A study of the issue of bid-rigging in maintenance and renovation projects of Hong Kong residential buildings, and its impact to the community

Abstract

The District Court case of “Garden Vista” may serve as an incision point to peer into the underworld of bid-rigging issue in the residential building maintenance sector. The case has been considered as an outrageous bid-rigging saga and exposing only the tip of iceberg of rampant bid-rigging problem in the residential maintenance and renovation sector. The case may even serve as an epitome of the prevailing under-the-table operation of the sector, and roughly expose the modus operandi of this kind of fraudulent plans. In fact, if not one of the defendant, driven by unknown reasons, revealed the bid-rigging plan he might have involved, the plan is enshrined in as black-box operation that most owners could not detect even though they may have perception of such kind of malpractice from other sources. Operated within the society of a sound common law system and well-established anti-corruption mechanism, it is supposed desirably business, not only the residential building maintenance and renovation subsector, should be conducted upon a conceptual framework of level-playing field, where all kinds of irregularities should have been detected and addressed. However, the barrister of the defendant said rather blatantly and undisguisedly in the court that bid-rigging is a common but complicated practice in the sector. District Court Judge of the case, Mr. Josiah Lam, even further supplemented there is little regulation in government’s scheme to aid building maintenance, and the government’s subsidy is a powerful inducement to some unethical businessmen. The bid-rigging practice in this case had overtly and outrageously manifested a contravention of the established level-competition mechanism in the business sector. This study will analyse and explore the reasons behind bid-rigging issue in the building maintenance and renovation subsector within the construction sector, and propose measures or tactics to address the issue. The quantitative survey would provide a panoramic view of the perception of bid-rigging issue from the owners’ angle. The qualitative study will dig into the inner world and provide clues of the mechanism of bid-rigging in the subsector.