September 17, 2014
NEC Asia Pacific Users' Group Breakfast Briefing, 10 September 2014
The first newly launched NEC Asia Pacific Users’Group (APUG) Breakfast Briefing session was successfully held on 10 September 2014 at Pinsent Masons’ office. Over 50 delegates from client organisations, contractors, consultants and legal firms attended the event.
Following a welcome speech from Mr T C Chew, the NEC APUG Chairman, our honourable guest speaker Mr C M Chan, Deputy Secretary for Development (Works) gave us an informative talk on “the roll out of NEC in Hong Kong”. Mr Chan reviewed the Government’s journey in launching the NEC contract form in public works projects in Hong Kong and the Government’s considerations in the adoption of NEC.
According to Mr Chan, the Government has already let out 15 public works contracts using the NEC form, three completed and twelve under construction, and we have another 16 NEC contracts under preparation for tendering in 2014. These 31 contracts are using different NEC contract forms, including Term Service contracts, as well as different Options. They cover a wide variety of construction works, from buildings, hospitals, drainage, road works and water supplies. The contract value varied from HKD$10 million to HKD$3 billion, with a total value more than HKD$11 billion. Recently, the Government has also let out two consultancies using the Professional Service Contract (PSC) Form of Option C and Option G. In DSD’s contract for drainage improvement works in Happy Valley, the main contractor has tried out awarding an NEC subcontract using the ESC Option B.
Mr Chan considered that an important aspect of NEC for its success is partnering. NEC works if there is a long-term quality culture in the construction industry ranging from quality management, quality accounting, to honesty and integrity of practitioners, professionalism of practitioners, and many other attributes.
The Government has taken the lead to try out the NEC and wants very much to keep it going. In the coming two years in 2015 and 2016, all new public works contracts to be tendered will be using NEC as far as possible, as an extension of the trial use of NEC. The total public works expenditure is around HKD$70 billion a year. A substantial proportion of the works will be executed by NEC contracts by March 2017.
Mr Chan appreciated the benefits of this contract form and that it has gathered good feedback and experience in overseas countries. He considered that a breakfast meeting like this one would be extremely useful for our frank discussion and the sharing of experience and ideas.
The Breakfast Briefing session was concluded with an open discussion forum which gave an excellent opportunity to exchange views interactively. The event was well received and positive feedback has been received. Many APUG members have expressed their supportive view to hold this kind of event periodically in support of the development of NEC in the region.
The next Breakfast Briefing will be held in late November at Hogan Lovells’ office where Mr Damon So, Partner of Hogan Lovells will give a talk on the subject of “Z-clauses”.
By Ivan Cheung, Asia Pacific Users’ Group Secretary
POSTED BY NEC