The Hong Kong Special Administrative Region government on Monday announced measures to plug procurement loopholes in response to a contract fraud involving supplying bottled water to government offices.
A disciplinary investigation on the scandal is set to finish by the end of this year.
In August, Xin Ding Xin Trade Co was suspected of falsely stating its bottled water was manufactured by a Chinese mainland company — Robust Group’s Guangzhou branch — after it had been awarded a three-year contract for supplying bottled drinking water valued at HK$52.94 million ($6.77 million) to government offices.
READ MORE: HK govt launches urgent review into suspected drinking water fraud
Later, the company was also found to have a HK$6-million contract to supply chemicals to the Drainage Services Department, and a HK$5-million one with the Fire Services Department for data entry services. The HKSAR government has terminated of all the contracts, and has promised to follow up on the contracts.
In a press conference on Monday afternoon, Secretary for Financial Services and the Treasury Christopher Hui Ching-yu outlined the measures proposed by a task force on reviewing government procurement regime, which was set up after the scandal to ensure greater effectiveness for officers in handling procurement matters.
Among the measures, an internal digital database for information sharing was established in mid-October. It has been recording contractors' tendering situations and contract performances in previous government procurements.
The database can leverage past procurement experiences from various departments, and serves as a government-wide procurement information portal to help identify high-risk tenderers in a more effective and timely manner, Hui noted.
An internal memorandum stipulating specific requirements on due diligence checks was issued to government officers in late August to remind them of aspects in the procurement and contract management processes. Additionally, the Government Logistics Department (GLD) has expanded the functions of its original internal audit team and reorganized it into the Procurement and Stores Management Audit Section, starting from October, to enhance scrutinization.
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The GLD, in collaboration with the Hong Kong Police Force and the Hong Kong Customs and Excise Department, organized five seminars in September to elevate public servants’ anti-fraud awareness, and over 750 officers attended.
Alice Lau Yim, a grade-A1 administrative officer who was not involved in the incident, will conduct a disciplinary investigation on the human errors identified in the case, ensuring absolute fairness, Hui said.
Some senior officials from GLD will be involved in the investigation. It will focus on determining roles and responsibilities, and whether they properly addressed issues identified during the contract process.
Contact the writer at atlasshao@chinadaliyhk.com
