HK government uses NEC to procure its first modular high-rise building project

The Hong Kong government has used NEC to procure its first concrete high-rise building project using modular integrated construction (MiC). The new married quarters for the Fire Services Department at Pak Shing Kok in Tseun Kwan O were built from 3,726 reinforced concrete modules manufactured offsite with over 80% of their internal finishes already completed.

Client the Architectural Services Department (ArchSD) of The Government of the Hong Kong Special Administrative Region engaged contractor Yau Lee Construction Company Limited in August 2018 under an NEC3 Engineering and Construction Contract (ECC) Option A (priced contract with activity schedule. The HK$1,508 million (£140 million) project was finished on time and budget in March 2021.

The work involved building one 17-storey and four 16-storey and residential tower blocks to provide 648 three-bedroom apartments for firefighters and their families. Each 50 m2 apartment includes a living room, dining room, kitchen and bathroom. Also included in the 46,341 m2 development was a building management office, covered walkway, multifunction recreation room, outdoor children’s playground and 101 car parking spaces
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The pilot project was part of the government’s plan to encourage adoption of MiC in both public and private sector projects to improve productivity in cost-effectiveness. Speaking at the opening ceremony in May 2021, government chief executive Carrie Lam said MiC reduced construction time by 30−50%, saved construction costs by about 10% and improved quality, sustainability and safety. There are now more than 60 projects adopting MiC in Hong Kong.

Protecting intellectural propety

ArchSD is an experienced user of NEC contracts, having successfully used ECC Option A for construction of the HK$3 billion (£280 million) Tin Shui Wai Hospital project in 2016 and ECC Option B (priced contract with bill of quantities) for a HK$447 million (£42 million) 30-classroom secondary school in Kai Tak in 2019. More recent projects include a HK$758 million (£70 million) ECC Option B for a major swimming pool complex in Tin Shui Wai, which is due for completion in 2024.

ArchSD chief project manager Andrew Fung says a key aspect of preparing NEC for use on the pioneering Fire Services Department project was balancing the need to share and promote the contractor’s MiC technology with the legal requirement to protect its intellectual property rights. ‘The simple introduction of an additional Z clause in the contract was not only able to tackle the intellectual property issues but also embodied NEC’s required “spirit of mutual trust and co-operation” between the parties.’

He says the clause provided a collaborative foundation to reduce and mitigate the risks of intellectual property rights infringement, improve the quality of the works through capturing the expertise and input from the contractor, and address technology issues and difficulties quickly and efficiently.

‘The Z clause protected the commercial confidentiality, trade secrets and know-how owned by the contractor while maintaining a platform where creativity could flourish and providing a venue for showcasing the use of advanced technology and innovative construction methods.’

Fung concludes, ‘For NEC users such as ArchSD, innovative additional contract clauses embodying the NEC “spirit of mutual trust and co-operation” are a key element to successful implementation of new technology such as MiC. In this project, reducing and mitigating the risks of intellectual property rights infringement was identified, enabling us to seize the win–win opportunities that enhanced productivity and cost-effectiveness.

Benefits of using NEC

• NEC obligation for parties to act in a, ‘spirit of mutual trust and co-operation,” ensured a collaborative approach to achieving successful delivery of this major MiC project.
• NEC flexibility ensured the contractor’s MiC intellectual property rights were protected while enabling the project team to share and promote the technology for wider industry benefit.
• NEC’s collaborative approach ensured that MiC technological issues and difficulties were addressed quickly and efficiently, enabling the project to be delivered on time and budget.