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Chek Lap Kok consortium seeks £278M settlement

NEWS

LAST DITCH efforts to settle nearly £300M of outstanding claims were kicked off in Hong Kong this week by the BritainChina-Japan consortium (BCJ) that built the Chek Lap Kok airport passenger terminal.

The consortium, which includes Balfour Beatty and Amec International Construction, started a quasi mediation with the Airport Authority (AA).

The other partners in BCJ are Kumagai Gumi (HK) - now Hong Kong Construction, China State Construction Engineering and Maeda of Japan.

Negotiations are headed by Neils Kraunsoe, former project director on the Exhibition & Convention Centre extension, who was appointed AA director of special projects with specific responsibility to resolve outstanding claims.

There is added urgency as Kraunsoe leaves his position at the end of July and unresolved claims are likely to involve lengthy and costly arbitration.

BCJ is believed to be claiming about £278M for extra work resulting from variations and design changes in the 18 months before the terminal was completed in April 1998.

In September 1996, BCJ received £130M from the AA which covered all claims up to then. As part of that deal, BCJ agreed to complete the passenger terminal by April 1998 when the airport was originally due to open. The opening was later delayed to 6 June 1998.

As a result the current claims cover the period from October 1996 to April 1998 as construction of the terminal reached its peak. Depending on the results of the mediation the total cost of building the Foster-designed passenger terminal could top £1.4bn compared with the original contract price of £1.04bn.

The AA has already agreed payments with Paul Y-Downer, which built the airfield tunnels and southern runway, AEH joint venture which installed electrical and mechanical systems in the terminal, and a NishimatsuCostain group that built landside airport roads.

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