LCQ11: The award of glass management contracts
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Question:
To tie in with the implementation of the producer responsibility scheme on glass beverage containers, the Environmental Protection Department invited tenders for three glass management contracts in February last year to provide regional glass container collection and treatment services covering the catchment regions of (i) Hong Kong Island and Islands District, (ii) Kowloon and (iii) the New Territories respectively. The tender results were announced in November last year. The two glass management contracts relating to Hong Kong Island and Islands District and the New Territories were awarded to the same company, whereas the contract relating to Kowloon region was re-tendered in the same month. In this connection, will the Government inform this Council:
(1) of the considerations and justifications for the aforesaid decision on re-tendering;
(2) of the organisations currently responsible for the recycling of glass in Kowloon region, and the timeframe for the provision of the service by the organisations concerned;
(3) whether it has assessed the award of the aforesaid two glass management contracts to the same company has given rise to a monopoly; if it has, of the assessment outcome and the improvement measures; if not, the reasons for that; and
(4) given that it is difficult for small recycling enterprises to be eligible to bid for the aforesaid glass management contracts, of the means the authorities have to assist those enterprises in bidding for such contracts in future?
Reply:
President,
The Environmental Protection Department (EPD) has been actively undertaking the preparation work for the producer responsibility scheme on glass beverage containers with a view to implementing it fully in 2018. In this regard, the Government conducted an open tender exercise in early 2017 for hiring suitable glass management contractors (GMCs) to undertake waste glass container collection and treatment services for the catchment regions of Hong Kong Island (including Islands District), Kowloon and the New Territories respectively. While the tendering exercises for three contracts were conducted concurrently, they were separate contracts and were processed individually according to the terms set out in the respective tender documents.
My reply to the question raised by the Hon Lam Cheuk-ting is as follows:
(1) In line with the general practices as adopted in other open tender exercises, the EPD assessed and evaluated the Technical Proposal and Financial Offer of the tenders in accordance with the principles and procedures set out in the tender documents approved by the Central Tender Board, and selected the successful tenderer according to the tender acceptance rules stipulated in the tender documents. But the Government has reserved the right not to award the contract in consideration of public interest, having regard to factors such as whether the contract is value-for-money and whether the relevant policy objective could be achieved. In the present case, after completing the above assessment process for the open tender, the Government announced in early November 2017 the tender outcomes in respect of the two glass management contracts for the catchment regions of Hong Kong Island (including Islands District) and the New Territories. As for the contract for the Kowloon region, having considered the tender assessment outcome and the tender acceptance rules stipulated in the tender documents, as well as the views of the Central Tender Board, the EPD considered that the tender concerned did not meet the value-for-money expectation and it would not be in the public interest to award the contract. The EPD therefore decided to cancel the tender. The contract for the Kowloon region was immediately re-tendered in mid-November 2017. The tendering exercise is now underway and we expect to complete the exercise and award the contract in the second quarter of 2018.
(2) The Kowloon region was originally served by several voluntary glass container recycling programmes funded respectively by the EPD, the hotel industry and the Environment and Conservation Fund. In view of the re-tendering of the glass management contract for the Kowloon region, the EPD has been working to maintain the glass container collection services in the Kowloon region before the glass management contract is awarded through the Kwun Tong and Sham Shui Po Community Green Stations and through extending the EPD's existing contract for glass container collection services. As regards the collection points at the few hotels, bars and restaurants in the Kowloon region, as the parties originally providing collection services were unable to extend their services, we have arranged for the GMC responsible for the other two catchment regions to temporarily take up the services. Upon award of the glass management contract for the Kowloon region, the relevant GMC will take over the collection services accordingly.
(3) In making the arrangement for the waste glass container collection and treatment services, the Government divided the whole territory into three catchment regions and intended to hire up to three GMCs through open tender to serve each of the three catchment regions. This is to avoid over-reliance on a single contractor to provide glass container recycling services for the entire territory, while taking account of the need to achieve economy of scale and cost-effectiveness of the relevant services. To this end, the Government has set out in the tender documents that a single tenderer would not be awarded more than two contracts under normal circumstances. In the event that a tenderer had the highest combined score in all three contracts, the Government would award two of the three contracts to that tenderer in consideration of the overall costs of the contracts, while the remaining contract would be awarded to the tenderer with the second highest combined score in that combination. But the Government reserved the right not to award any contract in consideration of public interest. In addition, in the re-tendering of the contract for the Kowloon region, similar terms were stipulated in the tender documents to ensure that the current GMC for Hong Kong Island (including Islands District) and the New Territories, under normal circumstances, would not be awarded the contract for the Kowloon region to avoid monopoly in service provision.
(4) In the re-tendering exercise of the glass management contract for the Kowloon region, we had reviewed and adjusted the basic requirements of the tender in order to promote competition in the bidding process. For example, we have suitably relaxed the requirement of length of experience in providing waste or recyclables collection services within the past two years from one year to six months, which would allow enterprises with lesser experience (including small and medium enterprises) to meet the requirements for participating in the re-tendering exercise.
Ends/Wednesday, March 28, 2018
Issued at HKT 12:30
Issued at HKT 12:30
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