HK Airport Authority lets over £1bn NEC contracts

HK Airport Authority lets over £1bn NEC contracts

The Airport Authority Hong Kong is now procuring over HK$10 billion (£1 billion) of construction works using NEC contracts. Three of the contracts are part of its HK$141 billion (£14 billion) new third runway project at Hong Kong International airport, while the fourth is for an office building on the existing airport site.

Following an initial trial of the NEC3 Engineering and Construction Contract Option D (target contract with bill of quantities) starting in 2017, the Airport Authority let two more projects 2019 using NEC4 ECC Option D and C (target contract with activity schedule). It is about to award another large contract this year using NEC4 ECC Option D.

The Airport Authority is following a similar NEC journey to that begun by the Development Bureau in 2009. However, the trial contracts are much larger and it is understood they are being used with fewer amendments to provide a more accurate reflection of their effectiveness.

Passenger and baggage tunnels

The first NEC contract, 3RS contract 3801, is for around 400m of new automated people mover and baggage handling tunnels on the existing airport island and forms part of the three-runway system (3RS) project. The 3RS project involves reclaiming 650ha of land on the north side of the existing Chek Lap Kok island site and building a new 3.8km runway and associated taxiways parallel to the existing runways.

Additional 3RS works include building a new passenger building connected to the expanded Terminal 2 via a 2.6km multiple-cell, cut-andcover tunnel containing an 80km/h automated people mover and a new 36km/h baggage handling system. On completion in 2024, the 3RS project will enable the airport to handle an additional 30 million passengers each year.

The HK$2.37 billion (£235 million) NEC3 ECC Option D contract for the first section of passenger and baggage tunnels was let in June 2017 to China State Construction Engineering (Hong Kong) Limited, and construction is expected to take four years. The project team is using Cemar software to help with NEC contract administration.

The Airport Authority’s deputy construction director Darrel Kingan and China State Construction deputy general manager Victor Wu discussed their use of NEC on contract 3801 in more detail in a Q&A session at the NEC Asia Pacific Users’ Group Conference in November.

Third runway and associated works

The second NEC contract, 3RS contract 3303, is for constructing the third runway on the newly reclaimed land together with associated taxiways, infrastructure works and ancillary buildings and facilities. The HK$6.27 billion (£621 million) NEC4 ECC Option 4 contract was let in April 2019 to a joint venture of Sinohydro Corporation Limited, Powerchina Airport Construction Company Limited, Paul Y Construction Company Limited and Rock-One Engineering Company Limited.

It is the largest NEC target contract to be let in Hong Kong so far, just beating the HK$6.23 billion (£617 million) NEC3 ECC Option C contract awarded by the Highways Department in July 2019 for the main tunnel section of the Central Kowloon Route.

It is understood the project team will also be using Cemar software for contract administration.

New Airport Authority office

The third NEC contract, CWD contract C18W07, is for the design and construction of a new seven-storey office building on the north side of the existing Terminals 1 and 2. The HK$794 million (£79 million) NEC4 ECC Option C contract was let in July 2019 to Dragages Hong Kong.

Located on the current taxi staging area between car park 4 and the MTR Airport Express line, the 23,000m2 building will provide office accommodation for the Airport Authority and Aviation Security Company. According to Dragages, the use of NEC will, ‘reinforce and open and collaborative working relationship with our client’.

The office building is scheduled for completion in 2022.

Reclaimed land tunnels

The fourth NEC contract, 3RS contract 3802, will be for the remaining 2.2km of the automated people mover and baggage handling system tunnels in the new reclaimed land area. Currently out for tender, this will again be let using NEC4 ECC Option D and the value is likely to be of a similar order to contract 3801. Turner & Townsend has been contracted to provide the Airport Authority with advice on all aspects of NEC procurement, tendering, training and post-contract administration, including cost assurance on target cost contracts.

Recent Projects

Recent news

Spotlight Podcast Episode 1: NEC for Rail: A conversation with Mark Thurston and Keith Lomas, HS2

Listen to NEC Spotlight Podcast Episode 1: NEC for Rail: a Conversation with Mark Thurston and Keith Lomas, HS2

In July 2022, Mark Thurston, Chief Executive Officer, and Keith Lomas, Project Client Director, from HS2 recorded the first episode of the podcast to talk about NEC for the rail industry.

Read more
HS2 awards final NEC station contract on first phase from London to Birmingham

HS2 awards final NEC station contract on first phase from London to Birmingham

HS2, currently the world’s largest NEC-procured project to date, has let the last of four new high-speed railway stations on the £45 billion first section between London and Birmingham.

Read more
How NEC contracts can help us to achieve net zero carbon emissions

How NEC contracts can help us to achieve net zero carbon emissions

Recent record-breaking temperatures in the UK and across the world have reminded us, yet again, of the impact of climate change on our ability to function as a society and economy.

Read more
View all news