Hong Kong officials will award the contract to build a major quarantine camp by open tender, after they were heavily criticised for giving part of the 600-room project to a state-owned enterprise without following the normal practice.

The Architectural Services Department confirmed that the second phase of the facility, involving 500 rooms, on a site at Penny’s Bay on Lantau Island, would be awarded through the bidding process, which opened on Friday.

Construction was expected to begin in April and be completed in July.

Last week, the department came under fire for giving the first-phase contract, worth HK$194 million (US$25 million), to state-owned China Harbour Engineering, without a selection process. Officials cited urgency as a reason and stressed due process was followed. That part will be delivered by May.

On Friday, a department spokesman explained the decision was due to the project’s urgency amid the coronavirus epidemic, insisting the process complied with the relevant rules.

“To deal with the epidemic, government works departments acted swiftly to make appropriate commissioning arrangements based on practical circumstances, whilst complying with the government’s sourcing requirements and guaranteeing the quality of construction,” he said.

The camp, on a four-hectare plot near a site reserved for Hong Kong Disneyland’s expansion, is funded partly by the government’s Lottery Fund, which does not need the legislature’s approval.

The Penny Bay’s camp is among a number of quarantine centres being built to accommodate those who have close contact with confirmed cases of the coronavirus, which by Friday had infected 107 people locally, two of them fatally.

A HK$70 million contract for another quarantine camp at Lei Yue Mun Park and Holiday Village was awarded to state-owned China State Construction Engineering (Hong Kong).

Luo Huining, director of Beijing’s liaison office in Hong Kong, fuelled the controversy last week when he staged a photo-op and visited builders at the Lei Yue Mun camp, on which work finished four days early, to praise their efficiency and lauded the firm for “demonstrating its commitment”.

Ngai Hok-yan, a veteran civil engineer, said splitting the Penny’s Bay project into two had the benefit of allowing hiring specialist firms to do each part, but he added that the government came under pressure to make the second phase contract open bidding.

“Many people were asking why the first phase cost about HK$190 million when the quarantine camp at Lei Yue Mun cost only HK$70 million [US$9 million] in total,” he said.

On Friday, a government insider told the Post the first phase at the Penny Bay’s site involved levelling the ground and building the foundations, and needed to be expedited to deal with the growing health crisis.

He also defended the decision to directly commission state-owned firms, saying local contractors lacked the ability to deliver a “through-train” service to do both the groundwork and build the housing.

But a construction company boss rubbished the claims and said the government’s change of heart showed it was possible to divide the two phases of construction.

“Levelling the ground is a rather simple technique that all the major players in the sector possess, while a handful of local firms also have the know-how on modular integrated construction used in the quarantine camps,” he said, speaking on condition of anonymity due to the sensitivity of the matter.

The construction method involves the off-site manufacture of prefabricated housing units, which are transported for installation on-site.

“The two-phase development may or may not speed up construction, which will depend on the actual circumstances. But the decision is certainly a departure from convention,” he said.