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Hong Kong aviation

Report shows consultant for Hong Kong airport’s new air traffic control system awarded job via single tender

Revelation from internal documents seen by FactWire raises concerns of partiality

PUBLISHED : Wednesday, 15 February, 2017, 8:31am
UPDATED : Thursday, 06 July, 2017, 12:22pm

The hiring of the company to be the independent consultant for the controversial new air traffic management system (ATMS) at the Hong Kong airport was done through a single tender process, according to internal documents seen by news agency FactWire, raising concerns of partiality.

Recommendations received by the Civil Aviation Department (CAD) on strategies for transitioning from the old ATMS to the new system were the same one given five years earlier, the report said.

But the department and consultant National Air Traffic Services (NATS) said they had done nothing wrong.

Internal CAD documents seen by the news agency showed that NATS was selected as the “overseas independent consultant” to “prove” that the ATMS was operating smoothly. The contract was worth HK$1.4 million – below the legal limit of HK$1.43 million under the Stores and Procurement Regulations for single tenders.

The documents also showed that CAD had a close relationship with NATS dating back to 2009. They were looking to form a “strategic partnership”, and NATS was favoured to become the consultant because it offered “more flexibility in commercial interests”.

The revelations raise questions of partiality, but more evidence is needed before the deal can be seen as preferential, according to Civic Party lawmaker Jeremy Tam Man-ho.

“You cannot base [conclusions] on one sentence. Did CAD cut the price down? Was the project HK$5 or HK$6 million – to do a single tender, was there a price cut to give it to NATS?” Tam, who is also a pilot, said.

“We don’t have any proof of that. We need a list of contracts from NATS and see how much they were worth and if they were single tender. Then you can make a judgement.”

A spokeswoman for the consultancy company said the contract was between NATS and the Transport and Housing Bureau, not CAD, and that it “operated to the highest ethical standards ... complying strictly with government tender requirements and procurement processes and guidelines”.

A spokesman for the bureau said it had awarded the contract following established rules. The consultancy was selected due to its experience, having a branch office in Hong Kong, and a “proven track record” of consultancy studies, the spokesman added.

“As NATS had never been involved in the development process of the new ATMS, there would be no role conflict for NATS to be appointed as [the bureau’s] independent consultant for assessing the readiness of the new [system],” he said.

Before awarding the no-bid consultancy job to NATS, CAD compared its services with that of the United Nations’ International Civil Aviation Organisation (ICAO).

The consultancy was ultimately selected because the UN organisation did not get involved in commercial deals and was a relatively neutral body, lacking flexibility in contract negotiations, which NATS could provide, according to CAD documents.

Meanwhile, the department’s internal documents from 2011 showed that in June that year, members of the new ATMS task force, two assistant director-generals, and then director-general of civil aviation Norman Lo Shung-man visited NATS-operated air traffic control centres in Swanwick and Prestwick in the UK to learn from their experiences in transitioning between ATMS.

Five years later, NATS proposed the same transition strategies to CAD – in March and May last year.

The company’s spokeswoman admitted that past experiences with transitioning between ATMS were shared with CAD in 2011, and it had provided “similar advice” last year.

“The document proves that the CAD hiring of NATS to provide professional feedback on the readiness of the ATMS to the bureau was a public relations show. The CAD already knew about the recommendations in 2011,” the FactWire document source said.

The Transport and Housing Bureau submitted documents to the Legislative Council in November 2016, reporting that NATS carried out an assessment on the readiness of the ATMS in March, concluding that “the system was safe, stable and reliable”, and to implement transition strategies – which were advised to CAD in 2011.

“It’s essential to ask the bureau to change what it calls ‘independent consultancy practices’” by hiring other firms at the same time or having a mix of people from various companies and department officials, Tam said.

The latest revelation deals another blow to the credibility of the HK$1.56 billion AutoTrac III air traffic management system developed by US company Raytheon.

Earlier this month, CAD was accused of a safety cover-up after “loss of separation” incidents.