Recently, reports of fraudulent drinking water suppliers at Hong Kong SAR government offices have drawn public attention. Legislators are calling for stricter tendering and certification procedures, and for test reports to be labeled with QR codes to help verify the authenticity of the agencies, to prevent similar issues from recurring.

In June of this year, the Logistics Services Department (LGD) awarded the bottled drinking water supply contract for government offices on Hong Kong Island and some outlying islands to Xin Dingxin Trading Co., Ltd. (Xin Dingxin) through open tender. The contract was for 1.88 million bottles of "Xinle" drinking water for HK$52.94 million, with a term of 36 months. During the same period, the GLD awarded the Kowloon supply contract to Watsons Group (Hong Kong) Limited for 2.001 million bottles of "COOL" drinking water for HK$47.6238 million; and the supply contract for the New Territories and parts of Lantau Island to Time Trade International Co., Ltd. for 2.519 million bottles of "Happy Xishi" drinking water for HK$65.494 million.

Xinle and Happy Xishi are mainland brands. According to the "Xinle" packaging, the product is packaged by "Xin Dingxin" and manufactured by "Robos," "Guanyinshan Drinking Water," and "Yangtaishan Beverage."

Civil servants' lack of trust in the unfamiliar, repeatedly blacklisted brand "Robos" has drawn public attention.

On August 3, following the regional consultation meeting on the 2025 Policy Address, media outlets questioned Chief Executive John Lee regarding drinking water safety.

Chief Executive John Lee stated, "Regarding the issue of drinking water, we take safety very seriously, and the tendering system clearly demonstrates our stringent requirements. First, any tenderer must have a certification, a mandatory requirement for water quality certification from an independent laboratory. Furthermore, we have a system in place requiring re-certification at various times, not just once at the time of tender, once the safety certification is established. We will request re-certification from time to time. In fact, we also have a random inspection system, with the relevant authorities periodically testing water quality. If any non-compliance is found, we can immediately terminate the contract. Our safety standards in all aspects of our system are stringent, and they are global standards. Therefore, I am confident that the entire system is effective and strictly enforced."

However, the situation quickly changed. Robust proactively wrote to the Logistics Department, stating that it had never supplied or authorized anyone to supply drinking water to the Hong Kong government and had no business dealings with the winning bidder.

On August 16, the Logistics Department stated that it was unconvinced that Xin Dingxin could continue to perform the contract and had decided to suspend the contract in accordance with its terms.

On August 20, the Hong Kong government announced that it had immediately terminated all contracts associated with the person in charge of Xindingxin Trading Co., Ltd.

Despite significant issues with the contract, government laboratories have confirmed that samples of the bottled water involved have not yet been tested and are safe to drink.

Following the revelation of the incident, widespread skepticism has emerged about the Hong Kong government's lax procurement process, focusing solely on the "lowest bidder wins" principle while neglecting to verify bidder qualifications, brand authorization, and the authenticity of test reports. Wong Chun-shek, a Legislative Council member from the accounting sector of the Democratic Alliance for the Betterment and Progress of Hong Kong (DAB), pointed out that the bottled water bidding fraud incident highlights the need for the SAR government to strengthen its audit procedures during the tendering process. In this case, Xin Dingxin not only allegedly falsely claimed that the bottled water manufacturer was Robust (Guangdong) Co., Ltd., but also submitted a suspected fraudulent water quality test certificate to the government. This highlights the risks inherent in the report verification process during the procurement process. He suggested that the government strengthen inspections, such as requiring the inclusion of technological identifiers such as QR codes in test reports to facilitate scanning by the Logistics Department and relevant personnel, which can then be linked to an independent system to verify the authenticity of the submitting organization and the content of the report, thereby curbing fraudulent activities.

He suggested that the Logistics Department, either itself or through independent accountants or lawyers, should conduct a financial and documentary investigation of newly awarded companies within three to four months after the bid opening. Many countries overseas also have such requirements.

In addition, the Logistics Department previously used a points-based system to review tenders in 2023, with price accounting for 50% and the remaining 50% considering the bidder's innovative proposals and technology. However, in this bottled water incident, the evaluation criteria were solely price, and the contract was awarded to Xin Dingxin on a "lowest bidder" basis. Huang Junshuo pointed out that all tenders should also maintain a points-based system. As the largest procurement agency, the government's bidding policies should incorporate ESG (environmental, social, and corporate governance) considerations and encourage corporate innovation and technological advancement. "The scoring ratio could be adjusted, for example, to 75% price and 25% technology, or a 30% to 70% split, to avoid a completely "lowest bidder wins" situation, reduce problems, and enhance market competitiveness."

Author：Qinger