Airport contracts peace move

PUBLISHED : Friday, 15 April, 1994, 12:00am
UPDATED : Friday, 15 April, 1994, 12:00am

CONTRACTORS are set to settle their contract-conditions fight with the Provisional Airport Authority after the PAA sent a letter last night agreeing to negotiate a deal with the Hong Kong Construction Association (HKCA).

Both sides will meet tomorrow morning.

Sources believe an agreement to end the two-month-old dispute will either be thrashed out then or during further meetings early next week.

The HKCA's executive committee met last night to consider how it should respond to the PAA's overtures, but insiders were confident a deal would be reached at the weekend.

''Yes, I think there will be a settlement,'' one committee member said.

The authority, anticipating a positive result to its peace move, decided to delay the return of tenders for four key contracts until next Friday.

Bids for the work, for passenger foundations, water pipelines, utilities and site accommodation, were to be submitted today, but the 27 prequalified construction groups had already announced a boycott of the jobs.

The PAA's decision to seek a meeting with the HKCA is a major climbdown for the authority, which was adamant even up to yesterday morning that it would deal only with individual builders.

''Contractors made it clear to us they would prefer it if we negotiated with the HKCA,'' said a PAA insider justifying its change of mood.

''We believe all parties want a speedy resolution of the dispute,'' said the PAA source, who added that procedural notes which explain and clarify the authority's thinking on certain contract clauses would be among the issues discussed at tomorrow's meeting.

''This is exactly the response we have been waiting for,'' commented one firm.

Nevertheless, insiders predicted some tough negotiations before a settlement could be reached.

The authority has indicated to contractors that it is prepared to compromise on key issues such as capping general damages, changing dispute resolution procedures and limiting the cost of extra work caused by ground settlement or design changes.

''But as far as the HKCA is concerned these issues have never been properly addressed by the authority,'' one source said.

''As a result, there is still a long way to go.'' Consequently, the disturbing fear remains that without a deal construction firms face significant risks on airport contracts.