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Saving grace

West Rail Management

To bring a major project in on time and to cost would be good.

But to achieve a 30% saving is almost miraculous.

Hong Kong has a highly mobile population, ' observes West Rail director Ian Thoms.

'We're around 7M people here, and we make 14M passenger trips a day. Of those, 11M are on public transport, with about 3.3M on the railway - MTR takes 2.2M and KCR 1.1M.

Of the 1.1M, some 800,000 a day are on East Rail and 314,000 on the light rail system, also owned and operated by KCRC.

But in recent years a missing link has emerged.

'West Rail is being built because the north-west New Territories is the fastest growing area in the territory: 800,000 people live along the corridor now, but the number will be well over 1M by 2011. They badly need a fast, efficient form of public transport.

'And there, ' says Thoms, 'you have a classic chicken and egg situation. The railway itself becomes a great catalyst for urban development. It will bring more residential development as people discover they can commute quickly into central Kowloon and Hong Kong.

And the railway brings other economic benefits, because it creates a strong link with the main centres of commerce, so more businesses will set up near the new West Rail stations.

It's already happened along the MTR lines and East Rail.'

Thoms predicts that completion of West Rail and new East Rail Extensions south to Tsim Sha Tsui and north to Lok Ma Chau, both now under construction, will see rail overtake buses as the region's number one form of public transport.

The West Rail project was brought to life in 1997. The first year's work of technical studies and developing outline designs moved swiftly into a detailed design phase, and it soon became clear that a combination of very clever engineering, strict project management, and a measure of luck would be needed to deliver the project for the target cost of HK$64bn (US$8.24bn).

'I arrived in April 1998 from MTR and detailed design had started, ' says Thoms. The alignment had been sorted out, with sections of tunnel and viaduct identified. It was planned to use 12-car trains to deliver a peak time capacity of 100,000 passengers per hour, and design of the tunnels, viaducts and stations was firming up.

'By summer 1998 we had built up the nucleus of our project team and started looking at anticipated outturn cost - we frightened ourselves, ' Thoms recalls.

'We were using broad brush figures based on cost per square metre and Airport Core Programme (ACP) rates, although we had a significant handle on concrete volumes and rebar. It looked as if the project could easily over-step the HK$64bn mark, which was an absolute no-go. We were forced to start looking for ways to radically cut costs.

'At about that time there was a bit of serendipity and happenstance, ' he says, 'which we can't really take credit for.'

Eight international firms had been asked to pre-qualify for the signalling systems contract.

Each had to demonstrate that it could develop and prove a system which met West Rail's demands for safety and reliability, as well as providing a minimum headway of 105 seconds. Three tenderers came up with the goods. 'We were certain we could run trains on our system to within 105 seconds.

That enabled us to revisit the size of our trains, ' Thoms reports. 'Our operating parameter was to provide a line capacity of 100,000 passengers per hour. It had been assumed there would be 12 cars, like those on East Rail - we were looking at each train carrying 4,000 passengers.

'But the signalling system gave us the opportunity to run up to 33 trains per hour. We concluded that we could run nine car trains carrying 3,000 passengers per train, giving us a line capacity of 99,000 passengers an hour.

'This gave us a big cost saving: If trains were 25% shorter we could make the stations 25% shorter, ' says Thoms. Because of West Rail's snaking alignment many of the stations had been unavoidably placed on curves.

But shorter trains meant the project team could get rid of curved platforms - straight platforms are safer to use and cheaper to build.

'Unfortunately we didn't have enough time to take the value engineering further, ' Thoms meditates. 'Having got our consultants to reconfigure the platforms we should have reengineered the whole spatial configuration of the stations. We could have made even bigger savings. As it was, we lengthened the design process by six months, but it was time and money that we've more than saved on the construction cost.

As a result of the redesign we've chopped six months off the construction programme.'

Shortening and simplifying the stations, with other changes, realised a 'fundamental' HK$4bn (US$515bn) saving.

KCRC's next major saving was delivered by events in the construction industry. The start of work on West Rail coincided with completion of other major projects, notably Hong Kong International Airport at Chek Lap Kok and its related projects, including the MTR Airport Express rail link. At the same time, Hong Kong's civils contractors were left desperate for work by the economic 'flu' that ravaged most of south-east Asia's economies.

'Contractors were very hungry. They put in knock down prices - 25% below our engineers' estimates, ' Thoms says.

'The economy was also going in the right direction for borrowing, with much lower interest rates. And the value of real estate dropped through the floor, so we made savings on land costs.'

KCRC received HK$29bn (US$3.74bn) worth of equity from the government, and managed to secure US$2bn in borrowings through Eurodollar and Yankee Bond launches on the international money market.

'We were very cash positive, ' sums up Thoms.

Over the course of construction nothing has seriously assailed KCRC's financial position. That is not to say, however, that there have been no problems or claims.

KCRC drew up its own contract form for West Rail, broadly based on the ICE and FIDIC terms, but with elements picked from Hong Kong Airport Authority, MTR and Hong Kong government airport core project contracts as well. Risk was shared, with the client taking responsibility for unforeseen ground conditions. The two big tunnel contracts - DB320 and DB350 - were the only exceptions, let as design and build contracts for which the contractors carried ground risk.

Thinking ahead

Trouble shooting is something into which the West Rail project team has put major effort.

With more than 200 contracts awarded since inception and, when the project was at the height of activity, with 67 contracts running simultaneously, disputes and delays on one contract could easily have affected others. It has partnered informally, pooling resources and expertise to resolve construction or contractual problems.

But the team has also been quick to jump on contractors when things go awry: 'If someone or something's fouled up we need to make that clear, and to achieve a prompt solution, ' says Thoms.

To mitigate damage to the programme when things have gone wrong KCRC has set up a monitoring and reporting system. 'We know what's happening on each contract and how the contracts mesh together. If there are problems on one we want to know how it will affect another. We will resequence work to preserve or recover the programme for follow-on contractors, ' says Thoms.

For example, he cites the resequencing of signalling and overhead line works following delays completing the track.

'Overhead line and signalling were meant to go in one after the other, following the permanent way, but because the viaducts were late [due to design changes, piling problems, adverse weather and delays at the interface between viaduct and stations] we moved signalling and overhead line installation into other available sections of the alignment. We then brought in additional resources to speed completion of the permanent way and keep the momentum up. What we didn't want was signalling and power contractors coming to a stop because the track wasn't ready.'

KCRC also rejigged the delivery of lifts and escalators for West Rail's nine stations. Lifts and escalators were initially to be delivered in a predetermined cascaded fashion, so they could be installed in stations over a rolling fit-out period. However, it became clear that station completions would be in fits and starts. Manufacture and delivery were therefore resequenced according to which stations came on line when.

'We held quarterly review meetings (QRMs) with all the contractors, consultants, and resident project management teams present. We set three monthly targets and used the QRM meetings to drive progress, ' says Thoms. Where works packages overlapped contractors had to meet to discuss interfaces between them, 'and these meetings and set the de-facto programme objectives for the next three months.'

Well oiled machine 'KCRC initially hired US project manager Bechtel to get West Rail up and running. The firm was doing a competent job, but its services didn't come cheap, ' says Thoms, who set about building up in-house expertise.

'By November-December1998 Bechtel's staff had all gone and we had 300 staff of our own.

Eventually our team grew to 800 strong. Our people were augmented by 560 resident site staff, employed by the detailed design consultants to supervise and administer the works they had designed.'

Engineers and project managers were recruited from the recently completed Hong Kong international airport at Chek Lap Kok, and from mass rapid transport operator MTR, particularly from the MTR team responsible for delivering the Airport Express rail link. 'A lot of people I knew already - we'd worked together and had shared experience of major projects. We hit the deck with our feet running.

Everybody knew how we worked.'

That KCRC's West Rail team ran like a well oiled machine more or less from the word go helped all aspects of the project, Thoms says.

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