Three measures will be introduced to assist construction contractors, particularly small and medium sized companies, to resolve their cash flow difficulties.

Secretary for Development Carrie Lam told five contractors' associations today interim payments will be instituted in contracts which at the moment do not contain such a provision, and a mechanism will be established to speed up the valuation of variation orders for making payments.

Second, the Government will strive to finalise the accounts of works contracts completed over three years by the end of March.

Third, arrangements will be made to release part of the retention money for works projects when more than half of the works maintenance period has expired, taking into account remaining outstanding and defects rectification works to be conducted by the contractor as well as other liabilities.

For building works term contracts the current payment level will be raised from 80% to 90% of the estimated value of the works under any works order.

The associations welcomed the measures.