MAJOR RAILWAY WORKS IN - ON TIME & WITHIN BUDGET TO OPERATING SUCCESS

James BLAKE, OBE, JP Fellow, Institution of Civil Engineers (Gold Medal 1997)

ABSTRACT: Canton Railway Corporation (KCRC), a wholly Government owned entity, standing alone, is required by law to produce a return on investment based upon prudent commercial principles. In this paper KCRC’s successful on time and within budget approach to constructing US$9.4 billion of new railway works over a time span of eight years, is described in the context of risk allocation between the Employer and Contractors compatible with International practice. Contract awards were made after competitive tendering fully in accordance with the World Trade Organization rules applicable to procurement by Government agencies.

1. INTRODUCTION return to the main traction power supply transformers. In November 1994, the Governor of Hong Kong An advantage of the 25kV system was compatibility decided to proceed with the Western Corridor Railway, with the system adopted by China, since it was and in the following January, KCRC were invited to expected that trains would again resume services submit proposals to build and operate the railway. between Hung Hom and Guangdong, the original This had been preceded by findings of the Kowloon-Canton railway. Government’s Railway Development Strategy from the late 1980’s onwards. In fact through train services did recommence from early 1980’s onwards. In addition to the domestic The original brief was for three rail services to be service along East Rail, KCRC receive freight trains provided, namely a domestic service for Northwest from China into Hung Hom drawn by diesel residents, a cross-border rail service locomotives. from the Guangdong Province of southern China to the Kwai Chung Container Port in Hong Kong, and a From 1988 onwards, KCRC began operating a Light cross-border passenger line. The alignment of the Rail service in the north and western parts of the New railway is much the same as that we see today. Territories linking the new town areas between and Yuen Long. In 1993, 40 million cross-border passenger trips were recorded, a number that was forecast to double in 10 2. RAILWAY DEVELOPMENT years. During 2003, there were in fact about 120 KCRC had been seeking to enhance its rail freight million passenger trips across the boundary between capability from 1991 onwards, with a port passenger the Hong Kong SAR, and Guangdong/Shenzhen. line proposal to the Government in 1993 and building on this for the Western Corridor Railway detailed KCRC was a natural choice to build and operate this feasibility study culminating in its full proposals to the new railway, having been in existence since the year Government during 1995. By April 1996, a total of 1910 when it opened for traffic with two steam US$55 million had been spent on proposals leading to locomotives for mainline operation and a further two West Rail, involving banking, legal and land for shunting purposes. In September 1963, the last specialists, apart from its core consultants. Given the steam locomotive was scrapped, being replaced with status of the project, however, the West Rail Division diesel-electric locomotives from 1955 onwards. Diesel comprised mainly project consultant contract staff. became the backbone of the KCRC passenger and freight services between Lo Wu at the boundary and During this period of planning, the primary factors the Hung Hom terminus in Kowloon, until the behind the viability of the railway were revenues from electrification programme was completed in stages passengers and freight, involving passenger trip during 1982-1983. models, fare assumptions, and the attractiveness of a rail freight service in and out of southern China. The KCRC electric trains were configured in 12-car Despite the integrated nature of the approach taken, it consists, each train receiving power from the overhead was clear from the forecasts that the commercial 25-kV, 50 Hz single phase supply operating up to a viability of the railway would be satisfactory only maximum speed of 120 km/hr. During the early days with the inclusion of freight services. To provide a of operating the electric railway, occasional service better base for viability calculation, it was also interruptions occurred when the overhead catenary assumed that property development would take place system was disrupted by arcing at transformer along the railway with income flowing to the locations. This was subsequently designed out of the Corporation. system by relying principally upon ground-earth

Passenger forecasts were based on the same gazettal, objections and statutory approval for assumptions adopted by the Government for its own compulsory purchase. Of particular concern was the railway development studies, assuming a 1992 travel impact on the community at large arising from the pattern and a conservative population forecast of 7.5 construction and operating noise of the railway, given million in mid-2000. Of particular importance, the that the railway alignment would cross a relatively population in the north and west parts of the New rural part of the territory between the growing new Territories would increase by about one-third which townships, with much of the area crisscrossed by would represent the major part of Hong Kong’s drainage channels and subject to the risk of flooding population growth. during heavy rainfalls. Rainfalls can exceed 300 mm per hour in localized areas. It was decided therefore Cross-border passenger trips were expected to grow at that the railway would run entirely above ground to an annual rate of about 5 per cent, considered a minimize land and community impacts in the north conservative projection. and western parts of the New Territories, running above major drainage channels and at locations where In November 1996, the Governor-in-Council no other option was available due to ground-level responded to the proposals from KCRC by deciding constraints. that a new railway known as West Rail would be built in phases with the First Phase extending from Tuen Viaducts also avoided disrupting existing road Mun, through the new towns of the west and north transportation corridors, and maximized the parts of the New Territories, linking with the urban opportunity for connectivity between rail and road area by way of a long section in tunnel with an initial users at the above ground stations. As we shall see terminal station in . RDS I also later, the adoption of railway viaducts and appropriate identified the need to enhance the capacity of East technology also made it possible for West Rail to be Rail for passenger services, and to provide a second designed in compliance with the very strict Noise crossing for rail passengers into Shenzhen, the Special Control Ordinance which was already in place, and Economic Zone which neighbours the territory. the Environmental Impact Ordinance which was enacted in April 1998. These Ordinances are amongst The Government conducted a second Railway the strictest in the world in terms of protecting the Development Study which was made public in 1998 community from noise and intrusive impacts, alongside various studies related to road development particularly so for the New Territory section of West in the territory and additional crossings into southern Rail, much of which, runs through areas identified as China. rural by nature and therefore much more sensitive to railway noise intrusion. Government’s stated aim was to bring railway travel within easy reach of Hong Kong’s entire population, Property development, having been identified as an using both KCRC services, and those of the Mass important factor underlining operational viability, Transit Railway Corporation which runs broadly from envisaged a construction of perhaps 44,000 homes east to west, either side of the harbour and the new over a seven-year period in proximity to or above airport with the urban area and central business West Railway followed by similar property districts. development along other new railway lines. Apart from property sales providing revenue to fund the KCRC’s envisaged programme of capital projects was capital expenditure on the railway, residents in these expected to lead to a ridership of 2.2 million by 2008, new homes were expected to be an important source about double the combined East Rail and Light Rail of patronage for the new railway. The number of new ridership at the commencement of West Rail. This homes would also be a significant contribution to would mean KCRC route length increasing by 140 per Government’s long-term housing strategy that was in cent, and an increase in average Net Fixed Assets of force at that time. 40 per cent. The book value of assets was forecast to increase by a factor of about 5 times over the period, Interconnectivity between KCRC and the existing or with a substantial part of this funded by borrowings, envisaged transportation links can be categorized resulting in the net book position. under three headings. Firstly the stations provide direct passenger interchanges between existing 3. THE CHALLENGES railways, and all stations are provided with means of Given that Hong Kong is one of the most-densely easy access for passengers arriving or departing by populated cities in the world, major difficulties were taxis, buses and cars. Under the second heading, foreseen in acquiring the necessary land for the project provision was made for West Rail to accept freight involving almost 1,000 lots in private ownership, services from China via a future Northern Link from necessitating the enactment of a new railway Lo Wu connecting with West Rail just before entering Ordinance under which land could be acquired the underground section. The third heading covers the expeditiously, subject to a period of about one year for southern section with direct connections into MTRC

stations, and separately ground level facilities for Given the scale and complexity of the project, it was passengers using taxis, buses and cars at East Rail essential that strong and effective leadership was Extension links. exercised at all times by the KCRC Management Board represented by the CEO and a Capital Projects 4. TECHNICAL STUDIES Group led by the Senior Director with strong input During 1997, the alignment and design of the railway from the operating divisions of KCRC, and direct was progressed by a further series of technical studies control by the West Rail Division. A specialist land up to the stage of about 25 per cent scheme design consultant was engaged to provide expert staff for all completion. This enabled a project to be fixed in terms aspects of the land delivery programme, except those of a capital expenditure budget, the acquisition of land, matters which had to be dealt with by the Lands funding cost and pre-revenue operation expenditure Department of the Government as statutory prior to passenger services. This was fixed at US$ 8.3 procedures. billion in Money of the Day (MOD) terms, taking into account a forecast inflationary trend over the likely The Environmental Impact Assessment (EIA) which seven years to project completion. was a deliverable from the technical study phase was a foundation document for the designers to develop the The operation and planning parameters adopted for technical solutions and construction methods the detailed design studies were based upon the satisfying the construction phase and operational noise existing East Rail and 12-car train consists for constraints. A further deliverable from the technical convergence with an ultimate KCRC network for study phase was the West Rail General Conditions of passenger and freight services. The successful design Contracts and the draft specifications for capital works and procurement of a safety critical system for train and railway systems. Reference was made to similar control and signaling, was recognized as a dominant documentation used in Hong Kong projects by the critical factor from the start of project implementation. Government, the Mass Transit Railway Corporation The process adopted for the procurement of the train and the Airport Authority. All of these documents control system for West Rail was a “funnel” embrace the doctrine of fair allocation of risk between procurement approach. KCRC invited expressions of the Employer and the Contractors, which is enshrined interest from suppliers based on system concepts, and in the FIDIC Conditions of Contract. The adoption of potential suppliers then responded to the FIDIC principles enables KCRC to attract a broad Corporation’s system concepts by way of a formalized base of highly experienced International contractors, documentation process backed up by computer as well as local contractors, when inviting tenders for simulations. A fixed sum was paid to those who were construction of the new railways. not invited to proceed and three suppliers were eventually invited to tender for the train control and Let me just remind you of the FIDIC principles. The signaling contracts against very clearly specified conditions were published for the first time in 1957 system requirements. The funnel process decision and and are recognized by international agencies such as the activities involved occupied much of the first year, WTO and the World Bank for procurement of major but enabled certainty to be injected into the operating construction works. The conditions are intended to characteristics of the railway at the stage when the fairly allocate risk and responsibilities between the resulting benefits would be of maximum value to the parties involved, including independent administration heavy civil engineering design which followed. of the contract through the construction phase. As we can see from this slide, the relationship between the By the end of this first year, the technical study client and the contractors in terms of risk allocation, programme had been substantially completed, and five varies widely. KCRC chose to adopt a lump sum engineering consultants were appointed to proceed approach with fixed price tender subject to measure with the detailed design of West Rail leading to the variations if so instructed. preparation of the tender documents. Each consultant was awarded a contract in competition with at least The background to this was the obvious need to avoid four other consultants on a pre-qualified list of the causes of project under-performance such as these consultants, submitting lump-sum proposals for which are set down on this slide. A strong KCRC design services on the one part against a clear brief of team would at all times be proactive in dealing with services to be provided. By this time, the Government the relationship between the Engineer supervising had become concerned that the increase in construction and the Contractors. In this respect, the cross-boundary travel would eventually create KCRC Conditions of Contract clearly describe the problems for the existing East Rail, and requested KCRC Project Team’s involvement, differing KCRC to commence technical studies which would somewhat from the FIDIC relationship between lead to the East Rail Extensions being undertaken in Employer and Contractors which was considered parallel with West Rail. unnecessarily passive. The adoption by KCRC of the team approach for West Rail and the East Rail 5. KCRC TAKE CONTROL

Extensions was a major factor in the successful Contracts had provisions for variations, and to accomplishment of new railway construction. facilitate this all contractors tendering were required to submit a schedule of rates and major quantities, A multi-contract approach was adopted to ensure that which was subsequently incorporated into the relevant the Corporation had maximum visibility over the contract. performance of contractors and the work in progress. KCRC’s strong client-based organization was able to 7. CONSTRUCTION HIGHLIGHTS ensure real time co-ordination and leadership from the The size and complexity of designing and constructing highest level. Given that KCRC had not previously the West Rail above ground stations, was a daunting built stations of the complexity needed for West Rail, challenge to everyone involved. is a fully designed approach was adopted. Consultant an example illustrating the sheer size and impact of designers provided working drawings for civil works, building the station in an established new town area, building services, architectural building services and above an existing drainage channel, the width of finishing works. The contractors were obliged to which can be seen in the distance. This resulted in provide for the integration of works by the system many programme and construction constraints specialist contractors within the station public and especially to minimize the risk of flooding. The back-of-house areas. adjacent homes and schools also had to be protected at source from noise impacts resulting in strict control 6. CONTRACT AWARDS and limitations upon working outside the normal day KCRC approach to the award of contract was one of a time hours. The ground level areas for the future proactive partnership backed up by a fair and passenger bus terminal can be seen together with equitable process, both the tendering process and access ramp to concourse level, taxi and car drop-off assessment was as transparent as possible. The areas. Light Rail which crosses the station at its far Corporation’s Managing Board was the authority for end and runs in close proximity to one side, was raised approving all contract awards. Contract documents above existing level and connected into the station at clearly describe how the construction risks would be concourse level, both for passenger convenience and dealt with by KCRC and its contractors. In the event to improve road junction flow characteristics. The of a dispute arising during the construction of works, viaduct approach to the station, as at other discreet the documents also described how these would be locations along the railway, is enclosed to contain dealt with whilst construction was in progress, noise impact. including the variation process by which the contractors would be fairly paid for works found to be is another example, this time outside the tender documents. illustrating the problem of building above an existing road junction and Light Rail, with a school in close Contractors having been pre-qualified were required proximity. In common with other stations, the to submit a tender in full conformity with the platform area is enclosed by , drawings and specifications attached to the tender which open and close together with the train doors, documents, failure to do so resulting in automatic enabling trains to stand alongside the platform in an rejection of the tender. Having done so, however, open air environment, and thereby reducing the with contractors were allowed to tender alternative of the station box. proposals fully priced in the manner required for conforming tenders, but taking advantage of a was built on a green field contractor special expertise. site following land resumption in Kam Tin Valley for the West Rail Depot. The station is surrounded by a For civil construction, the majority of contracts were large transport interchange and a vehicle carpark area awarded by way of fixed lump sum against detailed for passengers from surrounding areas using ground drawings for construction prepared by the design transport. consultants. Since the design risk was with KCRC, the Corporation also accepted unforeseen risks that might During the Environmental Impact Study for West Rail, emerge, for example, unexpected ground conditions. the problem relating to railway noise, both during Special civil works such as tunneling and railway construction and operation, became a serious issue. system works including signaling and track works, Within enclosed stations, operating noise could be were awarded by way of Design and Build Contracts. contained. However, the problem of operating a For these better contracts, since the design was railway within a completely contained viaduct, some undertaken by the contractors or specialist designers 30.5 km in length, was clearly unacceptable from the employed by the contractors, the design remained with KCRC point of view and brought with it safety related the contractors, and any unexpected ground conditions issues, particularly should emergency situations arise. or similar unforeseen risks were for the contractors to find design solutions. The original viaduct design was developed with noise control measures in view. An important part of this

approach was the design of the rolling stock itself, length was driven by conventional rock tunnel which incorporated skirts along the whole length of methods, and at 5.5 km. it is the longest transportation each carriage to form a noise plenum under the train, tunnel in Hong Kong. The contractors’ alternative with areas of the underside at bogie locations covered design, which was accepted, adopted a single tunnel with sound absorbent material and special noise approach with a center-wall to provide the necessary reduction measures provided for the air-conditioning separation between the tracks, four hours of fire units mounted at roof level. The pass-by level for the protection, and passenger evacuation. train was specified not to exceed 83 dB(A) on ballasted tracks at 130 kph. In the event the The section of tunnel after Tsuen Wan West again was multi-plenum noise containment system for the a contractor alternative design, using over part of its viaduct section proved satisfactory, except at a few length “Earth-pressure-balanced tunnel boring locations where the line of sight to sensitive receivers technology”. At 8.4-metre external diameter, this was resulted in slight excedence of the Noise Control the largest tunnel boring machine ever employed in Ordinance limits for very early morning operation. At Hong Kong, and successfully overcame a potential the receivers, these noise limits range from 60-65 major programme delay which arose in resuming a dB(A), and were finally achieved by introducing large multi-occupant industrial building that straddled plenum enhancement measures at rail track level the route of the tunnel. Apart from this the ability to coupled with additional noise barrier protection along tunnel at shallow depth in the decomposed soil and the top of the viaduct parapets. rock conditions, without serious disturbance at ground In designing the viaducts, the approach taken was to level, avoided cut-and-cover construction that maximize constructability, including parallel work on otherwise would have impacted on the existing major foundations and superstructure to minimize overall roads and footpaths above the tunnel alignment. programme duration for viaduct decks to be available for the following contractors. At the same time, the 9. STATION DESIGN Corporation realized that contractors would propose is located within a public park, and in alternative designs and these were accepted at the time part below an existing major road viaduct structure of tender, subject to tenderers demonstrating that with the soffit of the viaduct serving as the roof of the the alternative provided equivalent noise and vibration rail tunnel at this location. The alignment places the reduction performance. In the event an alternative railway about 20 metres from Mei Foo Estate, a large design for the viaduct was accepted. residential complex. The resulting community problems required intensive communications relations Apart from the design characteristics of the viaduct to by the project team, supported by the KCRC corporate absorb train generated noise and vibration, special relations team. track work system along the whole railway was employed. This involved considerable research into Mei Foo and Nam Cheong stations are major floating slab systems then under construction or in interchange stations between West Rail and the Mass operation, particularly by the railway authority Transit Railway, with interchanging passengers also to Toronto, Canada. Sections of floating slabs had use fully air-conditioned routes with escalators at previously been employed in Hong Kong by MTRC, change of levels. Barrier free access is provided but the West Rail system was by far the longest and throughout the new railway for those who are most ambitious length of such track undertaken visually-impaired, or unable to walk. Lifts are anywhere at that time. Apart from design provided from platform to concourse levels and where consideration, the construction of the floating slab necessary to public transport interchange facilities. At tracks along 90 per cent of the 30.5 km railway was , KCRC and MTRC came seen as a potential programme risk, but in the event together to design the station as the first combined the contractors involved developed an effective station in Hong Kong, serving both rail networks, with method of construction which enabled the permanent the station being controlled jointly from a single way to be completed and commissioned in good time control room. Passengers using Octopus contactless for the following railway system contractors. travel cards move between the two rail networks, through a single set of automatic gates. The innovative solutions for environmental performance and noise control adopted for West Rail Architectural building finishing work for the station were also adopted and enhanced for East Rail interior in general adopts the MTRC experience with Extensions. concourse and platform floors finished with resin-bond terrazzo tiles, and vertical wall surfaces are 8. TUNNEL DESIGN covered with vitreous enamel panels. Ceiling systems From Kam Sheung Road Station and after passing generally comprise absorbent panels which drop down through the Maintenance Centre, the railway is for ease of maintenance with space for light fittings, entirely in tunnel for the remaining 9 kilometres to the public address speakers and the like. All level changes present terminus station at Nam Cheong. The first are provided with escalators with adequate capacity

for peak hour travel and emergency evacuation. Station signage also received particular attention given In summary, the approach to West Rail can be the size and the number of destination points considered a success, particularly since it was the first surrounding the West Rail stations in particular. The major project to be undertaken by KCRC for very security system throughout the railway is directly many years, and indeed was the largest civil accessible by the dedicated police unit from the Hong engineering project in Hong Kong since the new Kong Police Force, which patrols the railway airport. The Quarterly Review Meetings (QRM’s) networks. introduced by KCRC are recognized as a major contributory factor, a partnering approach which is the 10. TESTING AND COMMISSIONING most effective means of undertaking major projects. The testing and commissioning of all railway systems The QRM’s were conducted both formally in opening and the rolling stock was designed into the systems sessions as well as in closed-door workshops. The from commencement, and proceeded as intended up to involvement of KCRC’s construction and operation and including pre-revenue trial operation. The staff in problem solving with designers and outbreak of SARS during the early part of 2003 contractors has been beneficial for both West Rail and presented a number of challenges to be overcome, East Rail Extensions. since this period had been programmed for completion of the field testing and commissioning phase, East Rail Extensions are likewise ahead of programme particularly integrating systems installed by different with two out of three extension lines already serving contractors. The commissioning of the bus the pubic. The forecast cost to completion for all interchange facilities requiring the introduction or current railway works is still within the US$9.4 billion re-routing of bus services, re-scheduling Light Rail original budget. services and staged opening the new Light Rail platforms for passenger use. The traveling public at A particular aspect of the QRM sessions for the new large was informed by way of various Government railway projects was the emphasis given to site safety, departments and KCRC of the arrangements to be in including when necessary a dressing-down of the place for the opening of West Rail by way of a fully senior management personnel in attendance on safety co-ordinated media campaign. matters. Together with regular safety audits of all sites, these activities contributed to the impressive overall During the trial running and pre-revenue phase which safety records achieved by West Rail, with only one preceded the opening of West Rail in December 2003, fatal accident throughout the entire project. The initial difficulties resulting from EMI and ground original incident rate of 1.6 reportable accidents per current effects primarily on the signaling and 100,000 hours work at the end of the project had been train-borne control systems had to be overcome. This brought down to about 1 per 100,000. The required a concentrated team effort over a period of construction industry in Hong Kong at large has had a six weeks, involving contractors and KCRC staff. bad safety track record over very many years, and the Punctuality and delivery targets for operating the efforts being made to improve the situation have been railway were set at 95% and 97% consistently, before significantly assisted by the West Rail performance. the decision was taken to open for public services. This has been taken forward and further improved on Since the opening of the railway, these percentages by the East Rail Extensions team. have climbed to over 99.5%, a remarkable achievement for a new railway of this nature. Two 12. FINAL REMARKS new lines of East Rail Extensions were opened in Project management is undoubtedly an art, not a 2004, and the lessons learnt from West Rail have been science, and relies heavily on people dynamics. The applied to very good effect in both the construction major railway projects successfully completed by and operation of these new railways. KCRC during the past eight years, have again hammered home this point. But problems will be 11. ON TIME AND WITHIN BUDGET encountered, and part of the art is to find the best West Rail was successfully opened ahead of the date win-win solution by negotiation and compromise if set by the Government at the commencement of the necessary. This was the case with West Rail, when project, and the original capital cost budget of US$8.3 dealing with unexpected ground conditions. It was billion was reduced to US$6 billion. A substantial necessary to enter into supplemental agreements with reduction in cost was achieved in 1998 by means of a sub-contractors. These agreements resulted in value engineering exercise at the detailed design stage. programme delays being recovered, such that When it became obvious that cost estimates were completion was finally achieved in accordance with forecast to increase to an unacceptable level, a major the programme dates set in 1997 at the value engineering exercise led to the reduction of train commencement of the project. Time against cost, and lengths from 12 cars to 9 cars maximum. This alone value for money was the over-riding objective when resulted in shorter stations, and substantial cost negotiating supplemental agreements, in the light of savings. unforeseen events encountered during construction.

Wrapping up major problems has enabled the final account process for the new railway works to move forward speedily, and with a few exceptions contractors have accepted final valuations of work done and payments have been made accordingly.

Thank you for the opportunity of being with you today. I hope that this highlight of some of the lessons learnt by KCRC, in successfully completing major railway projects, will be helpful during your future careers.