Airport authority holds talks to avoid costly contract row

PUBLISHED : Monday, 25 July, 1994, 12:00am
UPDATED : Monday, 25 July, 1994, 12:00am

THE Provisional Airport Authority (PAA) is in detailed talks with top subcontractors to avoid a costly contract conditions row over work on the $50-billion airport project at Chek Lap Kok.

Intense negotiations have been going on between the PAA and the subcontractors' group, the Hong Kong Electrical and Mechanical Contractors' Association (HKEMCA), for about a month, although more informal discussions have been taking place for two years.

About 70 per cent of the whole airport project will be done by subcontractors, so the PAA is keenly aware how important it is to reach a satisfactory deal.

Both sides hope the negotiations will prevent a repetition of the bruising disputes the PAA has had with building contractors and consulting engineers during the past year. These were only settled after the constructors and engineers boycotted airport work, delaying the project by several months.

''The subcontractors, who will be responsible for everything from plumbing, air-conditioning, electrical supply to roofing and walling, hold the key to whether or not the airport is completed in time,'' said one senior construction manager.

The HKEMCA is taking responsibility for the PAA meetings because electrical and mechanical firms are traditionally the biggest in the subcontracting industry. But the association also includes representatives from the lift and escalator, plumbing and fire prevention industries.

And subcontractors have to agree their own set of contract conditions because of the different type of work they are required to do.

''We have got the revised conditions and they are quite favourable, but there a number of questions aris-ing out of them,'' said HKEMCA secretary George Todkill.

One of the main issues is who takes responsibility for design work to ensure a structure is fit for the purpose it was intended.

This ''fit for purpose'' clause was thrown out during the PAA's row with the building contractors' association when the PAA tried to make builders responsible for some of the design.

The HKEMCA wants this clause reinstated in its own conditions to reflect the large amount of design work done by subcontractors to make construction more flexible.

But the HKEMCA wants the clause heavily qualified so there are limits on what ''fit for purpose'' means. Otherwise, it fears the clause could be misinterpreted once the airport starts operating, costing subcontractors millions of dollars in extra work and compensation.

This and other areas of concern are being resolved either through questions and answers through the mail or by a specially formed working party committee of the PAA and subcontract experts.

''We have organised a couple of meetings with the PAA,'' Mr Todkill said.

He said the outstanding questions ''will not take very long to resolve''.

But he also hoped there would be ''on-going dialogue to establish a rapport between the PAA and the subcontractors''.

The PAA said it was pleased with the discussions so far.

''There have been very positive discussions,'' said PAA media relations director Clinton Leeks.