An enhancement of risk management under NEC3 engineering and construction contract

Pao Yue-kong Library Electronic Theses Database

An enhancement of risk management under NEC3 engineering and construction contract

 

Author: Wu, Xiuzhen
Title: An enhancement of risk management under NEC3 engineering and construction contract
Degree: M.Sc.
Year: 2014
Subject: Construction contracts -- China -- Hong Kong.
Construction industry -- Risk management -- China -- Hong Kong.
Construction industry -- China -- Hong Kong -- Management.
Hong Kong Polytechnic University -- Dissertations
Department: Faculty of Construction and Environment
Pages: ix, 125 pages ; 30 cm
Language: English
InnoPac Record: http://library.polyu.edu.hk/record=b2759213
URI: http://theses.lib.polyu.edu.hk/handle/200/7602
Abstract: The NEC Contract has been established and widely used in many countries. However, a comprehensive review of previous research studies on NEC Contract has indicated that there is a limited amount of empirical research focusing on this contract form, especially on risk issues in the context of Hong Kong construction industry. This research study aims to identify, assess and summaries the key factors associated with risk management so as to evaluate the enhancement of risk management under NEC Contract. Based on a comprehensive literature review and a series of structured interviews, a total of 14 key factors related to risk management inherent with NEC contract were identified, wherein the most three important factors are early warning, mutual trust and co-operation, and proper risk allocation at pre-contract stage. Further analysis on 14 key factors perceived was conducted to conclude that NEC Contract establishes a more practical mechanism to manage the risks including: Proper and clear risk allocation at pre-contract stage of project by selecting six main options to allocate the main risk, and by selecting other secondary options and modifying compensation event to deal with particular risks; Establishing a systematic procedure during the construction period by early warning system to deal with potential risks pro-actively and collaboratively; Improvement in project management by building project team with mutual trust and co-operation, partnering, efficiently communicating and etc. Particularly, an in-depth interview is conducted to concentrate on the enhancement of programme in managing risk of delay under NEC Contract. It is found that compared with traditional contact forms the programme in NEC3 can be better used as a practical management tool due to its accurately and detailed preparation, being updated promptly, and enhancement in solving disputes and assessing compensation event in terms of both time and cost. It suggests that the key factors perceived in this research, especially the most three important factors can be extended to the projects using other forms of contract to achieve the enhancement of risk management. More trials, raining, and support from government are also recommended for the better application of NEC Contract in Hong Kong.

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