Financial and social costs of construction accidents Dr. S.L.Tang Associate Professor Civil & Structural Engineering Department The Hong Kong Polytechnic University

Financial costs – What are they? 1. Losses due to the injured worker(s). 2. Losses due to inefficiency of the worker(s) who just recovered from injury upon resuming work. 3. Losses due to medical expenses. 4. Losses due to fines & legal expenses. 5. Losses of productivity of other employees.

Financial costs – What are they? 6. Losses due to damaged equipment or plant. 7. Losses due to damaged materials or finished works. 8. Losses due to idle machinery or equipment.

Accident costs & safety performance Accident Loss Ratio (ALR) ALR = TC of Accidents / Contract Sum *100

Safety Investment 1. Safety administration personnel 2. Safety equipment 3. Safety training & promotion

Safety investment & performance Safety Investment Ratio (SIR) SIR = Total Safety Investment / Contract Sum * 100%

ALR & SIR curves combined

Results of findings 18 projects with a total of 576 accidents. Minimum point of Total Cost Ratio Curve = 1.2% of contract sum Safety investment corresponding to the minimum point = 0.8% of contract sum

Social Costs – What are they? 1. The productive years of the injured workers. 2. Families and relative losses. 3. Fire Department & rescue services. 4. Losses due to medical expenses & hospitalization.

Social Costs – What are they? 6. The Social Welfare Department. 7. The Hong Kong Police Force. 8. The Court. 9. The Legal Aid Department.

Methodology Questionnaires & interviews to 19 public departments – to find safety investments & costs by the public sector. Questionnaires & interviews to contractors – Find safety investments & costs by contractors.

Government departments that have incurred social losses due to construction accidents: 6 departments: - Court - Fire Services Department - Hong Kong Police Force - Hospital Authority - Legal Aid Department - Social Welfare Department

Government departments that have contributed to social safety investments: 13 departments: - Architectural Services Department - Building Department - CITA - Civil Engineering Department - Occupational Safety & Health Council (OSHC) - Drainage Service Department - Highway Department

Government departments that have contributed to social safety investment: 13 departments (continued): - Housing Authority - Industrial Center (HKPU) - Labour Department - Territory Development Department - Vocational Training Council - Water Services Department

Results April 1998-March 1999April 1999-March 2000April 2000-March 2001 Total Financial cost before ratio $ 4,550,219.4 $ 2,496,464.9 $ 2,642,125.8 % representative After ratio $ 85,861,636.3 $ 55,220,708.5 $ 44,683,710.3 Government cost Government Departments HK PoliceFire Services DeptCourt Hospital AuthoritySocial Welfare DeptLegal Aid Dept Total Government Cost $ 14,741,932.2 $ 14,600,397.8 $ 14,240,666.5 Social costs of accidents $ 100,603,568.5 $ 69,821,106.3 $ 58,924,376.8 Total construction output $ 99,830,000,000.0 $ 92,640,000,000.0 $ 87,394,000,000.0 % of total construction output Delta cost0.0254Delta cost0.0079

April 1998-March 1999April March 2000April March 2001 Safety investment by contractors $36,127,712.1$28,786,899.4$35,565,639.1 % representative After ratio$681,721,961.6$636,753,590.6$601,487,139.3 Safety investment by Government Government Departments Highway DeptIndustry Center (HKPU)Civil Engineering Dept Drainage Service DeptWater Service DeptLabor Dept Building DeptCITAHousing Authority Territory Development DeptConstruction Health & Safety Council (OHSC) Architectural Service Dept Vocational training Council Safety investment by Government $62,437,161.0$73,541,069.8$71,922,182.8 Total safety investment$744,159,122.6$710,294,660.4$673,409,322.1 Total construction output $ 99,830,000,000.0 $ 92,640,000,000.0 $ 87,394,000,000.0 % of total construction output Delta investment0.0213Delta investment0.0038

Graph of Social Cost & Safety investment as % of construction output in respective years

Results Delta reduction of social cost / Delta increase of social investment: For every $1 of social safety investment, about $1.6 of social cost of construction accidents can be reduced. Year 98/99 vs Year 99/00 Year 99/00 vs Year 00/ / = / = 2.081

These results are very preliminary because: Target: at least 10% of construction output. Therefore, further data collection is necessary and is being done. 98/ % of construction output 99/ % of construction output 00/ % of construction output

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