CONTRACTORS demolishing the Walled City said yesterday they expected to finish work at least four months ahead of schedule. The Express Builders-Cleveland Wrecking joint venture is required to flatten the site before May next year, according to the $42-million contract. So far, a third of the 350 buildings have been pulled down. Every day except Sundays 10 bulldozers and excavators demolish buildings, eating their way into the 2.7-hectare slum area. Project manager Andrew Tong King-sing said: ''The buildings are in a poor state and it is very dangerous [for] workers to enter the blocks. ''We are using special machines shipped from the United States, including the two heavy metal balls, to pound the buildings. It helps quicken our work. ''If things go smoothly, we can expect to finish the job by the end of this year. We are now one month ahead of schedule.'' Plans to blow up the buildings were shelved for fear of dust pollution. Buildings facing Carpenter Road Park are the first to go. Since demolition began in March only one complaint about noise has been received by the Environmental Protection Department. One former resident, Chow Yuk-choi, who was among the 30 households refusing government compensation, said: ''I shall not forget my old home and I shall tell my children and grandchildren it is being destroyed by the Hongkong Government.'' The site will be turned into a park featuring some Walled City relics, including two cannon from the Qing Dynasty, three wells and a yamen, or court building. Work on the park will begin next year and is scheduled to be completed by late 1995 at a cost of $60 million.