Drainage Services Tower, Hong Kong

A 21-storey government office building has been successfully delivered on time and budget in Hong Kong using an NEC target contract. The new HK$1,769 million (£170 million) Drainage Services Tower in West Kowloon is the new headquarters of the Drainage Services Department (DSD) of the Government of the Hong Kong Special Administrative Region (HKSAR) of China. It is one of nine replacement building projects to enable commercial redevelopment of the Government Offices Compound in Wan Chai.

HKSAR’s Architectural Services Department (ArchSD) awarded the construction work to Shui On Joint Venture (a collaboration of Shui On Building Contractors Limited and Shui On Construction Company Limited) under an NEC3 Engineering and Construction Contract (ECC) Option C (target contract with activity schedule) in January 2021. After substantial completion of the building in mid-2025, DSD divisions have been moving in gradually and the building is targeted for opening in early 2026.

To optimise land use, the 38,300 m² reinforced-concrete-framed tower was built within the existing boundary of the Cheung Sha Wan sewage pumping station. The tower provides modern office accommodation, conference rooms, a multi-purpose room, a building information modelling technical centre and storage areas. Designed as a smart building, it features sustainable and renewable energy systems and a range of smart and innovative technologies. External works include enhancement works to the existing pumping station roof, linked to the tower by footbridges, and an open car park. 

ArchSD is an experienced user of NEC priced contracts, including major projects such as the Tsueng Kwan O fire station, ambulance depot and staff quarters and North District Community Health Centre in Sheung Shui, but this was its first use of a target cost option. The project won the Building and Facilities Management Award in the 2023 NEC Martin Barnes Awards. According to the judges, ‘Collaboration was taken seriously on this project, combined with use of co-location of teams and engagement with supply chain.’ 

Collaborative culture

ArchSD chief project manager Kevin Suen says in line with the NEC requirement to act in a ‘spirit of mutual trust and co-operation,’ both ArchSD and the contractor developed a collaborative culture that became instrumental in maintaining project momentum. ‘Collaboration was at the heart of the project, and all parties fully committed to working together towards success.’

He says the team continued to explore, adjust and adapt new collaborative working skills. ‘These included efforts to better understand each party’s concerns and interests, preferring direct communication over emails or writing, keeping an open-minded attitude and actively listening to others. These gradual changes in behaviour and contractual relationship fostered a sense of mutual trust and respect among team members, making collaboration a cornerstone of the project's success.’ 

Suen says NEC integrated workshops were arranged to enrich the team’s understanding of NEC and to bring the team together on aligning the common goals. ‘We gradually built up our mutual trust and tacit understanding, setting up easy-to-manage procedures and strategies to enable quicker decisions and to work more effectively towards our mutually agreed targets.’

He says the decision to co-locate the team proved to be a significant advantage. ‘Direct communication improved rapport between team members, reduced communication errors and minimised paperwork and emails. Apart from increasing productivity, this built trust and deepened the team's cooperation on daily basis. Additionally, a digital site supervision system allowed instant sharing of site information, inspection requests, process and results, further enhancing collaboration and communication within the team.’

Managing risks

Suen says as a pilot NEC target-cost project with a pain/gain share, the project team collaborated closely with each other and over 100 subcontractors to achieve the best performance in cost and time management. ‘With the building market then largely unfamiliar with NEC target-cost contracts, additional resources were deployed to ensure timely procurement and encourage development of innovative and cost-effective solutions.’

He says the project started during the difficult time of Covid-19. ‘However, through NEC early warnings and risk reduction workshops, risks were identified at an early stage and managed optimally – especially those relating to unstable material supplies and emergency site arrangements. The early warning mechanism enabled advanced solution exploration and prompt implementation once a matter arose which could increase prices or delay completion.’ 

Suen says a key risk to be managed was avoiding any disruption to West Kowloon’s critically important sewage pumping station. ‘The new building is right within the existing pumping station site and surrounded by a complex underground network of sewage rising mains, culverts and associated installations. Preventing disruption was therefore a mammoth challenge to construction – especially during piling and excavation works. Adequate protective works and stringent monitoring strategies were adopted, as well as close coordination with the pumping station operation team.’

He concludes that ECC Option C helped the project team successfully manage risks and turn them into opportunities. ‘Various cost-savings designs were proposed and accepted, resulting in a positive gain share. In addition, with all the tools and processes designed to promote collaboration, both client and contractor had more certainty in cashflow, budget and project programme, helping to ensure successful delivery on time and budget.’

Benefits of using NEC

• NEC requirement to act in a ‘spirit of mutual trust and co-operation’ resulted in a collaborative culture that became instrumental in maintaining project momentum.
• NEC early warning and risk reduction mechanism enabled advanced solution exploration and prompt implementation once a matter arose, particularly during Covid-19.
• ECC Option C helped the project team to manage risks, develop cost-savings designs and deliver a positive gain share.

ArchSD Building/FM Project of the Year (Martin Barnes Awards 2023)