tendering approach, organizational setting, construction planning and financial feasibility study.
Discussion
Innovation
Innovation in construction industry refers to the discovery and application of new approaches and tools to carry out the entire construction process, including the planning, design, construction and etc. (The Development Bureau of Hong Kong, 2018). Innovation is an indispensable element in the construction industry as it helps organizations to embraces the changes in the market economy and derives new technologies to boost the productivity and efficiency of construction project works, thus enhances project delivery outcomes. This is beneficial for many stakeholders participating in the construction project, including the industry professionals, business companies and the general public.
For typical contractual systems widely used in current construction projects, the interests always tend to lean towards the client or the contractor. For instance, the contract based on Bills of Firm Quantities is incapable for extensive variations in project tasks which is unfavorable for the contractor, and remeasurement contract, such as the contract based on Bills of Approximate Quantities , the final cost is unclear until the tendering stage of the project, which is quiet risky for the client. With a view to these problems associated with conflict of interests raised by conventional contractual systems, the Government can widely adopt New Engineering Contact (NEC) for current construction projects. NEC is a series of contracts designated to manage a construction project throughout its entire process and target at preventing costly disputes (ice, 2019). Unlike traditional contract, NEC emphasizes on partnering concept instead of client-contractor relationship, and collaborative working between all project participants to achieve common goals. It also encourages proactive risks identification and collaborative problem solving in an open manner. These differences allow NEC to focus more on project management and making NEC contracts to be more procedural and management intensive (Construction Industry Council of Hong Kong, 2015). Therefore, the productivity and cost-effectiveness of construction projects can be significantly increase.
Apart from the changes in contractual arrangement, new approaches for construction planning can also be used to achieve innovation. First, the Government can establish the Construction Innovation and Technology Application center to introduce cutting-edge construction technologies from leading countries to local construction industry. These advanced technologies can be the Internet of Things (IoT) and robotic applications. IoT refers to the process of installing sensors into machine components for monitoring their operations (For Construction Pros, n.d.). The use of IoT lead to the growth of intelligent machines and they greatly increase the efficiency of the construction stage.
In addition to the use of IoT, Building Information Modelling (BIM) can also be used in a greater extend. BIM is a process that start with the creation of an intelligent 3D model for the structure and is adapted for changes inside the model during the entire project lifecycle (AUTODESK, n.d.). With BIM, the designer is able to receive data from the 3D model associated with physical and functional characteristics of the structure and allows the engineers and contractors to collaborates better. Therefore, BIM gives more efficient ways for the design team and the construction team to work more efficiently. BIM can be applied wider in local construction industry by lowering the maximum budget of capital projects that BIM applies on, given that the current maximum budget is mandated as HK 30 million. With wider application of BIM, better decision will be made on designing works and construction works and this can greatly save the costs associated with design and construction errors.
Besides, the Government can also promote off-site construction using Design for Manufacture and Assembly (DfMA) and Modular Integrated Construction (MiC). DfMA is a design approach that focuses on the ease of manufacture and efficiency of assembly of construction components (Construction Industry Council of Hong Kong, n.d.), and MiC is an innovative construction method which free-standing integrated molecules are manufactured in a prefabrication factory before transporting to site for installation. DfMA, together with the use of MiC, can significantly reduce the number of on-site project tasks and lower the assembly time and cost by reducing the amount of labors and materials. Most, importantly, this can promote the safety of construction workers as off-site construction replaces some of the on-site construction activities for the activities carried out in a controlled factory environment (ice, 2019).
Professionalization
Professionalization in construction industry refers to the use of professional knowledge to enhance the performance over a wide range of project activities to improve the quality of build assets and to reduce the frequencies and severity of incidents (The Development Bureau of Hong Kong, 2018). It is at upmost importance in the Industry as it not only ensures the proper running of construction projects, but also upholding the image and reputation of the Industry. This helps the Industry to gain support from other stakeholders in the society such as the shareholders and the media and thus making the Industry sustainable. However, relatively high incident rate such as project delay and failure has created a declining image of the industry as being dangerous and opportunistic. Therefore, the Government should carry out some measures to improve professionalism in the Industry.
The delays and incidences of construction works is a result of lack of project management capabilities. With a view to that, the Government can adopt some measures in organizational setting and construction planning to enhance the project management skills of Industry professionals. To commence with, the Government can strengthen the control of cost of capital works by setting up organizations, such as the Project Cost Management Office (PCMO). PCMO helps to devise and promote cost management policies for capital construction projects and it reviews the project requirements and relating policies, as well as scrutinizing the cost estimation from the existing projects to enhance cost management in the Industry (The Development Bureau of Hong Kong, 2018). PCMO offers project management training programs to enhance work departments skills and knowledges about cost estimation. In addition, it also helps to improve current project management and cost control measures by making reference to international practices and hire external support services when necessary (The Development Bureau of Hong Kong, 2018). Therefore, the above measures favor the financial feasibility studies on the construction projects and greatly increase the accuracy of the cost estimations. This allows the construction works to be carried out in a more professional way and helps to avoid incidents caused by over-budget.
Apart from the set-up of PCMO, the Government can also establish organizations to nurture elites to become a group of leaders for project management in the Industry. Citing the case in UK as an example, the UK Government has established a Major Projects Leadership Academy (MPLA) to boost the leadership skills of local civil servants and consequently lead to a drastic improvement in the performance of construction projects, including the increased number of projects being completed on time and in budget. The Hong Kong Government can conduct studies and researches on the case of UKs success and try to develop a similar measure in Hong Kong. By increasing the leadership level in Hong Kong, the collaborations between departments can be enhanced and this allows the project tasks to be carried out more effectively and efficiently. This helps to motivate the whole project team towards optimum performance in project delivery and reduces mistakes, therefore giving the Industry a more professional image to the general public.
Besides, there are also direct ways to increase the efficiency of construction works to promote professionalism. For example, The Hong Kong Institute of Construction (HKIC) can provide more site-based learning courses, diploma and higher-diploma courses such as machine operation courses, water work courses and etc. to enhance the professional skills of the working force. HKIC can also provide more safety trainings to the working forces to raise the safety awareness of workers during on-site construction works. This can be accompanied by some measures aimed at improving site safety, such as conducting some studies on workers behavior to identify the factors leading to accidents, promoting design for safety to incorporate safety measures in the design process of structures to prevent hazards caused materializing (The Development Bureau of Hong Kong, 2018). The second approach to increase the efficiency of construction works is to modify workers payment method. The majority of construction projects in Hong Kong nowadays uses conventional contractual arrangement such as the contract based on Bills of Firm Quantities . They belong to fixed-fee arrangement and has provided price certainty for workers, so they tend to finish each fee-paying project tasks quickly, which greatly undermines the quality level of the construction works (The Development Bureau of Hong Kong, 2018). A way to discourage this behavior is to alter the payment method to monthly wage basis. This can enhance the quality of the construction works and reduce the occurrence of accidents. Moreover, construction workers should be compensated adequately during their idle period for their heavy workload. This provides a more attractive environment for the working force, thus attracting more talents to the industry and simultaneously avoid the shrink in the size of current working force (The Development Bureau of Hong Kong, 2018). The above all measures help to carrying out construction works in a more efficient and safety way and improve the quality of the project outcomes. This enhances professionalism in the Industry.
Revitalization
Revitalization in construction industry refers to the transformation of public perception of the Industry being a dirty, dangerous and dull industry into one that offers clean, safety and supportive environment for young skilled talents (The Development Bureau of Hong Kong, 2018). It always associates with innovation, that brings new ideas and approaches to revitalize the Industry. Revitalization in the Industry can help to address the problem of labor shortages due to retire of senior workers and attract more young talents in design and construction to enter the Industry and increase the professional level, and thus enhancing project performances in local construction projects. Therefore, it is necessary for the Government to carry out measures to transform the stereotyped industry to one that is vibrant.
One of the keys for revitalization is to change the commercial mindset entrenched in most of the project participants nowadays. For current construction planning and contractual arrangement process, decision makings are relied heavily on the technical issues, rules and regulations. This narrows the sight of the project participants and thus reducing the capacity for creative thinking and changes in construction projects. The use of modern contractual and procurement methods such as NEC (mentioned in a) can tackle this problem. NEC helps to achieve proper risk allocation between the project partners, and this allows its contractual arrangement to focus more on project performance instead of relying heavily on technical and other legal issues. This gives flexibility to construction projects and allow more new ideas to enhance the project outcome. These new ideas trigger the development of more innovative approaches and measures and attract more younger generations to the Industry.
In addition, the Government should also carry out system re-engineering. This helps to remove outdated and overlapping regulations and thus reduce the constraints during decision making in procurement systems and contractual arrangement. This avoids unnecessary amendment on the contract documents and let the project participants to focus more on ways to improve project management and make better decisions to boost the efficiency of project delivery.
Apart from that, strategic procurement can also be carried out. Strategic procurement refers to the use of strategic long-range plans to ensure timely supply of goods and services for firms to meet its core business objectives (Quora, n.d.), which is critical for the success of a project. There are many new emerging contracts forms to choose from, including the NEC and the other forms of cost-based contracts, such as cost reimbursable contracts and target cost contract. Cost reimbursable contracts significantly increases the ease of cost calculation and it provides great flexibility for changes in projects scope, quantity and program and is capable for frequent changes in project tasks (The Development Bureau of Hong Kong, 2018), while target cost contract encourages the contractor to achieve a better performance in the project to earn more. By selecting a suitable procurement method for a project, optimum performance of the project can be achieved, and this helps to reinvigorate the Industry.
Conclusion
There are many ways to realize the 3 pillars innovation, professionalism and revitalization through different approaches and measures based on the changes in the current procurement systems, contractual arrangement and tendering approach, organizational setting, construction planning and financial feasibility study.
References
- New Engineering Contract (NEC). (n.d.). Retrieved from https://www.ice.org.uk/what-is-civil-engineering/what-do-civil-engineers-do/new-engineering-contract.
- About MiC. (2019, September 16). Retrieved from http://www.cic.hk/eng/main/mic/whatsmic/aboutmic/.
- Benefits of BIM: Building Information Modeling. (n.d.). Retrieved from https://www.autodesk.com/solutions/bim/benefits-of-bim.
- How the Internet of Things is Impacting the Construction Industry. (n.d.). Retrieved from https://www.forconstructionpros.com/construction-technology/article/12169353/how-the-internet-of-things-is-impacting-the-construction-industry.
- How the Internet of Things is Impacting the Construction Industry. (n.d.). Retrieved from https://www.forconstructionpros.com/construction-technology/article/12169353/how-the-internet-of-things-is-impacting-the-construction-industry.
- New Engineering Contract (NEC). (n.d.). Retrieved from https://www.ice.org.uk/what-is-civil-engineering/what-do-civil-engineers-do/new-engineering-contract.
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