Hong Kong has a scarce supply of land for its population. This shortage of land naturally means, however, that land prices are high, and that people often have to lavish their lifetime’s savings on buying an apartment. If a hard earned apartment turned out to be substandard, the owner would be devastated. Jerry-building for quick profit could turn people’s dreams of owning a safe, comfortable home into a life threatening nightmare.
In 1997, Hong Kong embarked on a massive public works programme. Although Hong Kong’s economy had been impacted by the Asian financial turmoil that began in October 1997, public housing construction remained intensive from 1998 on. A series of scams related to substandard works, including short piling, soon surfaced, however. In three years from 1998 to 2000, the ICAC initiated 142 prosecutions in cases of corruption and fraud involving substandard construction works.
(Arranged in the order in which the ICAC operations were publicized.)
Operations
The ICAC commenced investigations upon receiving a report of suspected corruption in early 1998. 13 persons were arrested in July 1998.
Incidents
his incident involved corruption connected with the construction of short piles. Eighty-three out of the 87 piles constructed were shorter than the prescribed length by 1 m to 15 m. Twelve persons were charged. Eight of them, including a commercial diver, were sentenced to jail terms ranging from 12 to 44 months.
Operations
The ICAC conducted an investigation in early 1999 after receiving a report from HD. Ten persons were arrested in January 1999.
Incidents
Four persons were charged with deceiving HD by accepting advantages, falsifying pile lengths, swapping steel bar samples for testing, falsifying test reports and concealing the non-compliant piling foundations of a shopping arcade and a car park. Three persons were acquitted and one was jailed for eight months.
Operations
The ICAC conducted an investigation in early 1999 after receiving a report from HD. Ten persons were arrested in January 1999.
Incidents
Four persons were charged with deceiving HD by accepting advantages, falsifying pile lengths, swapping steel bar samples for testing, falsifying test reports and concealing the non-compliant piling foundations of a shopping arcade and a car park. Three persons were acquitted and one was jailed for eight months.
Operations
The ICAC conducted an investigation upon receiving a report from HD. Six persons were arrested in November 1999.
Incidents
An employee of a subcontractor and its company director were sentenced to terms of imprisonment ranging from 27 to 48 months.
Operations
Upon receiving a complaint from HD in December 1998, the ICAC conducted an investigation and arrested eight persons in January 2000.
Incidents
A settlement monitoring survey discovered severe short piling in the foundation works. Two HOS buildings that had already reached well above 30 floors and had to be demolished. One site agent was jailed for 42 months and two company directors were jailed for 12 years (later reduced by two years on appeal.)
Operations
The first short piling scam discovered on a private development site. The ICAC conducted an investigation after receiving a complaint. Three persons were charged in May 2000.
Incidents
Having been found guilty of offering and accepting bribes, having conspired to use H-piles instead of bored piles, and having failed to drill piles down into the bedrock, a director and an engineer of the main contractor were jailed for 60 months and 48 months respectively.
Operations
The ICAC conducted an investigation upon receiving a corruption report. Six persons were arrested in May 2000.
Incidents
An engineer and an engineering manager used unqualified steel bars to defraud HD. They were sentenced to jail for 21 months and 42 months respectively.
Operations
The ICAC carried out an investigation upon receiving a corruption report. Three persons were charged in July 2000.
Incidents
In this case, 34 out of 84 piles failed to meet the prescribed length. It was shown that the engineering staff used a rigged measuring tape to assist them in providing HD with false records of pile lengths. One person was sentenced to jail for 21 months.
Operations
HD referred the case to ICAC in 1999 after discovering the short piles. ICAC arrested 20 persons in February 2001.
Incidents
HD discovered short piles after observing unusual settlement at the site after it had proved very difficult to install lift shafts. Two persons were sentenced to jail for 58 months. The necessary remedial works carried out by HA cost some $250 million, thus tripling piling costs.
Instances of non-compliance in construction works for public housing gradually came to light from 1999 on. In the Housing Authority (HA) Home Ownership Scheme (HOS) project at Phase 1 of Tin Chung Court, a few months prior to the project’s planned occupation, a severe degree of short piling was suspected, and this was confirmed when the unusual settlement condition of the building had made it difficult to install lift shafts. HA had to spend some $250 million to rectify the defective piles and ensure the building’s structural safety. The incident aroused great public concern, leading HA to initiate a comprehensive settlement monitoring survey for all buildings in their projects.
On 8 December 1999, the monitoring survey indicated abnormal foundation settlement at two HOS buildings that were still under construction at Yuen Chau Kok in Sha Tin. An expert was called in to carry out independent investigations, and found that out of 36 large diameter bored piles for two buildings, only four met the requirements. Twenty-one were shorter than the prescribed length by 2 m to 15 m, while eleven were resting on soft mud instead of bedrock. In other words, an astonishing 90 percent or so of the bored piles in these two buildings failed to comply with standards and the already extensive superstructure was being supported by the only 10 percent of bored piles that were fully compliant.
When the short piling was discovered, the two HOS buildings had already been constructed up to their 33rd and 34th floors respectively. The case aroused huge concern in the community. Eventually on 16 March 2000, HA announced that the two buildings would be demolished in the interests of safety. In this one incident alone, public funds amounting to some $605 million had been squandered2.
It is frightening to contemplate the fact that if the short piling had not come to light, as many as 656 households would have been placed in grave peril. The site was eventually turned into a leisure park.
| Direct expenses incurred by HA (including payments, demolition fees, investigation fees, and material costs arising from the termination of works) | $212 million |
| Damages claimed by the superstructure contractor for the two buildings | $65 million |
| Net assets lost | $328 million |
| Total | $605 million |
2 Statement on Arbitration between Housing Authority and Zen Pacific relating to the Yuen Chau Kok Short-Piling Case