Legislative Council Panel on Transport
Improvements to Tuen Mun Road

PURPOSE

This paper reports on -

  1. the latest developments of the project of Tuen Mun Road Improvements and the mediation result; and
  2. the way forward to complete the remaining works at Tai Lam section.

2. Members are advised that this matter is still sub-judice and a two-week hearing is scheduled for the Coroner’s Inquest into the rockfall incident, in late January 1997. In addition, a claim for damages against the Government and the Contractor is still pending on behalf of the relatives of the deceased.

BACKGROUND

3. Under the Contract for the improvement of Tuen Mun Road, additional climbing lanes at Sam Shing Hui, So Kwun Wat, Tai Lam and Ting Kau have to be constructed by cutting back some steep rock slopes above the Tuen Mun Road Kowloon-bound carriageway. In general, the geology and geometry of the slopes along Tuen Mun Road are both difficult and complex.

4. Following the rockfall incident in August 1995, the Contractor called in an expert in rock engineering to inspect all the relevant slopes. In September 1995, the Contractor submitted a claim that portions of the work at Sam Shing Hui, So Kwun Wat and Tai Lam were legally or physically impossible to proceed in accordance with the terms of the Contract, which required three full width lanes in both carriageways be kept open at all times under general circumstances.

5. The disputed works at Sam Shing Hui and So Kwun Wat were later completed in early February 1996 under a supplemental agreement (without prejudice to the impossibility claim) which permitted the closure of the slow and middle lanes of the Kowloon bound carriageway for 2 months to provide a safe buffer zone for the slope cutting works. The remaining road width including the central reserve was fully utilised to provide three Kowloon bound and two Tuen Mun bound lanes.

6. Site conditions at the disputed section of Tai Lam are more difficult where the slopes are higher and steeper. It is also not possible to adopt a similar approach to that for the works at Sam Shing Hui and So Kwun Wat due to the site geometry and limited space. Further, the Contractor insisted on having the Kowloon bound carriageway completely closed before rock excavation could be undertaken safely. The Government found this proposal unacceptable and works thereon have since been suspended by the Contractor.

POLICY STEERING GROUP

7. A Policy Steering Group (PSG) comprising senior representatives of Transport Branch, Works Branch, Finance Branch, AGC, Transport Department and Highways Department was set up in January 1996 to oversee the issue of the impossibility claim and to formulate the best way forward for the early completion of remaining works at Tai Lam.

MEDIATION

8. In February 1996, the Contractor instituted mediation proceedings against the Government to resolve the dispute over the impossibility claim in accordance with the dispute resolution provisions in the Contract. These proceedings are mandatory and have binding effect upon the parties under the Contract, subject to a further right of arbitration. Highways Department commissioned consultants for the necessary geotechnical expert advice for the mediation while legal advice was obtained from counsel and private solicitors via AGC. Eventually the mediation took the form of an adjudication in which both parties were represented by private counsel and solicitors and led evidence from expert and factual witnesses during a hearing between 13 and 22 May 1996. The appointed Mediator is a distinguished Queen’s Counsel and former High Court judge specialising in construction law.

9. The Mediator delivered his decision on 22 June 1996. This was in favour of the Contractor. The Mediator accepted the evidence of the Contractor’s experts and held that it was impossible for the Contractor to complete the works in strict accordance with the Contract, particularly in relation to lane closures and safety of operation. The contractor was accordingly relieved from his obligation to complete those works under the Contract. He further recommended that it would not be in the overall interest of the public to pursue the dispute in arbitration and that both parties should attempt to negotiate alternative arrangements for completion of the outstanding works.

ARBITRATION

10. In the light of the mediation outcome, the Government has sought a second legal opinion on whether the Government has a good case for pursuing the dispute in arbitration. Based on the Mediator’s decision which has binding effect upon the parties and further legal advice received from private counsel and AGC, and after considering the pros and cons of different courses of action, the PSG decided not to pursue the impossibility claim in arbitration in the public interest. The outcome of an arbitration was considered at best uncertain and could result in substantial additional cost to the Government in excess of $20M as well as further delays in completion of the climbing lane.

THE WAY FORWARD

11. We consider that there is a need from the traffic viewpoint, for the climbing lane at Tai Lam and the remaining works to be completed as soon as possible. The widening work at Tai Lam also has the general support of the Tuen Mun District Board. To achieve this, we will commence a study to identify and establish the feasibility of various works options taking due account of safety to the road users which is of prime importance, traffic constraints and stability of the existing slopes. A realistic estimate of the cost and timing for the works will also be made. This study, including some site investigation works to provide data for the preliminary design of the feasible scheme, is expected to take 6 months to complete.

12. In order to expedite the process, we are considering the prospect of direct appointment of a competent consultant on a lump sum fee basis. Such arrangement is an exception to the normal open tender practice but would reduce the time required for the normal consultants selection procedures by about 4 months. The Government would have adequate control and supervision over the consultancy. We expect the study to commence by end October for completion in April 1997.

13. Subject to the feasibility and effectiveness of a scheme being established, the detailed planning, design and implementation of the works can start soon afterwards. We will carefully consider how best to employ a contractor to complete the works within the shortest possible time, either by means of the normal competitive tendering process or through direct negotiations. Construction work is scheduled for completion by the end of 1999.

CURRENT CONTRACT

14. Apart from the disputed section at Tai Lam, all the climbing/acceleration lanes under this contract have been completed and open to traffic. Initial observations indicate that these additional lanes are well used. The outstanding works include only minor road and drainage works, minor slope remedial works, the erection of four overhead sign gantries at Ting Kau for the opening of the Ting Kau Bridge next year, and general site clearance. The Contractor is required under the Contract to complete these within the maintenance period, which is 12 months from the substantial completion of works. The final sum of the Contract, excluding the outstanding works at the omitted section of Tai Lam, is estimated at about $500M.

Highways Department
October 1996

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