More than 250 delegates attended the NEC Asia Pacific Conference in November 2022, the first in-person event since 2019. Ricky Lau, NEC Asia Pacific Users’ Group chair and Hong Kong Development Bureau permanent secretary for development works, reported in his opening address that over 440 NEC contracts have now been awarded in Hong Kong since 2009, with a total value of more than HK$250 billion (£27 billion).
NEC4 now mandatory
As well as Development Bureau public works projects, Lau said NEC is now being increasingly used by mass transit rail operator MTR Corporation, Airport Authority Hong Kong (AAHK) and CLP Power. He confirmed NEC4 had become mandatory for all Engineering and Construction Contracts (ECC) and Term Service Contracts (TSC) let by government works departments, and that the Bureau was now promoting wider use of target options C and D, extending use of the NEC4 Professional Service Contract (PSC) to all consultancy agreements and exploring other NEC features such as early completion bonus, early contractor involvement, design build operate and climate change provisions.
Michael Fong, director of the Civil Engineering Development Department (CEDD), told delegates his department alone accounted for HK$105 billion (£11 billion) of NEC work, with 71 completed projects, 95 ongoing schemes and 37 out to tender.
He said CEDD had a 5-year plan for NEC, with streamlining procedures in 2023, adoption of key performance indictors in 2024, introduction of NEC communication software in 2025, project manager accreditation training in 2026, and adoption of option X22 on early contractor involvement in 2027.
First DBO contract
Richard Chan and Andrew Fung of the Electrical and Mechanical Services Department (EMSD) reported on Hong Kong’s first use of the NEC4 Design, Build and Operate (DBO) contract for a district cooling system in Tung Chung new town extension. Worth around HK$4 billion (£440 million), the 123 MW system will cool 700,000 m2 of non-domestic floor space with chilled water and save 21,500 t of carbon dioxide each year. Completion is expected around 2034.
Ricky Leung of AAHK and Wes Jones of Dragages then discussed using NEC4 ECC Option C (target contract with activity schedule) to deliver AAHK’s new HK$0.8 billion (£85 million) office tower at Hong Kong International airport (see Issue 118).
Carl Devlin, MTR’s capital works director, completed the morning session with a review of how NEC4 contracts are now being adopted for MTR’s new railway extension project portfolios following a successful back-to-back trial on a reprovisioning project in Kennedy Town.
The morning presentations were followed by afternoon workshops on option X29 on climate change, security of payment provisions and digitalisation in NEC project management. With breaks to network and build relationships throughout the day, delegates had a fantastic opportunity to come together for the first time since 2019 and share their perspectives on using NEC contracts and best practices in procurement.
NEC would like to thank all speakers, sponsors, supporters and attendees for making last year’s conference a success. All presentations are available on the NEC app, see community.neccontract.com.