PAA and firms stuck on last issue in dispute

Keith Wallis

CONSTRUCTION firms and the Provisional Airport Authority remain deadlocked over contract conditions despite three days of negotiations.

Talks broke up yesterday afternoon without the expected agreement which would have ended the 10-week row.

This was despite concessions by the authority which resulted in provisional agreements on four of the five issues raised by the Hong Kong Construction Association and agreement on 20 minor amendments.

The remaining point outstanding is how contractual disputes should be handled.

Contractors said that without an agreement on this point a deal on the rest was meaningless.

The four tentative agreements clarify the duties and powers of the project manager, limit contractors' responsibility for extra work to structures it has also designed, limits the amount of general damages authority can impose, and restricts the work needed to make good ground settlement.

No new date for further discussions has been fixed, but the two groups are likely to be in contact over the next few days to set a timetable for the next meetings.

''There has been a substantial measure of agreement and a substantial measure of flexibility,'' said an authority spokesman.

''I think both sides need to have time to reflect on the progress which has been achieved and consider their future options accordingly.'' After talks with the authority ended, the association's negotiating team held a meeting with representatives from more than 25 contracting firms who have boycotted four airport advance works contracts.

Held behind closed doors, the meeting enabled association negotiators, including legal and contract specialists, to give contractors a progress report.

The contractors decided to continue the boycott until there is an agreement to include similar dispute resolution measures to those on government-funded airport core projects.

These allow for mediation and adjudication while construction continues and arbitration at the end of the contract if the dispute is still unresolved.

The authority originally refused to accept these measures because ''they were not in the public interest''.

Called ADR (alternative disputes resolution), they were proposed by the association.

''Without ADR agreements about the rest of the conditions are meaningless because it allows the authority to slip all the onerous conditions back into the contract again once work is underway. Under the present dispute procedure there is no redress until the end of the contract and that is unacceptable,'' commented one contractor.

''Contractors and consultants mistrust the authority so much that there is a solid feeling that if we do not take steps to protect our interests now then this will be the last chance we get,'' added another.

Consequently no bids will be submitted on Friday for any of the four contracts for passenger terminal foundations, temporary roads, water pipelines and site accommodation.

Nevertheless the authority is hoping there can be a quick settlement to the row. This will permit it to announce a revised tender date.

with the possibility bids could be in by the end of this month.