Capital budget planning practices of building contractors in Hong Kong

This paper explores the current practice of capital budget planning and control in the Hong Kong (HK) construction industry, based on two surveys undertaken in 1994 and 1999. The aims of these surveys were to uncover the financial planning, monitoring and control procedures used by building engineering contractors in HK. The results of the current survey reveal that less than half of the respondents undertook any form of capital budget planning. The most common form of capital budget planning was a review of the minimum rate of return. Despite the low prevalence of planning, most respondents adopted some method of capital budget control, especially by way of monitoring project performance. The 1999 study was compared with a similar survey conducted in 1994. The results indicate that there was no significant improvement in capital budget planning practices over the five year period. In addition to these findings, this paper concludes with a classification of firms, according to their capital budget planning behaviour, using discriminant function analysis.     

The capital budgeting evaluation practices (2004) of building contractors in Hong Kong

This paper reports the investigation results of capital budgeting evaluation practices of Hong Kong building contractors. The survey aims to identify the popularity of various techniques for capital budgeting evaluation and to measure the changes of the practices longitudinally by comparing the results of the current study (2004) with those of the similar surveys conducted in 1994 and 1999. The current survey results revealed that the “formal financial evaluation” was the most popular technique for capital budget evaluation. The “payback period” was the mostly used investment appraisal technique. For risk appraisal techniques, “shortening payback period” occupied the first position. The “planning programming” remained as the most popular management science technique. Moreover, a comparison of the practices of large contracting firms was carried out to view the changes over the last 10 years. The results showed that the practice of capital budget evaluation was emphasized. The popularity of employing investment appraisal and risk analysis techniques was dropping. In addition, the capital budgeting evaluation techniques examined were fitted into a discriminant function analysis (DFA), which allowed contracting firms to be classified in accordance with their predominant characteristics in the practices. The classification result was 89.1% of all cases were correctly classified.     

Design issues of using prefabrication in Hong Kong building construction

Prefabrication techniques have been adopted for the last two decades in public housing projects in Hong Kong, but the use of prefabrication in the private sector was encouraged only after the implementation of the Joint Practices Notes which promote its use. Although previous studies acknowledge the environmental benefits of using prefabrication, only a few studies have addressed sustainable design concepts (closed‐loop) in the adoption of precast construction. A questionnaire survey was administered to experienced Hong Kong construction professionals, and case studies of recently completed building projects were compiled to ascertain the use of prefabrication with reference to life cycle approach. The findings revealed that prefabrication, combined with modular design and standard components, saved time and construction/design costs, as buildings systems were used across projects. However, in some projects, specific site conditions restricted the use of similar prefabricated building systems across projects. Surprisingly only a few participants addressed life cycle design concepts such as design for deconstruction when adopting precast construction. Also, although it is common knowledge that flexible and demountable prefabricated building systems would result in efficient use of resources, their use is seldom practised in Hong Kong.     

Construction site safety in Hong Kong

The structural characteristics of the Hong Kong construction industry, most notably its elaborate system of subcontracting and the casual basis on which labour is employed, pose serious problems for safety managers. By international standards, Hong Kong's construction industry performs very badly in the area of safety. Recent work in the UK and Finland highlights the effectiveness of behavioural techniques to improve safety performance on construction sites. Work is currently under way to test these techniques in the Hong Kong construction setting. The structural properties of the Hong Kong construction industry have been taken into consideration and labour commitments to the group and to the organization have been identified for additional consideration in research. It is expected that these variables will intervene in the application of behavioural techniques to determine their effectiveness. This paper investigates the theoretical background to commitment at the group and organizational level and presents a site level research model which is illustrative of the possible effects that group and organization level commitment may be found to have on the use of behavioural techniques.     

现代主义到香港——记四位建筑师

本文通过四位建筑师的分析．观察香港现代建筑的发展轨迹。在香港由难民潮．山寨工业走向国际金融服务中心的过程中．实用、经济、高效率地使用土地一直主导着建筑设计的方向。本文旨在丰富香港现代当代建筑的研究．为现代建筑在亚洲和大中华的发展．提供佐证资料。     

Genetic algorithm model in optimizing the use of labour

The construction industry is characterized by the existence of multiple trades and crafts. With the existence of multiple-tiers of labour-only-subcontracting in Hong Kong, tradesmen are normally assigned to tasks of a narrowly defined skill. Lately, there has been a call for the adoption of a directly employed labour scheme by the Hong Kong Housing Authority and the public works departments in Hong Kong in order to improve both safety and quality. However, current industry practice has hindered the adoption of directly employed labour, which requires assigning tradesmen to broadly defined task groupings. In implementing the scheme, the first thing to be resolved is how to maximize the levels of use of workers, because that is the major financial incentive to encourage contractors to adopt the directly employed labour policy. This coupled with the shortage of some skilled craft workers call into question the traditionally accepted ‘single-skilled’ or ‘single-task’ approach in labour deployment. A genetic algorithm model is developed to optimize the labour deployment and practical examples are presented. The optimization results are very promising, confirming the practical application value of the model.     

试析“九七”前后香港国际金融中心的发展(上)

论文分为四个部分。第一部分概述了香港国际金融中心的崛起和现状,探讨了她的成因和经验.第二部分分析了香港国际金融中心的存在问题和面临的挑战,香港与其竞争对手新加坡、日本各自的优势和不足.第三部分进一步分析了香港国际金融中心的优势和机遇.论述了巩固和发展其地位的主要措施及发展前景.第四部分主要论述了香港与内地之间的金融关系。     

An empirical study of the benefits of construction partnering in Hong Kong

Many construction companies have adopted partnering in their construction projects over the past 10–15 years due to favourable project outcomes achieved. Its use in construction projects has been increasing rapidly as its benefits become more apparent and pervasive. This paper reviews the partnering literature within the construction field and tries to portray the comprehensive picture of benefits for the partnering practice. Through partnering and the active involvement of all key project parties, the project is more likely to be completed within budget, on time, and with the least number of conflicts, claims and work defects. Also, this paper reports upon the findings of a questionnaire survey of partnering benefits in Hong Kong. Seventy‐eight project participants completed a questionnaire to indicate the relative importance of partnering benefits. The perceived benefits were measured and ranked from the perspectives of the client, contractor and consultant for cross‐comparison. The results revealed that ‘Improved relationship amongst project participants’, ‘Improved communication amongst project participants’ and ‘More responsive to the short‐term emergency, changing project or business needs’ were the most significant benefits derived from the use of partnering. More partnering arrangements should be actively introduced into the construction procurement process so that every party can enjoy the full benefits of partnering.     

Project management and the construction of the Hong Kong mass transit railway

The management structure and systems used by the Hong Kong Mass Transit Railway Corporation to control time and cost during the construction phases of their railway works are described. Some of the factors that contributed to the opening of the first two phases of the project, ahead of programme and under budget, are also discussed.     

The evolution of prefabricated residential building systems in Hong Kong: A review of the public and the private sector

Prefabricated building components have been adopted in Hong Kong for over two decades for high-rise buildings. In the public sector, prefabrication together with standard modular design was introduced in the Housing Authority's public housing projects in the mid-1980s. Over the years, precasting techniques have significantly evolved in public housing projects. In contrast, prefabrication has only recently been adopted in the private sector. The aim of this paper is to examine the evolution of precasting technology in high-rise residential developments in Hong Kong, and then explore the technological influences in both sectors. A database of 179 prefabricated residential buildings was developed and detailed case studies of five residential developments were conducted. The findings revealed that a greater extent of prefabrication use over the years, in terms of precasting percentage by volume and types of precast elements utilised. Major prefabrication innovations, in both sectors, influenced the technological advancement in prefabrication in Hong Kong.     

Energy and water uses and their performance explanatory indicators in hotels in Hong Kong

This paper firstly presents a case study on analyzing the electrical load profiles recorded in a Hong Kong hotel over a period of 12 months to examine the potential energy saving opportunities (ESOs) in its building services installations. The case study is followed by a report of the survey results of energy and water use in 36 quality hotels in Hong Kong. Finally, a regression analysis where the surveyed energy and water use data were correlated to a number of hotel background or operational parameters to search for suitable energy and water use performance explanatory indicators is presented. The survey results depict a diversified energy and water use situation in Hong Kong’s hotels, but the regression analysis indicates that, while some of the correlations obtained are weak, there do exist a few strong energy and water explanatory indicators.     

The Application of Rubber Dams for Water Supply in Hong Kong

There is a long history of the use of inflatable dams (rubber dams) in Hong Kong. Three inflatable dams were constructed in the 1960s as an integral part of the Plover Cove water supply scheme which was the largest project in Hong Kong at that time. However, because most civil-engineering structures are constructed from steel, concrete, soil and rock, the use of rubber as a construction material is subject to much scepticism. The problems and counter-measures associated with the use of rubber are discussed, based upon the experience of several departments which have used the dams in Hong Kong, and in other parts of the world.     

Integration of time and cost in the planning and monitoring of the Hong Kong mass transit railway project

One of the many functions of project management is the forecasting, monitoring and hence control of the project in terms of both time and cost. A computerized system, integrating the elements of time and cost, was used on the Hong Kong mass transit railway project to assist in this function and also in the financial evaluation of tenders.     

Application of cross validation techniques for modelling construction costs during the very early design stage

Building client/owners need estimates of likely construction costs for budgeting purposes early in the procurement process when little detailed design information is available beyond the type, size and location of the facility. One of the more sophisticated techniques available for this purpose is the storey enclosure method, developed by James in 1954. This uses the basic physical measurements of the building envelope, together with an arbitrary set of multipliers, or weights, to forecast tender/bid prices. Although seldom used in practice, James succeeded in showing his method to be capable of significantly outperforming alternative approaches.

The research reported in this paper aimed firstly to reassess James’ claims with new data and secondly to advance his method by using regression techniques to obtain the weights involved. Based on data from 138 completed Hong Kong projects for four types of building, two types of regression models were developed. This involved the use of sophisticated features such as leave-one-out cross validation to simulate the way in which forecasts are produced in practice and a dual stepwise selection strategy that enhances the chance of identifying the best model. An algorithm was also designed to select the appropriate parametric and non-parametric tests for objective and rigorous model evaluation against alternatives.

The results indicate that, contrary to James’ claim, both his original method and the two regression-based alternatives are not significantly better or worse than other models. Surprisingly, the widely used floor area model was found to under-perform in terms of consistency for offices and private housing. For private housing in particular, it was felt that the storey enclosure method was likely to offer good prospects of improvement on those methods currently in use in practice.     

Market structure of the construction industry in Hong Kong

This study examines the market structure of four different sectors within the construction industry in Hong Kong. Market concentrations, expressed in terms of Herfindahl-Hershamann indices (HHIs) and number equivalents (HNEs), are calibrated for the top five contractors and compared with those of the local property industry. The study reveals the following ascending order of market concentrations: private building, public building, property development, and civil engineering. Our explanation is that technological and capital requirements have imposed a strong barrier to entry into the civil engineering sector, resulting in a concentrated market. Conversely, the lack of technological demand and supply in the private building sector has led to easy market entry and exit. Building contractors thus compete intensely on cost reduction rather than technology improvement, leading to poor construction safety and product quality. The paper concludes that the Government, being a major client of construction works and regulator of the industry, can assume a more active role in promoting the overall competitiveness of indigenous local contractors in Hong Kong.     

Critical factors for environmental performance assessment (EPA) in the Hong Kong construction industry

With the rise in the public concern on environmental protection, more construction firms start to apply environmental management for their construction activities. As a result, environmental management systems (EMS) have been implemented in construction. However, to improve the construction environment in Hong Kong, environmental performance assessment (EPA) has been designed for reviewing, monitoring, checking and evaluating environmental performance. A list of evaluation factors for EPA are identified and grouped into seven major factors: management and training; air and noise; auditing; waste and water; cost saving on resources; energy; and regulation. The results from a survey highlight that the most important evaluation factor is management and training and the least significant result is regulation. A voluntary approach has been promoted instead of the traditional mandatory system. Furthermore, three case studies are used to test the reliability with seven groups of evaluation factors in measuring the environmental performance for construction. The results from the case study analysis proved the effectiveness of the developed environmental performance assessment. Therefore, the developed environmental performance assessment can benefit the construction industry and help to achieve continuous improvement on environmental performance.     

Quest for continuous quality improvement for public housing construction in Hong Kong

With mandatory implementation of the ISO 9000 quality system by the Housing Authority in Hong Kong, most construction firms there now claim to have initiated quality systems in their processes as defined in their quality manuals. In addition, an objective quality measuring yardstick, the Performance Assessment Scoring Scheme (PASS), has been administered by the Housing Authority of Hong Kong to monitor the performance quality of contractors. These two measures, coupled with the two other contractual requirements stipulating the use of mechanized formwork and precast facade units, are directed towards achievement of a desired quality standard. However, the PASS analysis has revealed that the general level of quality has not improved significantly and the expected continuous improvement in construction quality has not been realized over a specific time period. Quality appears far better on paper than does the actual work on site. This suggests that quality management in the construction setting is far more difficult to achieve than it is in other industries. This paper explores possible reasons for failure in the quest for quality in public housing construction, and proposes changes needed before the vision of continuous quality improvement can be realized.     

Conflict management styles in Hong Kong industries

Review of literature has revealed that little research on conflict management has been conducted in Hong Kong industries despite Hong Kong being one of the world's most competitive economies, and a major commercial, financial, industrial centre. This paper examines the use of different conflict resolutions in 63 actual case studies from Hong Kong industries. Contrary to common perception and previous findings, ‘confrontation', as a mode of conflict resolution, is found to be more commonly used in handling conflict. And significantly, almost all of the case incidents which used the ‘confrontation' approach were said to have achieved positive consequences. The authors argue that this change of resolution strategy in the past decade could be due to the increasing number of Hong Kong companies adopting the matrix structure explicitly or implicitly in carrying their projects. It appears that in Hong Kong industries, the influence of the Chinese culture and traditional values in attitude, behaviour and professional practices of both engineers as well as managers, is diminishing. Although the ‘withdrawal' and ‘forcing' approaches were also being used for certain types of conflict, as revealed by some of the case studies, the consequences are often recognised to be dysfunctional to team work.     

Industry financial ratios—application of factor analysis in Turkish construction industry

Turkish economy has been hit by various economical crises between the years 1998 and 2001 and the economic stagnation still continues. Past experiences in various countries show that it is vitally important to encourage construction activities in order to get out of stagnation, as construction output directly affects about 200 other sectors and industry financial ratio analysis is a means to provide a basis for the governments to undertake corrective action. However, there are over 50 financial ratios that can be used during analysis and some are more important than the others for different industries. Previous research has shown that there are about 25 factors that are important for the construction companies. This, in turn, requires elimination of unrelated data. Factor analysis is a data reduction and classification technique, which can be applied in financial analysis. Factor analysis was thus applied to the financial data collected from Turkish construction companies for a 5-year period in order to determine the financial indicators that can be used to analyse the financial trend of the industry. Five independent factors, i.e. liquidity, capital structure and profitability, activity efficiency, profit margin and growth, and assets structure were identified to be sensitive to the economical changes in the country. The results of the factor-based analysis can be used both by the government to analyse the changes in the industry with respect to time and by the construction companies to analyse their financial state with respect to their rivals.     

香港2005钢结构规范不需要假定有效长度的二阶分析和设计法

在2003年,香港特别行政区屋宇署授权由香港理工大学和奥雅纳工程顾问(香港)有限公司所组成的联合顾问进行一项用极限状态方法进行结构钢设计的顾问研究。在此项研究中,联合顾问回顾现有香港和海外的钢结构设计和建造的标准和实践,并为香港地区结构钢的使用起草一本极限状态设计规范。此规范重点放在基于性能的设计上,以给予工程师更多的自由选择。本文详述了这一规范在细长框架使用二阶分析设计方面的特点,设计中不需要对弯曲屈曲假定计算长度。规范中的这一新的可选设计方法比基于计算长度概念的现有设计方法更可靠、更有效,而现有设计方法在很多实际应用中发现有很多局限。