Application of New Engineering

Contract (NEC) –Joy and Tears from a Main Contractor's

Perspective

Contract No. DC/2012/03 Happy Valley Underground Stormwater Storage Scheme

Hong Kong Institute of Construction Managers

1David Tung26 June 2015

2

Project Background

Flooding in Happy Valley– 24.08.2000, 24.04.2006, 07.06.2008

Happy Valley Recreation Ground

Junction between Morrison Hill Road and Queen’s Road East Wong Nai Chung Road Happy Valley Racecourse 3

Project Background

Leighton Rd

Lowest point at Lap Tak Lane +4.1 mPD

Flem

ing Rd

Gloucester Road

mPD Invert level of drain

Legend

Lowest point at WNCR+5.2 mPD

Sea level ranges between 0.00 mPD and 2.50 mPD On 24 Sep 2009, max. sea level for typhoon Hagupit was 3.35mPD

0.26mPD

Upstream

Mid-levels

Downstream

Catchment Area of Hong Kong West Drainage Tunnel (140 hectare)

Catchment Area of Happy Valley Underground Stormwater Storage Tank (130 hectare)

Catchment Area of Lower Catchment Drainage Improvement Works(80 hectare)

4.5mPD

2.00mPD

1.05mPD

0.46mPD

-0.3mPD

0.26mPD

4

5

Happy Valley

Underground Stormwater

Storage Scheme

MidstreamMidstreamMidstreamMidstream

Storage

Lower catchment

works

Hong Kong West

Drainage Tunnel

DownstreamDownstreamDownstreamDownstream UpstreamUpstreamUpstreamUpstream

Replacement Interception

Drainage Improvement Measures

Project Information

6

Employer Drainage Services Department

Supervisor Drainage Services Department

Contractor Chun Wo Construction & Engineering Co. Ltd.

Project Estimate HK$ 678M

Duration Sep 2012 – Apr 2018 (67 months)

NEC3 Option Option C – Target contract with activity schedule

QS consultant Mott MacDonald Hong Kong Limited

NEC Advisor EC Harris / JCP

Capacity:

60,000m3

Project Background

7

Capac

ity:

60,00

0m3

Capac

ity:

60,00

0m3

Scope of Works:• Underground storage tank with capacity of 60,000m 3

• Pumping station with design capacity of 1.5 m 3/s• 2km long stormwater drain and sewer• Reprovision of sport pitches surface and landscape associated works

Project Background

8

9

Challenge

暴雨警告信號暴雨警告信號暴雨警告信號暴雨警告信號

黃雨黃雨黃雨黃雨 紅雨紅雨紅雨紅雨 黑雨黑雨黑雨黑雨

年平均年平均年平均年平均 20 4.5 1

2014年度年度年度年度 32 9 2

Challenge 1: 天天天天

Challenge 2: 地地地地

11

•軟泥軟泥軟泥軟泥, 硬石硬石硬石硬石

Challenge 2: 地地地地

12

•暗暗暗暗渠渠渠渠, 水水水水喉喉喉喉

Challenge 2: 地地地地

13

•電電電電纜纜纜纜

Challenge 2: 地地地地

14

Proposed drainage works

Horizontal pipe pile wall to

retain the soil on top for

protection of existing trees

Challenge 3: 人人人人

15

搶搶搶搶工工工工人人人人搶搶搶搶石石石石屎屎屎屎

Challenge 4: 時間時間時間時間

16

6.6.14 – 19.10.14

Challenge 4: 時間時間時間時間

17

HEC Substation

Oct 2014Nov 201424 Dec 2014

Challenge 4: 時間時間時間時間

18

No. of monthNo. of monthNo. of monthNo. of month 1111 2222 3333 4444 5555 6666 7777 8888 9999 10101010 11111111 12121212 13131313 14141414 15151515 16161616 17171717 18181818 19191919 20202020 21212121 22222222 23232323 24242424 25252525 26262626 27272727 28282828 29292929 30303030 31313131 32323232 33333333 34343434 35353535 36363636 37373737 38383838 39393939 40404040

YearYearYearYear 2012201220122012 2013201320132013 2014201420142014 2015201520152015

MonthMonthMonthMonth 9999 10101010 11111111 12121212 1111 2222 3333 4444 5555 6666 7777 8888 9999 10101010 11111111 12121212 1111 2222 3333 4444 5555 6666 7777 8888 9999 10101010 11111111 12121212 1111 2222 3333 4444 5555 6666 7777 8888 9999 10101010 11111111 12121212

Time elapsed Time elapsed Time elapsed Time elapsed

1st Milestone: Commissioning of Stage 1 Scheme on 03-2015

19

No. of No. of No. of No. of monthmonthmonthmonth

1111 2222 3333 4444 5555 6666 7777 8888 99991010101011111111121212121313131314141414151515151616161611117777

18181818191919192020202021212121222222222323232322224444

25252525262626262727272728282828292929293030303033331111

32323232333333333434343435353535363636363737373733338888

39393939404040404141414142424242434343434444444444445555

46464646474747474848484849494949505050505151515155552222

53535353545454545555555556565656575757575858585855559999

60606060616161616262626263636363646464646565656566666666

67676767686868686969696970707070717171717272727277773333

747474747575757576767676

YearYearYearYear 2012201220122012 2013201320132013 2014201420142014 2015201520152015 2016201620162016 2017201720172017 2018201820182018

MonthMonthMonthMonth 999911110000

1111111112121212 1111 2222 3333 4444 5555 6666 7777 8888 9999101010101111111112121212 1111 2222 3333 4444 5555 6666 7777 8888 9999101010101111111112121212 1111 2222 3333 4444 5555 6666 7777 8888 999911110000

1111111112121212 1111 2222 3333 4444 5555 6666 7777 8888 9999101010101111111111112222

1111 2222 3333 4444 5555 6666 7777 8888 9999101010101111111112121212 1111 2222 3333 4444 5555 6666 7777 8888 9999101010101111111112121212

Time Time Time Time elapsed elapsed elapsed elapsed

二期二期二期二期一期一期一期一期

20

Team Building

Mutual Trust

Co-operation

Cultural Change

Team Building

Relationship Management

• Establish partnering spirit – Start-up partnering workshop– Joint NEC training– Set up joint office

• Maintain and improve– Setup common goal– Champion Group meeting

22

“10.1 – The Employer, the Contractor, the Project Manager and the Supervisor shall act as stated in this contract and in a spirit of mutual trust and co-operation”

Training Programme

Partnering workshop

23

Stakeholder workshop

NEC workshops

September 2012

October 2012

November 2012

March 2013 NEC advisor’s review

December 2012 Extension of NEC pre-contract advisor

April 2013 NEC Computer Software

May 2013 NEC Post-contract advisor

“Know You Know Me” Workshop

24

- Joint office

- Joint organisation chart

- Project Logo

Good Practice

25

26

Subletting

Inventory

Joint Organization

Chart

Morning Briefing

27

• Solve site issue

• EWN

• Focus Group

•Mobile Device

Partnering Scores

28

Time Cost Quality Safety Environmental Public Relation Trust Cooperation

Down Trend(due to increased difficulties on site)

Up Trend(after some success cases)

Champion Group

29

Communication with Community

Communication with Community

30

Fun Day with DSD and LCSD

�Communication

�Education

Communication with Community

31

School Visit

32St. Paul’s Primary School visit and Drama Performanc e

School Visit

33

Student printing posted on the site hoarding

Stakeholder Workshop

34Partnering Workshop with Stakeholder

District Council Hong Kong Jockey Club

Hong Kong Football ClubSchools

LCSD

Consultants

Contractors

Sub-contractors

Experience Sharing

35

Site Visit ListNo. Date Title1 15/2/2014 Construction Industry Council 建造業議會

2 19/2/2014 Civil Engineering and Development Department 土木工程拓展署

3 21/2/2014 Civil Service Brueau (CSB) Staff Exchange 北京市水务局 排水管理处

4 26/2/2014 Construction Industry Council 建造業議會

5 1/3/2014 Hong Kong University of Science and Technology 香港科技大學

6 28/5/2014 Considerate Contractors Site Award Scheme 德地盤嘉許計劃

7 6/6/2014 Beijing Water Authority 北京市水务局

8 21/7/2014 DSD’s 25th anniversary (1) 渠務署25周年銀禧活動 (一)

9 26/6/2014 Hong Kong University of Science and Technology 香港科技大學

10 28/6/2014 The Hong Kong Institution of Engineers 香港工程師學會

11 5/7/2014 The Hong Kong Construction Association 香港建造商會

12 25/8/2014 Pearl River Water Resources Commission 香港科技大學湯有光教授帶領水利部珠江水利委员会

13 31/7/2014 Radio Television Hong Kong (RTHK) Shooting Day 香港電台拍攝

14 15/8/2014 Xinhaua visit 新華社CNC 採訪 (SWSPS)15 15/8/2014 DSD’s 25th anniversary (Part 2) 渠務署25周年銀禧活動 (二)16 25/8/2014 Dr Kwan (Hong Kong University) Site Visit 關博士(香港大學)實地考察

17 22/9/2014Water Supplies Department - The New Engineering Contract (NEC )Special Interest Group

水務署 新工程合約特別小組

18 27/9/2014 DSD's 25th Anniversary (Part 3) 渠務署25周年銀禧活動 (三)

19 26/9/2014The Hong Kong Institution of Engineers - HKIE

香港工程師學會

20 18/10/214 The Institution of Civil Engineers (ICE) 英國土木工程師學會

21 8/11/2014 H.K.U.Engineering Alumni Association 香港大學工程舊生會

Site Visit for HKIE membersSite Visit for HKIE members

Experience Sharing

36

� Sharing in difference media in Hong Kong and International

Experience Sharing in MingPao & SingTao

Sharing in GreenMAG #04 2014

NEC Website and Newsletter

37

Commendations

Considerate Contactor Award

38

� Silver award in 21 th Considerate Contactor (CCSA) organised by Developme nt Bureau and Construction Industry Council.

� Gold award in 21 st Considerate Contactor (OEMPA) organised by Developm ent Bureau and Construction Industry Council.

DSD Housekeeping Award

39

� Gold Award in DSD Construction Sites Housekeeping Award Scheme 2013 & 2014

Environmental Award

40

� Silver award in Hong Kong Awards for Environmental Excellence 2014 organised by HKPC

Environmental Award

41

� Silver award in Hong Kong Green Award 2014 organised by Hong Kong Green Council

NEC Award

42

� Highly Commended New Engineering Contract (NEC) Large Project of the Year 2015 award

43

Conclusion

GCC vs. NEC

• Traditional Contracts – are driven by a desire to maximum risk transfer .

• New Engineering Contracts – places emphasis on the collaborative management of risk to ensure successful project outcomes .

Source: NEC: A User’s Guide, Jon Broom

Contractor

RSS / Consultant

StakeholderSubcontractor

In Tradition Contracts:

Employer

Joy and Tear

ContractorSupervisor

Stakeholder

Subcontractor

In NECs:

Employer

Joy and Tear

In Tradition Contracts:

EmployerContractor

DISPUTE

• Lawyer• QS• prolongation

Claims $ Relationship

Joy and Tear

In NECs:

Employer / PMContractor

RiskRisk

Reduction

• quick resolution• without lawyer• maintain progress

• low cost • Relationship

Joy and Tear

Subcontract in NEC:

BUT………– Designer’s/Employer’s view on subcontracting arrangement

and strategies– Reply to tenderers’ queries in tender interview

-> minimize speculation; lower tender prices– Revise design / clarification before award of subco ntract by

tender addendum-> less dispute & reduce in tender price

– Alternative options (artificial turf)

Joy and Tear

– PM more involvement subletting procedure– Contractor cannot choose their favor subcontractor

50

THANK YOU