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Hong Kong MTR

Firms in shoddy MTR work scandal hit with bans on bidding for Hong Kong public contracts for up to one year

Leighton Contractors (Asia), Samsung C&T Corporation, Hsin Chong Construction and China State Construction Engineering will be barred from government projects

PUBLISHED : Monday, 08 October, 2018, 6:50pm
UPDATED : Monday, 08 October, 2018, 11:31pm

Four contractors embroiled in a construction scandal on Hong Kong’s HK$97.1 billion (US$12.39 billion) Sha Tin to Central rail link have been barred from bidding for government contracts for up to a year, city officials said on Monday.

A penalty had been issued to Leighton Contractors (Asia) for “construction issues associated with Hung Hom station”, the Development Bureau said.

The company in 2013 won a HK$5.2 billion contract to expand the downtown Kowloon facility, but the work was later found to be substandard, triggering a police investigation.

The bureau on Monday did not specify exactly which faulty work had led to its decision, but the government’s Highways Department in June said walls on a new platform deviated from approved designs, and 2,000 metal couplers used to connect steel bars had not been installed.

Leighton has been tight-lipped over the scandal since reports surfaced in May.

A bureau spokesman said on Monday: “In case more information on the construction issues associated with Hung Hom station becomes available in future, the [bureau] will review the situation and, if necessary, recommend and take further appropriate regulatory action.”

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Officials also announced that Samsung C&T Corporation and Hsin Chong Construction Company, firms in a joint venture to build two stations on the rail link, had each received a four-month ban for issues found at To Kwa Wan.

The bureau again did not specify the construction work in question, but the city’s railway operator has admitted there were also “unauthorised deviations” from designs for a wall in To Kwa Wan station.

The two contractors were said to have removed steel bars and concrete to correct bulging.

A spokeswoman for Hsin Chong on Monday said the company had no comment on the punishment.

More subpar work at Exhibition Centre station prompted the bureau to issue another ban against Leighton as well as China State Construction Engineering Corporation, which will prevent the firms bidding for buildings or roads and drainage contracts worth more than HK$300 million for a period of three months.

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Leighton’s three-month penalty will take effect after the end of its 12-month ban for the work at Hung Hom station.

Officials again did not spell out exactly what construction problems the contractors were punished for. However, the MTR Corporation in June revealed the two firms had dug deeper than permitted to install a final layer of I-beams – metal bars used to support diaphragm walls to stop them bending.

“If a contractor is found or suspected to have shown serious poor performance in any public or private sector works contract, the [bureau] can take appropriate regulating action against the contractor in accordance with established procedures,” a bureau spokesman said.

In the past three years the bureau has removed one contractor from its approved list and suspended 69 from bidding for government work.

Hong Kong leader Carrie Lam Cheng Yuet-ngor has ordered a judge-led commission of inquiry to look into the work at Hung Hom.

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Headed by retired judge Michael Hartmann, the commission is set to begin hearing evidence on October 22.

A police investigation is ongoing in parallel.

China State Construction Engineering said on Monday night it respected the government’s three-month ban and expressed regret over the incidents at Exhibition Centre Station.

The Post also reached out to Leighton and Samsung C&T for comment.

Civic Party lawmaker Tanya Chan said Leighton’s ban was longer than expected.

“Normally a suspension period wouldn’t be longer than six months ... The 12-month suspension [is] probably to accommodate the report to be issued by the commission of inquiry,” Chan said.

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“At this moment, that is all the government can do unless it has more concrete grounds or evidence of Leighton’s mistakes.”

Pro-establishment lawmaker Michael Tien Puk-sun, who chairs the Hong Kong legislature’s railways subcommittee, said Leighton’s punishment was not harsh enough. A two-year ban was warranted, he believed.

The MTR Corp had issued two non-conformance reports about excavation work at Exhibition Centre, but the contractor carried on digging anyway, Tien said.

“This crime, whichever way I see it, is no lesser than changing the approved drawings,” he said.

The violations at Exhibition Centre should have earned Leighton a separate 12-month ban, Tien added.

And if the commission of inquiry uncovered more issues at Hung Hom station, Tien said he would support a permanent ban.

But the legislator also said the bans on public tender still allowed the companies to compete for contracts with the MTR Corp, the Airport Authority and the West Kowloon Cultural District Authority. These are entities the government has a large involvement with.

“If that’s the case, it is the biggest joke in the world,” Tien said.

The MTR Corp said it would consider the track record of a firm and its ability to fulfil contract obligations in any tender process.

“Whether the contractor is suspended from tendering for public works under the government’s approval list is also an important factor in our considerations,” a company spokesman said.