The tender for a planned Terminal 3 at Taiwan Taoyuan International Airport was finally awarded on Aug. 30. Since the tender for constructing the 640,000m2 terminal opened in 2018 — a combined tender for civil, electrical and mechanical engineering — the project has gone through many failed tenders, budget increases, redesigns and deadline extensions, and the tender has even been split into two parts.
The civil engineering part was finally awarded on March 30, and the electrical and mechanical engineering parts last month. The new deadline for completing the terminal is June 2026 — five-and-a-half years behind the original deadline in December last year.
The main tender for this project — the design — was awarded in 2015 to a collaboration of British architectural firm Rogers Stirk Harbour + Partners and CECI Engineering Consultants Inc Taiwan.
The design — which was the top choice of 11 attending tender committee members, including six foreign experts or academics — has a wave-shaped roof, roof gutters, glass skylights, large glass curtain walls and a streamlined ceiling with 130,000 petal-shaped aluminum tubes for sound absorption. People have praised the design, calling it stunning.
Who knew that a nightmare was soon to follow.
According to the bidding documents submitted by the two firms, the estimated cost of the terminal’s main building was NT$22.12 billion (US$797.5 million at the current exchange rate), which is within the budget announced in the airport operator’s tender notice.
The estimate’s items included engineering costs and scheduling, together accounting for 15 percent of the assessment points.
According to tender rules, if a project’s estimated costs exceed the budget, the bidder will lose points. Bidders usually use the announced budget as orientation for their cost estimate, and the selection committee usually does not spend much time on figuring out whether the estimate is realistic; as long as the estimate stays within the budget, the bidder is given a high rating.
Pragmatic design proposals with realistic cost estimates that would not exceed the budget are often not selected.
Unsurprisingly, when the airport operator issued the first engineering tender based on the two firms’ design, the project’s cost had already exceeded the budget by more than NT$39.5 billion.
This proves that the firms’ estimate was insufficient for realizing the fancy design and decorations. However, instead of abandoning the design, the airport operator increased the budget by more than NT$170 billion — something it seriously has to reflect on.
The operator should consider the example of the Tokyo Olympics’ main stadium. After the Japanese government awarded the design bid, it was discovered that the cost would exceed the budget by about ￥100 billion (US$909.1 million at the current exchange rate).
Then-Japanese prime minister Shinzo Abe was immediately informed, the design was scrapped and the tender reopened, saving ￥100 billion.
However, despite the huge increase in the budget for Terminal 3, the engineering tender attracted no bids, as potential bidders said that the budget was still too low for carrying out the plan, estimated construction time was too short and they would need to bring in large numbers of migrant workers.
After replacing the chairman of the airport operator’s board twice — and with the help of the Cabinet, the Ministry of Transportation and Communication, the Ministry of Labor and the Public Construction Commission — the operator and the two firms were required to change to design to reduce costs, and the tender was split in two: civil engineering on the one hand, and electrical and mechanical engineering on the other.
In addition, the introduction of more than 2,000 foreign workers was allowed.
When the construction tenders were awarded this year, the budget had continued to increase sharply, to more than NT$57.2 billion — NT$44.5 billion for civil engineering and NT$12.7 billion for mechanical and electrical engineering. This is about NT$35.1 billion above the two firms’ original estimate.
The skyrocketing cost and the six-year delay are unacceptable.Who should be held responsible? The designers blame inflation and additional requests by the airport operator, while the operator says that the designers are responsible, as their estimate was unrealistic.
However, the design was selected by the operator, and as it did not have the courage to reverse its decision, how can it claim compensation and how should the compensation be calculated?
The case shows how a stunning design that dazzles the selection committee often blinds their consideration of whether the cost might exceed the budget — because the estimate is incomplete or underestimates the cost.
The consequences are failed tenders, budget increases, extended construction times and so on. Discarding an overly flashy design and pragmatically selecting a suitable one is the only way to avoid repeating this kind of mistake.
Su Ming-tong is a retired secretary-general of the Public Construction Commission.
Translated by Lin Lee-kai
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