tim's experiment

The French government which seized power in 1848 became notorious for paying people to dig holes, and paying other people to fill them in. This was considered a controversial way of reducing unemployment even then, and the government concerned was soon overthrown by Napoleon III. However its spirit lives on in Frederick Ma Si-hang, the chairman of the MTR Corporation. Mr Ma has been campaigning for the Legislative Council to fund the cost over-runs of the MTR’s baby, the Express Rail Link. You might have thought that Mr Ma would have devoted some attention to the alleged merits of the project: its important role as a link, a tourist attraction, an architectural ornament, or whatever. But, at least according to the items in last week’s newspapers, Mr Ma did not take this course. Instead he warned that up to 7,000 people in the construction industry would lose their jobs if the project was aborted.

This struck me as a rather odd use of language. It is a commonplace in the construction industry that workers are taken on for a project, with no guarantee of continued employment after the work on the project stops. Whether the project is finished or cancelled does not make any difference; when work stops you’re on the street. So these 7,000 people for whose prosperity Mr Ma expresses such concern are the people who would have been sacked without apology or compunction last year if the project had finished on time. They are still working because it is running late. It is not necessarily their fault that it is running late, but the fact that they are still working on it is in a sense an unexpected bonus. The question is whether they get an extra two or so years added to the expected contract period or only one. This is no doubt a matter of considerable importance to the people concerned but it hardly seems to merit the “jobs at stake” headlines which Mr Ma was angling for.

Mr Ma’s other original contribution to the argument was the suggestion that if the project were cancelled then international contractors might “give Hong Kong a bad name.” I can believe that. International contractors would no doubt like to believe that Hong Kong people are a bunch of gullible suckers who will continue to pour money into a hole in the ground however late or over budget the hole may be. Does having a bad name means having a reputation for axing projects which are missing the date and price promised? Bring it on.

Also weighing in on the construction industry’s employment needs last week was the president of the Hong Kong Construction Subcontractors Alliance, Lawrence Ng San-wa. Mr Ng picked up a broader brush, complaining that the Legco log-jam was threatening the approval of a large number of government projects. If these were cancelled the Construction Industry Alliance had estimated that 20 per cent of the 400,000 people who work in the sector could be thrown out of work. Picking up this point Mr Ng asserted that “taking into account the family members of those affected employees, the affected people would be as much as 1.4 million”. This casts an interesting light on family sizes in the construction sector. One fifth, or 20 per cent, of 400,000 people is 80,000. If we divide Mr Ng’s 1.4 million affected family members by 80,000 we come to an average size per worker of 17.5. This is not terribly convincing. Even if we assume that every construction worker is married and supports both his and his wife’s parents we are still asked to believe that the average number of kids in construction families is 11.5, compared with 1.5 for the population generally. Are people in the construction industry breeding like rabbits? Or does Mr Ng need a new calculator?

Together with the talk we also had some figures. The upshot of these is that we can still save something over $10 billion by cancelling the rail link. And that disregards the possibility that the vacant hole in West Kowloon can be turned into something that makes better economic sense than a loss-making railway line. So the question before Legco is quite simple. Do we want to blow another 10 billion on a political gesture masquerading as an infrastructure or can we think of something else to do with the money? I fear we all know what the eventual answer will be.

Meantime Messrs Ma and Ng need to get their heads round the point that the purpose of government infrastructure projects is not to provide employment to workers in the construction industry. If the nicest thing you can think of about a project is that large numbers of people are employed building it, many of us will suspect that its other merits are imaginary.