Hong Kong’s urban renewal body to set up HK$100 million ‘AI-first’ tender assessment subsidiary

Hong Kong’s urban redevelopment body will spend no more than HK$100 million to set up a subsidiary that will verify tender applications using automated AI systems, in response to accusations of corruption in the wake of the deadly Tai Po fire.

The sum amounts to a third of the full HK$300 million that the government is allocating to the Urban Renewal Authority (URA) as announced in the government’s 2026-27 Budget. The funds are aimed at reforming the body’s Smart Tender scheme.

The Smart Tender system was launched in 2016 to provide property owners an electronic tendering platform for property owners to recruit contractors. By anonymising the tender procedure, the system is supposed to prevent interference and bolster competition, but it cannot control who participates in or withdraws from a tender exercise.

“[U]p to HK$100 million will be used as start-up funding to establish a dedicated subsidiary, recruit a professional team and develop an ‘AI-first’ automated workflow system for in-depth data verification and precise analysis,” URA Managing Director Donald Choi said in the body’s 2025-26 annual report, issued last week.

The remaining funds will be used to subsidise owners using the upgraded support service, the authority said.

The deadly apartment fire at Wang Fuk Court in November last year killed 168 people and displaced thousands of residents. The estate was undergoing a large-scale renovation project costing some HK$330 million when the fire broke out.

A public inquiry held this year exposed the contractor’s use of substandard materials, allegedly collusive bidding practices, and rubber-stamp inspections, as well as a toothless regulatory regime that effectively operated on an honour system.

During one of the hearings, the authority’s lawyer said that the Smart Tender platform, which anonymises the bidding process, was merely “a shield, but not a fortress” against illegal tender practice.

The URA’s Choi said in the report that the fire “drew public attention to systemic issues in the building rehabilitation sector and heightened calls for the enhancement of support services for building owners.”

To reform the tender appraisal system, the authority will set up stringent whitelists for works consultants and contractors, and conduct tendering procedures on behalf of owners.

“However, it is important to emphasise that the maintenance malpractices exposed by the fire stem from long-standing systemic shortcomings and entrenched vested interests within the building maintenance sector,” Choi said.

“Preventing similar tragedies requires concerted efforts by the Government, regulatory authorities, industry participants, relevant stakeholders and building owners to address these issues at both institutional and operational levels.”

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James Lee is a reporter at Hong Kong Free Press with an interest in culture and social issues. He graduated with a bachelor’s degree in English and a minor in Journalism from the Chinese University of Hong Kong, where he witnessed the institution’s transformation over the course of the 2019 extradition bill protests and after the passing of the Beijing-imposed security law.

Since joining HKFP in 2023, he has covered local politics, the city’s housing crisis, as well as landmark court cases including the 47 democrats national security trial. He was previously a reporter at The Standard where he interviewed pro-establishment heavyweights and extensively covered the Covid-19 pandemic and Hong Kong’s political overhauls under the national security law.