This case study is part of the Spotlight Campaign for Facilities Management. To read more on how NEC Contract suite has been utilised in the Facilities Management Spotlight, please click here.
Two major construction waste reception facilities in Hong Kong are being operated and maintained under an NEC3 Term Service Contract (TSC). The government’s Civil Engineering and Development Department (CEDD) let the three-year TSC option A (priced contract with price list) to Hanison Construction Company Limited in 2015.
The HK$51.6 million (£5 million) contract covers Chai Wan public fill barging point on Hong Kong Island and Mui Wo temporary public fill reception facility on Lantau Island. Together with sites at Tseung Kwan O and Tuen Mun in the New Territories, the facilities receive over 15 Mt of construction waste each year for beneficial re-use.
Major items in the TSC include collection of public fill from Chai Wan and Mui Wo and delivering them by barge to Tseung Kwan O for sorting; collection of bituminous materials from Chai Wan and delivering them by truck to Tseung Kwan O; carrying out environmental monitoring and auditing; and implementing environmental mitigation measures.
According to Louis Chan of CEDD’s fill management division, ‘A partnering spirit and risk sharing have been fully implemented on the contract. A number of partnering workshops were held and these have helped to build a strong trust between the employer, contractor and service manager.
He says the contracting parties have been willing to initiate early warnings to seek prompt solutions to any issues arising. ‘In the first two years, the contractor and service manager have raised nine early warnings between them. With timely implementation of compensation events to tackle unexpected problems, we have been able to maintain smooth operation of both facilities.’
For example, NEC risk management processes have enabled the contractor to manage the number of dump trucks arriving at Chai Wan barging point. Leo Lam of the fill management division says, ‘Excessive incoming dump trucks can lead to traffic congestion in public streets in Chai Wan. With the contractor’s cooperation and implementation of compensation events, there has so far been no traffic congestion in Ka Yip Street caused by the site’s operation.’
Reducing Financial Risks
Lam adds that one of the early warnings from the contractor related to excessive handling of bituminous material at Chai Wan, even though this was a non-remeasurable item. ‘This led to a risk reduction meeting in November 2016 and a proposal from the contractor to sort incoming material using its existing plant and labour.
‘The sorting work proactively done by the contractor suppressed the increasing amount of handling required, helping the contractor to avoid any monetary loss from its lump-sum reimbursement for handling costs. The sorting work also led to benefits in re-using the material.’
Benefits of Using NEC
- NEC TSC builds trust and cooperation between the employer, contractor and service manager, ensuring a partnering approach to operating the facilities.
- NEC early warning processes encourage both parties to raise and resolve issues at the earliest opportunity.
- NEC ensures smooth operation of both facilities through timely implementation of compensation events to tackle unexpected problems.