Media: Corruption became an important cause of fire in Hong Kong

Corruption in the construction business involved in building renovation has become a significant cause of the fire in Hong Kong that claimed at least 156 lives.

As BAKU.WS reports, this opinion was expressed by experts in the South China Morning Post newspaper.

"The worst fire in Hong Kong in seven decades has revealed the disgusting secret of a dirty and predatory building renovation business that suffers from bid rigging and skyrocketing prices," believe the newspaper's sources. In their opinion, Hong Kong's building renovation market often attracts unscrupulous companies.

As noted by Ricky Wong, CEO of investment consulting company King Value Realty, the megacity's aging housing stock is a "gold mine that can be easily exploited by unscrupulous contractors." According to official data, at the end of 2022, Hong Kong had approximately 9,600 buildings. Every year, authorities require about 600 properties aged 30 years and older to hire contractors to perform necessary repair work.

"Since Hong Kong has so many buildings that are already 40-50 years old, they need to undergo major renovations. Many contractors view this market as a huge piece of 'fat pork,' incredibly profitable. They desperately want their share. The profit can be enormous," explained Ricky Wong.

According to Chiu Yan-loy, founder of the Property Owners Alliance Against Fraud, a common unethical practice involves a consulting company first obtaining a contract at a low price and then working with the relevant contractor to complete repairs at a price significantly exceeding the actual costs. Experts point out that unscrupulous contractors "first offer low prices, and then add costs here and there," using cheap, low-quality materials.

Meanwhile, the principle of awarding contracts to the lowest bidder has led to a "survival race" that undermines safety and quality. "If quality work costs 10,000 Hong Kong dollars, including labor and overhead, and someone takes it for 8,500 Hong Kong dollars, how do they do it? Either [poor quality] materials or saving [on work quality]," believes Chau Lin, chairman of the Hong Kong Renovation Specialists Union.

Documents show that the renovation budget for the burned Wang Fuk Court complex increased dramatically from 152 million Hong Kong dollars (19.5 million US dollars) in the preliminary tender analysis to 336 million Hong Kong dollars (43 million US dollars) after the contractor was selected. Millions in additional expenses were provided for, including drainage systems and fire safety.

Preliminary investigations revealed that the cosmetic repairs used low-quality and cheap protective construction nets that did not meet fire safety standards, as well as flammable polystyrene foam panels to seal windows. This caused the glass in apartments to shatter during the fire, letting flames inside. Experts also indicated that it was the low-quality nets and polystyrene, not the bamboo scaffolding, that became the main cause of the fire's rapid spread.