'Onerous' conditions criticised

PUBLISHED : Monday, 05 June, 1995, 12:00am
UPDATED : Monday, 05 June, 1995, 12:00am

LAWYERS believe the Government has only itself to blame for the high level of claims related to airport core programme work, because of the tough conditions it imposed on contractors.

Iain Black, a partner in law firm Masons, said some of the problems could have been avoided.

'When the Hong Kong Construction Association was looking at the contract conditions, the Government was not interested in taking its comments on board,' he said.

Instead the Government was intent on using lump-sum, fixed-price contracts supported by onerous contract conditions, he said.

These had made contractors take virtually all the risk for bad weather and extra work caused by design changes, delays on associated contracts, or poor ground conditions.

A row between the Government and contractors, who threatened to boycott core programme work in 1991, forced the authorities to make concessions.

The most important was agreement to use alternative dispute-resolution procedures with binding adjudication, mediation and arbitration to settle claims.

The procedures offer a lifeline to contractors, restoring some of the equitability initially taken away by the tough conditions.

One legal source said: 'Taken to the extreme, if the size of the foundations double or there is a month of torrential rain - as there was last summer - contractors will have to stomach these problems themselves.

'As a result they could be left considerably out of pocket. This is very unfair.' The source said the procedures allowed contractors to make their case and brought back an 'element of common sense the Government took away'.

The level of claims - which have to be made within 21 days of a design change or other event happening, and updated every month - has led to an explosion of work for construction lawyers.