Contract innovation through additional clauses winner: Happy Valley Underground Stormwater Storage Scheme 

Value: HK$1,068 million (£107 million)

NEC contract/options: NEC3 ECC Option C
Start/finish dates: September 2012 - November 2017
Main Project Team Members:
  • Mr. H. S. KAN, Chief Engineer
  • Ms. Ellen N. S. CHENG, Senior Engineer
  • Mr. C. L. LEUNG, Engineer
  • Mr. Tommy K. S. TONG, Engineer
Project scope:

Happy Valley is a well-developed low-lying urban area located in the hinterland of Wan Chai District, northern Hong Kong Island, and is surrounded by a hilly terrain. Owing to its extensive uphill hinterland and fast development, serious flooding occurred from time to time in the past. To address the flooding problem, the Drainage Services Department (DSD) launched the Happy Valley Underground Stormwater Storage Scheme (HVUSSS) by constructing a 60,000m3 2.4 hectare underground stormwater storage tank, a pump house, a 650m long twin-cell box culvert, and associated enhancement works within the Happy Valley Recreation Ground. The utilization of underground space well addresses the stress of limited land supply in the city and, coupled with the recreational grounds above, serves as a good showcase of co-location of different land uses. With the stormwater storage tank fully commissioned in March 2017, peak flows during rainstorms are effectively attenuated, which in turn raises the flood protection standard of the whole area to 1-in-50-year level, offering protection to lives and properties of over 600,000 residents, commuters and visitors in the bustling Wan Chai District.
Sub-contracting is a prominent feature in the construction industry of Hong Kong. DSD appreciated very well the significant role played by sub-contractors, particularly in the HVUSSS project where numerous specialist trades were involved. In drafting this NEC contract, the Project Manage (PM) has therefore specifically drafted an innovative additional clause to promote direct interaction with the subcontractors, with a view to engaging them actively as an extension of the main contractor, and establishing a partnering bonding down to the subcontractor tier.
As at the date of this submission, more than 160 subcontracts have been let under the contract, with a total subcontract sum at some 60% of the contract price. With 90% of works now completed, the project has recorded a cost saving of in excess of HK$60 million (i.e. £6 million) and an advancement in commissioning of the stormwater storage tank – the main part of the contract - by 12 months. The good subcontractor management realized through the additional clause has been the key drive in these achievements. As a matter of fact, the essence of this innovative additional clause was incorporated into the Practice Notes on NEC3 promulgated subsequently in 2016 by the Hong Kong Government for general application to NEC contracts.
To start with the proactive subcontract procurement process (see Photo 1), the PM would first discuss and define the sublet works package with the main Contractor, with due regard to the latest construction programme, site conditions and market trade practice. This process served to make sure that the subcontract works were delineated into works packages that best suited the site progress and there would be adequate market competitors in the tendering process. The PM was engaged in determining the subcontract form and preparing the specification together with the main Contractor before inviting tenders. This collaborative task force was conducive to optimizing the job requirements for selecting the most effective subcontract form and preventing mismatch of expectations in the construction stage. After preparing the subcontract works package, the main Contractor would submit a list of tenderers to the PM for comment. Thus apart from checking that the tendering process was open and competitive, the PM also had the opportunity to see that the tenderers were equipped with adequate job experience and necessary skills to perform the tasks.
The project further piloted an arrangement of subcontract tender interview, which was conducive to extending the mutual trust and collaborative bonding between the PM and the main Contractor to the subcontract tier. The tender interviews, being the most core element in the additional clause for proactive subcontract procurement, have proven to be high efficacious, deriving numerous benefits in the project as presented in the following section.

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