Security of payment for Hong Kong construction industry

Abstract

In Hong Kong, getting paid is not always easy and the construction industry stands as an illustration of how much effort may be needed to achieve this and how adverse impacts can escalate from payment problems. At the moment, many jurisdictions have adopted some form of legislation or practical measures to enhance the ease and security of payment in the construction industry. Experience and insights from their operations provide guidance to Hong Kong for its way forward. By studying practices and feedback in other jurisdictions, this paper outlines and reviews the options and alternatives implemented for securing payment in the construction industry in Hong Kong. In addition, it also seeks to appraise their respective practicability for Hong Kong and highlight those areas to be considered if they are to be adopted or adapted for use in the Hong Kong construction industry. The ultimate aim is to provide an objective, balanced and reasoned overview for further study and discussion among stakeholders in the Hong Kong construction industry when moving forward. This is not intended to be an exhaustive review of all means adopted to achieve security of payment but aims to discuss those methods which are more likely to be suitable to be adopted in Hong Kong in the light of the circumstances and environment prevailing there. Furthermore, this study did not investigate the many modes of procurement that are available and which may address the concern of security of payment but focuses on the traditional form of contracts in use in Hong Kong. Public–private partnerships or private finance initiatives which would call for different discussions are not covered.