Lawmakers are calling for a special meeting of Legco's subcommittee that monitors the West Kowloon Cultural District project, after the Ming Pao newspaper revealed that the West Kowloon Cultural District Authority had been paying subcontractors directly on behalf a financially troubled main contractor.
According to the report, at least 14 subcontractors of the M+ visual culture museum were being paid on behalf of Hsin Chong Construction.
The authority explained that this was to ensure the steady progress of the project, and the money was deducted from Hsin Chong's contract.
Civic Party lawmaker Tanya Chan, the deputy chair of the Legco subcommittee, said what the authority has been doing is rare and has set a bad precedent.
"If the government has great reservations regarding the financial status of Hsin Chong, all these bids should be held. The government should take a very serious step to scrutinise or monitor the present projects that are under the control of Hsin Chong," she said.
DAB lawmaker Edward Lau, who chairs the subcommittee, said they'll urge the government and the authority to come to the legislature to explain the issue.
He said it's still unclear at this stage if the subcontractors are still being paid directly, and how much has already been paid out.
In a statement issued on July 6, the authority said "the arrangement has been successful in moving the M+ project forward" and "ensured stable employment and payment of wages for over 1600 workers currently on the site".
According to the Ming Pao report, at least 14 subcontractors of the HK$4.9 billion M+ visual culture museum were being paid on behalf of Hsin Chong Construction.
Citing internal documents, Ming Pao said the Authority started paying the subcontractors from February last year following a request by the contractor's parent company, Hsin Chong Group, which is saddled with financial troubles and had its licence suspended more than a year ago.
According to filings to the Hong Kong Stock Exchange, Hsin Chong Group has fallen behind on its debt payments and its shares have been suspended from trading since April last year. It recorded a loss of HK$2.7 billion in 2016 and another of HK$774 million last year.
On its website, Hsin Chong Group says it was responsible for the construction of several casino resort projects in Macau such as the Parisian, the Venetian and the Sands.
Ming Pao said the authority paid one of the subcontractors, Gammon, more than HK$2.6 million. But it's unclear at this stage if the subcontractors are still being paid directly, and how much has already been paid out.
In a statement, the government said the West Kowloon Cultural District Authority has been aware of the financial problems facing Hsin Chong since late 2016. And to make sure the M+ project goes according to plan, the authority has developed a risk mitigation plan to pay sub-contractors directly.
Last updated: 2018-07-16 HKT 22:53