Hong Kong Secures $1.1 Billion To Cover Jump in Cost of Link Road Project
Having secured an extra $1.1 billion (HK$8.8b) to cover a 54% hike in the project budget, the Hong Kong government on June 12 announced two design-build contract awards together worth nearly $3 billion for the territory's share of the 30-km-long fixed link to Macao. Two teams of Chinese and European firms will build a 9.4-km-long viaduct and a linked 2.6-km tunnel on reclaimed land. Together the components will form the Hong Kong Link Road.
Local subsidiaries and Paris-based Bouygues Construction S.A. and China Harbour Engineering Company Ltd. secured a roughly $1.7-billion (HK12.9b) agreement to design and build the viaduct from Scenic Hill, on Hong Kong's airport island, to the boundary with the main Hong Kong-Zhuhai–Macao link, being procured separately on the mainland. The 54-month viaduct contract is said to be the territory's biggest ever design/build deal.
The shorter section of highway from Scenic Hill to a point north-east of the airport went to China State Construction Engineering (Hong Kong) Ltd for approximately $1.2-billion (£750M). The project includes a 1-km-long tunnel and a 1.6-km at-grade section on a 23-hectare piece of reclaimed land. U.K.-based W. S. Atkins plc will design the project for China State.
A nine-month delay in procuring the contract contributed to the large cost hike, according to government officials. A legal dispute by project opponents put back the start of contract bidding to late last year. During the delay period, construction prices surged by $420 million (HK3.27b), claim officials. At the same time “higher-than-expected risk assessment” by bidders added another $440 million (HK$3.4). Contingencies and cost hike provisions further bloated the cost.
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