Airport body told to explain $1.9b payout

PUBLISHED : Wednesday, 16 October, 1996, 12:00am
UPDATED : Wednesday, 16 October, 1996, 12:00am

The Airport Authority was yesterday given two weeks to prepare a detailed report on $1.9 billion in compensation paid because of construction delays in the new terminal building.

Legislators said they would ask the Governor to appoint the Director of Audit to scrutinise the deal if they were not satisfied with the answers.

At a panel meeting on the terminal building, New Airport Project Co-ordination Office director Billy Lam Chung-lun admitted officials were aware of possible delays in the construction of the building even before awarding the contracts in January last year.

'We were aware of adverse ground conditions and that we might not be able to complete the ground work on time, but the tender price was good and time was pressing.' The Airport Authority had to pay the compensation to contractors building the terminal last month because the site was not handed over to them on time.

Mr Lam said that the 1991 Sino-British agreement on the airport required the Government to complete the project to the maximum possible extent before the handover. So it had planned to award the contract first and hand over the site in phases.

Legislators attacked the planning as a 'blind act'.

'You just hoped you could catch up, based on no substantial reasons,' said Democratic legislator and infrastructure spokesman Albert Chan Wai-yip.

'When you awarded the contract in January 1995, you were aware of the delays in the foundations. You should have informed the public there might be a chance of claims [for compensation]. You now come to us and say we have to pay $1.9 billion or we can't expect to have an airport in April 1998. It's something close to blackmail.' But Mr Lam said there were complex reasons for the delays. The commercial settlement was the most practical solution because if the matter had not been settled, more time and money would have been wasted.


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