$30m spent to speed up core works

PUBLISHED : Monday, 20 June, 1994, 12:00am
UPDATED : Monday, 20 June, 1994, 12:00am

THE Government has paid an extra $30 million to contractors working on several core airport contracts to help speed up construction.

The extra cash has been paid on at least four contracts, mostly on the West Kowloon reclamation, to ensure they are finished in time for other related projects to start.

''The $30 million may sound a lot but it is insignificant compared to the arm and a leg delays would otherwise cost,'' one engineering source said.

The New Airport Projects Co-ordination Office (NAPCO) confirmed bonuses had been paid under a system called ''buying back time''.

This allows NAPCO to ask contractors to accelerate and complete their work in return for a bonus to cover the extra cost of employing more workers and equipment together with a percentage for increased profit.

In this way NAPCO is ''buying back'' days or even weeks.

''There are provisions in Airport Core Programme [ACP] contracts for the Government to make special payments to contractors where it wants them to speed up work because of the complex inter-relationships between ACP contracts,'' a NAPCO spokesman said.

But she denied the payments were increasing the overall $158 billion cost of the ACP. ''Any payments that may have been agreed are covered by project estimates, so there is no increase in our overall estimates.'' She said bonuses were only paid to contractors who were already ahead or on schedule.

''Where a contractor has fallen behind schedule it is his responsibility to take accelerating action at his own cost,'' she said.

Most of the ACP contracts have been let on a fixed-price, lump sum so that it is in a contractor's best interest to stay within the contract period otherwise it could face massive liquidated damages from the Government.

The West Kowloon reclamation has been singled out for the bonus system because of the huge amount of complex and critical work that is going on.

Reclamation is being done in a number of phases to allow all existing wharf areas and utility services to be used while new facilities are built along the new waterfront.

But while this is going on, contractors are also starting work on the West Kowloon Expressway and airport railway reserve.

Overall there are six main contracts worth more than $6 billion underway. Most are for the reclamation itself, but they also include the northern and southern sections of the expressway, drainage, sewer works and the relocation of the Government dockyard.

Even a week's delay on one part of the job can have a knock-on effect on another section which is out of all proportion to the relatively small cost it would take to allocate additional resources to ensure early completion.

''If there are two firms with contracts in the same area we have generally allowed for a month between one contract ending and another starting. This buffer allows for any slippage in the first one while reducing the risk of work being delayed on the second,'' a NAPCO source said.

''But in some cases the second contractor has been anxious to start work as soon as he can because the timing of his work on another part of the site may be critical for a third firm. Consequently we have asked the first contractor to accelerate his work to finish the job to help give some additional time.''