Hong Kong Chief Executive John Lee has expressed disappointment over the Government Logistics Department’s oversight in signing a now-terminated HK$52.9 million contract with a company suspected of fraud to supply drinking water to civil service offices.
The logistics department, which has been in hot water since the contract scandal emerged earlier this month, faced fresh criticism from the Hong Kong leader on Saturday. The blunder, Lee said, reflected that government staff needed to improve their observation skills, cautiousness, and ability to detect potential fraud.
“I am extremely concerned about the Logistics Department’s failure to do its job. While the successful bidder provided false information, I am deeply disappointed that this happened in a professional department that handles procurement every day,” Lee told the press in Cantonese on Saturday after visiting the Kwun Tong district, as part of a consultation exercise for his 2025 Policy Address to be delivered next month.
The Hong Kong leader vowed to identify shortcomings and loopholes in the government’s procurement regime as soon as possible, after the contract scandal sparked concerns over the authorities’ vetting process.
See also: Hong Kong logistics chief apologises for bottled water scandal oversights
Lee backed the Financial Services and the Treasury Bureau’s approach of inviting the Audit Commission to find inadequacies in the existing regime, saying the commission would be an independent and credible body in leading the probe.
Lee also supported the decision to axe six contracts with companies tied to Xin Ding Xin Trading Co, the firm at the centre of the contract blunder. The company was found to have no relationship with the Guangzhou supplier it claimed to be sourcing water from, having instead obtained the product from a different supplier in Dongguan.
“If human factors are involved, including negligence, we will handle the matter seriously and impartially in accordance with civil service management rules,” Lee said.
‘No difference in quality’
In June, Lee had proposed implementing a new accountability system to monitor the performance of senior civil servants, suggesting permanent secretaries and directorate-level officials could face penalties such as pay freezes or salary cuts for poor performance or mistakes.
When asked if any official had to take responsibility for the contract blunder, Lee repeated that they would have to wait for the Audit Commission’s report to see if any mistakes were made by the government employees involved and the reasons for their mistakes – such as whether it was an issue of ability or negligence.
Lee added that the government has to ensure every dollar of public funds is used appropriately, but that this does not mean choosing the bidder with the lowest price during a public tender exercise. Authorities must also consider whether it offers “value for money” and select a contractor that provides the “highest social value.”
On Sunday, Secretary for Financial Services and the Treasury Christopher Hui was asked if the contract blunder would hurt public confidence in Mainland Chinese drinking water brands.
Hui responded by saying authorities had conducted tests on drinking water samples to detect microbial and metal content. He said brands from both Mainland China and Hong Kong were able to meet the standards, and there was “no difference in quality” between Mainland and Hong Kong products.
He did not answer questions as to whether the government would mainly choose local drinking water brands in future tender exercises.
