Engineers: The party’s over – who stole the punch bowl

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Tough times lie ahead for the engineering sector as filibuster in LegCo is likely to endure, delaying projects – and hiring. Engineers may end up fighting for boring, low paying jobs – or leave the profession altogether. Photo Credit: Chris Lusher

There was a time when engineering students in Hong Kong enjoyed at least one or two job offers upon graduation. But for newcomers who think the fairy tale will last, the death knell of the Public Works Subcommittee is turning their employment carriages into pumpkins again.

A decade ago, Hong Kong’s infrastructure industry was in dire straights. In the hope of saving its construction and engineering sectors, the Government, under Donald Tsang’s administration put forth ten major infrastructure projects – many of which are in full swing now. Since then, the annual estimated expenditure on capital works has doubled from an average of around $29 billion in the late 2000s to more than $70 billion in recent years.

The revival of the construction industry can also be reflected by the number of engineering students in universities. In 2014, there were a combined 18,000 students enrolling in Engineering (general) in the University of Hong Kong, the Chinese University, the University of Science and Technology and the Polytechnic University. The figure stood at 13,000 back in 2008, a 39%  increase in just six years.

The prospects of a young engineer are quite attractive. A fresh graduate in Engineering can earn more than $19,000/m working for the Government, $20,000/m plus bonus as a consultant and as high as $28,000/m plus bonus as a contractor. This seems to suggest that there is reward in this investment – so far.

“Those affected first and foremost would be civil and environmental consultants; …then logically contractors would bear the brunt.”—Victor Cheung, President of the Hong Kong Institution of Engineers

and famine
However, four of the major infrastructure projects have been re-scheduled for completion by 2017 (after delays are taken into account) and most will wrap in the early 2020s. This implies that by the time today’s first-year engineering students graduate, almost all projects would have passed their construction peaks.

Some may even choose to become construction workers. Salaries for starting construction workers are almost as good, or sometimes better, than for fresh graduate engineers. The aging of  the construction workforce means many from a hardier generation will be leaving the profession with only air-conditioned, pampered academics from universities to fill the ranks. There is no expectation of a glut of construction workers – it is the degree holding youth who needs beware.

Tap closed
Business and Professionals Alliance’s Lo Wai-kwok, who represents the Engineering constituency, explains to HT that the main problem faced by the sector right now is not insufficient projects. but serious delays owing to filibusters in the LegCo’s Finance Committee and Public Works Subcommittee.

“There is an annual $180 billion worth of ongoing projects by the Government and private sector combined,” Mr Lo says.

Apart from the ten projects, the Government has put forth a railway development strategy with an estimated cost of $110 billion in 2013 prices, new waste treatment facilities, expanded public housing, as well as the controversial third runway and related works.

“Therefore, under normal circumstances, oncoming projects should be able to sustain the level of demand for engineers in the medium term.”

No expectation of a glut of construction workers – it is the degree holding youth who needs beware.

There are plenty of reasons for the engineering sector to be worried about filibusters in LegCo. The Finance Committee only approved $3.6 billion worth of new projects last term while the figure was $90.9 billion in 2012/2013 and $ 160.7 billion in 2011/2012. The authorities issued a mere 18 public tenders with a value of $18.2 billion compared to about 50 tenders totalling $50 billion in the previous year.

The cull
A few weeks ago, one of the most prominent government contractors, Gammon Construction, reportedly sacked more than 200 of its staff, many of which are mid-level engineers, and put the blame on radical lawmakers.

Victor Cheung, President of the Hong Kong Institution of Engineers, shares Mr Lo’s view. He claims some construction firms are also on the verge of letting go staff.

“If the delayed projects are still in planning stage, the Lantau development plan for instance, then those affected first and foremost would be civil and environmental consultants; if the projects are stuck in the process of contract awarding by the Finance Committee, then logically contractors would bear the brunt.” Mr Cheung says.

“The big firms will be the first to feel the crunch, followed by the smaller subcontractors. It’s like a domino effect,” he adds.

Blame the Administration
On the other hand, radical lawmakers tend to see the current deadlock as a result of subpar administration and hidden political missions.

“Delays and over-budget aside, many of the infrastructure projects have been poorly planned.”—Long Hair,  Legislator

When asked how filibusters in Finance Committee and the Public Works Subcommittee can come to an end, ‘Long Hair’ Leung Kwok-hung from the League of Social Democrats argues the responsibility is on the Government to admit its wrongdoings in the first place.

Mr Leung criticises, “Delays and over-budget aside, many of the infrastructure projects have been poorly planned. The authority also tend to exaggerate the socio-economic benefits brought about by the works. Why would you need to build two control points at the same time in the forms of Hong Kong-Zhuhai-Macao Bridge and Liantang/Heung Yuen Wai boundary point without making any assumption that the flows would overlap?”

If filibustering becomes the ‘new normal’, engineers could find themselves falling victims of yet another political game between the Government and the pan-dems, and could only hope for the best in next term’s Finance Committee reshuffle. That being said, layoffs and wage cuts seem inevitable.

The only way out
Fresh graduates with foresight may opt for Government offers despite tougher requirements and lower salaries. One of them says that in face of uncertainty in the market, designing certain drainage stations may be more attractive than overseeing mega-bridges and railways.

In the long run, it may simply be unsustainable to keep the current level of investment on infrastructure projects. Considering the city’s physical size, Mr Leung doubts if there is any country that has spent as much on infrastructure projects over the past few years as Hong Kong has. Engineers may find themselves having to choose between safe and secure or exciting and well-paying – if they can stay in the profession at all.