Hong Kong authorities will offer more incentives to the private sector to encourage the use of a prefabrication construction technique and will also explore investing in supply chains, amid concerns from lawmakers that the process is suffering from limited uptake.
Secretary for Development Bernadette Linn Hon-ho said on Tuesday that only 69 public projects and two private initiatives had adopted the “modular integrated construction” (MiC) technique since authorities introduced it in 2018.
The method employs free-standing, integrated modules from a mainland Chinese factory that undergo quality inspections before being installed at the project site.
“The private sector is still observing this new technique. We envision it can provide impetus to the private sector if the government can take on a leading role, especially when we are lacking construction labour,” Linn told the Legislative Council’s development panel.
Linn said the technique could save manpower as the construction process largely took place in factories rather than at the project site, noting Hong Kong expected to record a manpower shortage of more than 40,000 workers in 2027.
The minister also sought to address concerns from a legislator about the lack of incentives concerning old land lots to encourage the private sector to adopt the method, stressing the government would “respond positively”.
Louis Loong Hon-biu, a lawmaker who represents the real estate sector, said the current incentives, such as granting a 10 per cent gross floor area concession for relevant projects, failed to cover 999-year land leases granted decades before the city returned to Chinese sovereignty in 1997.
“At the moment, this policy has not covered lots with old leases … The government cannot ignore this as it promotes the technique,” he said.
Under the current system, a standard land lease in Hong Kong lasts for 50 years.
The minister also noted developers felt the MiC method had limitations since each flat’s size was determined in the manufacturing process and was unlikely to be modifiable in response to market changes.
Lawmaker Andrew Lam Siu-lo, deputy chairman of the Legco panel, urged the government to improve its existing regulations to help encourage the private sector to adopt the construction technique.
A government paper submitted to the panel said authorities plan to annually outline all coming MiC projects taking place in the next five years, strengthen training in the technique and implement a manufacturer certification scheme.
A northern portion of the New Territories comprising 15 hectares would also be reserved for testing and certifying the technique, conducting technical research, as well as producing and storing the modules, the government wrote.
Authorities would also gauge the feasibility of investing in a MiC supply chain by the end of this year, as well as explore the product overseas, according to the paper.
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Linn touched on legislators’ concerns over the lack of space for manufacturing and storing the modules, saying the city’s scarce land supply meant it would mainly focus on research and development.
The need for storage space could be kept to a minimum if the city handled the logistics well, she added.
The development chief said authorities would establish a government-owned company called the “Building Testing and Research Institute” this year to devise standards for the process, conduct tests and provide accreditation.
According to the latest budget from February, Hong Kong authorities plan to work with their counterparts in the Greater Bay Area to develop the MiC industry.
The bay area refers to Beijing’s initiative to turn Hong Kong, Macau and nine mainland cities into an economic powerhouse.
