Hong Kong’s public spending watchdog has largely completed its report on a government drinking water contract scandal that has raised questions about the city’s tendering and due diligence procedures, the city’s audit chief has said.
Director of Audit Nelson Lam told reporters on Wednesday that the Audit Commission’s report had largely concluded, but would still have to go to the relevant government departments to confirm whether they admitted to the facts stated in the audit report.
“[We] are now working on the draft, which will be issued to the relevant departments shortly,” he said.
Lam’s remarks came after Carlson Chan went on pre-retirement leave and ceased to be director of government logistics weeks after his department was embroiled in the scandal.
Chan was under fire during his role as head of the Government Logistics Department (GLD), which was allegedly defrauded into awarding a HK$52.9 million bottled water contract to a water supplier, Xin Ding Xin Trading Co. (XDX).
See also: Gov’t logistics head Carlson Chan on pre-retirement leave following water contract scandal
The government has since axed the contract with the company and related entities, and arrested two people who own the firm. Chan has also admitted to oversight in the deal with XDX.
New accountability mechanism
Just two days before Chan went on leave, Chief Executive John Lee announced a new civil servant accountability mechanism that could subject senior civil servants, including department heads, to investigations and penalise them for deficiencies.
Lee said in August that he was “deeply disappointed” in the GLD and that the department had failed to do its job.
He told the Legislative Council (LegCo) last month that consequences for civil servants under the new mechanism would include “warnings, reprimands, not being granted a salary increment, relegation in rank, reduction in salary, compulsory retirement and even dismissal.”
Speaking on Wednesday, Lam said that the commission was “not in a position to disclose the contents of the report because we have been communicating with different departments and waiting for them to first admit to the facts.”
