An NEC4 Engineering and Construction Contract (ECC) Option C (target contract with activity schedule) is being used to procure a major flood protection scheme in the New Territories of Hong Kong. By including option X22 on Early Contractor Involvement (ECI), considerable savings have been achieved on the initial target price and programme.
The Drainage Services Department (DSD) of the Government of the Hong Kong Special Administrative Region of China awarded the contract for the HK$3 billion (£300 million) Yuen Long Barrage Scheme to a joint venture of China State Construction Engineering (Hong Kong) Limited and Alchmex International Construction Limited (CSAJV) in May 2023. DSD is the NEC project manager with Binnies Hong Kong Limited as its representative and NEC supervisor.
It was the first time DSD had used Option X22 to allow changes to the winning bid for target cost and programme on such a major project. The 180-day ECI stage (‘stage one’), which was completed in November 2023, resulted in a projected 2.5% cost saving and 9.8% time saving for the detailed design and construction works stage (‘stage two’).
The project involves construction of an automatic 60 m long flood barrier across the Yuen Long drainage canal or ‘nullah’ where it flows into the Shan Pui River, together with a stormwater pumping station, control centre and associated electrical and mechanical works. It also includes improvement to 2.3 km of the nullah channel, upgrading 3.2 km of floodwalls along the nearby Kam Tin River, and construction of 800 m of new flood walls, 200 m of new drainage channels and a new dry weather flow interceptor system.
Due for completion in 2030, the scheme will bring the flood protection level of Yuen Long town centre to the required standard for future climate change and urban development, as well as improving water quality in the revitalised nullah.
Opportunity to maximise gain share
DSD’s chief engineer/project management, Carol Ho says the Option X22 ECI stage gave the contractor a valuable opportunity to discuss modifications to the scope and preliminary design. ‘This included changes that would facilitate construction works, accelerate the construction programme, minimise construction risks and reduce construction costs, which in turn would increase the contactor’s gain share.’
She says over 80 meetings and workshops were held over the six-month ECI stage. ‘These included the client, NEC project manager and supervisor, contractor, subcontractors, consultation groups and end users. In each meeting our common goal was to optimise the stage two construction works.’
Carol says the project team fully embraced the NEC requirement to act in a ‘spirit of mutual trust and co-operation’ in managing to review the full contract scope within the relatively short 180 days ECI stage set out in the contract. ‘The review resulted in pumping scheme optimisation, revised foundation design and an alternative construction sequence, enabling both time and cost savings.’
Enhancing efficiency in ECI stage
Binnies managing director Andy Kwok says DSD, Binnies and CSAJV used NEC’s full range of contract management processes from the outset of the ECI stage. ‘These included standard forms of communication, an early warning register, monthly programme management and contractor’s proposals, all of which helped to enhance the efficiency of the ECI stage.’
He says one of the biggest construction challenges will be controlling flood risk. ‘In stage one we therefore looked closely at the need for effective coordination and planning of the construction sequence, including a review of hydraulic scenarios under different construction methodologies. We also decided to adopt real-time water level and tide monitoring for flood forecasting and warning as an integral part of the construction works.’
CSAJV project director Tony Wong adds that a service provider was engaged in the ECI stage to implement a smart site safety system during construction to improve site safety and construction efficiency. ‘This will include a centralised management platform connected with digital works supervision system, real-time cameras with artificial intelligence, virtual reality safety training, an electronic lock and key system, and real-time tracking of workers’ locations.’
Smooth transition to construction stage
Carol concludes, ‘During the 180-day ECI stage, the project team worked proactively and collaboratively to identify risks and manage them swiftly through the NEC early warning mechanism. Our common goals were to create value from technical solutions and effectively manage flood risks during the construction stage.’
She says DSD issued a notice to proceed to the construction stage a week ahead of the due date. ‘By that time, the scope of the ECI stage was substantially completed, including subletting of major subcontracts to ensure a smooth transition to the construction stage.’
Benefits of using NEC
- NEC Option X22 and the NEC requirement to act in a ‘spirit of mutual trust and co-operation’ helped to achieve both time and cost savings through collaborative discussion of innovative solutions and value engineering during the ECI stage.
- NEC Option X22 allowed the contractor to review and provide input to the scope and preliminary design during the ECI design stage, as well as carrying out advance works to facilitate the construction stage.
- NEC early warning and risk reduction process helped to identify, focus and iron out project risks in the ECI stage to ensure a smooth transition from preliminary design to detailed design and construction.
- ECI stage offered a valuable opportunity for the project team to build in-depth advance knowledge of the scheme, enabling major constraints to be identified and a more constructable scheme to be developed.