Leighton Contractors bag $2.97 billion hospital project

Leighton Contractors bag $2.97 billion hospital project

After what must have been a nail-biting seven month wait, Australian contractor Leighton Contractors (Asia) has bagged a design-and-build contract for Tin Shui Wai Hospital worth HK$2.97 billion.

In a press release late last month, Leighton Contractors said it will partner with local contractor Able Engineering Company in a joint venture on the project.

The company, a subsidiary of Leighton Asia, India and Offshore Group, did not say what percentage stake it had in the joint venture.

Work has already started and on completion in mid 2016, the hospital will comprise of a 12-storey complex with basement and will provide in-patient care services including 260 beds.

The project is one of the biggest so far in value to use the New Engineering Contract (NEC) form which originally came from the UK.

Tin Shui Wai Hospital is set for completion by mid 2016.   (Architectural Services Department - HKSAR Government)

Tin Shui Wai Hospital is set for completion by mid 2016. (Architectural Services Department – HKSAR Government)

“The award of this contract positions the Leighton Asia, India and Offshore Group well to utilize this core competence [of building health facilities] to capture the opportunities arising in the health sector market as investment in social infrastructure continues to expand,” group managing director Ian Edwards said in the press release.

Leighton Contractors has previously built four major healthcare projects in Hong Kong and is currently building North Lantau Hospital.

The company’s involvement with the project dates back to December 2010 when Architectural Services Department invited applications for prequalification.

However it was not until March last year when tenders were finally called for submission by late June.

Asked if the wait from prequalification to tender award was considered lengthy, a spokesperson for ASD said: “The respective amounts of time taken for the prequalification of tenderers and tender exercise for [the hospital] are normal having regard to the scale, nature and complexity of the works involved.”

The tenders may have been submitted in late June, but it was not until January this year when the government formally applied to the Legislative Council’s Public Works Subcommittee of the Finance Committee for funds.

Legco funding approval was given on 8 February and the award for the tender was made on 19 February.

Asked if the prices given by the tenderers were used as the basis for the estimate of cost given to lawmakers in funding application, the ASD spokesperson said: “The budget approved by the Finance Committee on 8 February 2013 was based on a reasonable estimate of the cost required for the delivery of the project.”

Danny Chung

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