In response to Paul Y Engineering Group's application for provisional liquidation, the Development Bureau today said it is believed the impact of Paul Y’s situation on relevant public works projects is manageable and it will closely monitor the situation.

The Government noted that an application was made by Paul Y to the court recently to appoint a provisional liquidator for its five subsidiaries to handle debts and formulate a restructuring plan, and the court approved the application today.

As there have been market rumours and media reports of financial difficulties and layoffs at Paul Y for some time, the Government has been paying close attention to the situation and making preparations to reduce the impact on works projects and subcontractors and assist the affected employees.

Paul Y's subsidiaries are undertaking the construction of 13 public works contracts, among which 12 are undertaken by Paul Y and other construction companies by way of joint venture.

These contracts are managed by government departments including the Civil Engineering & Development Department, the Architectural Services Department, the Electrical & Mechanical Services Department, the Highways Department, the Drainage Services Department, the Water Supplies Department and the Environmental Protection Department.

As the majority of the contracts are undertaken by joint ventures, regardless of whether Paul Y is liquidated eventually, the other participants of the joint venture contracts must complete the remaining works in accordance with the contract requirements.

The bureau has assessed that the joint venture participants concerned are capable of undertaking the remaining works, and they have also expressed that they will continue to execute the contracts. The only project solely undertaken by Paul Y has largely entered the completion stage.

On the other hand, Paul Y has also undertaken works projects of other public organisations, some of which are undertaken by joint ventures. The bureau said it is believed the impact is manageable.

For other projects solely undertaken by Paul Y, the public sector owners have replaced the main contractor of most of the projects in accordance with the established mechanism to ensure their smooth completion. Owners of a few other projects are also carrying out such arrangements to minimise the impact on the projects.

The bureau said that as the majority of the government and public sector projects will be undertaken by other participants of the joint ventures or have the main contractor replaced in accordance with the mechanism, if Paul Y is liquidated by the court eventually, the succeeding contractor will follow the Government and public sector owners’ request to try to accommodate the situation of existing subcontractors and workers so that they can continue to work on the projects for the sake of maintaining continuity.

Employees of Paul Y and its subcontractors who have enquiries on their employment rights and benefits may call the Labour Department's dedicated hotline at 3580 8721 or visit the branch offices of its Labour Relations Division.