International Federation of Consulting Engineers

Evgeny SmirnovEuropean Bank for Reconstruction and Development

Regional IssuesPros and Cons of using FIDIC Contracts Pros and Cons of using FIDIC Contracts

FIDIC MDB Harmonised Construction Contract Conference

Background Background

EBRDEBRD 3,374 projects for EUR 210.7 billion 3,374 projects for EUR 210.7 billion

EUR 71.1 billion invested by EBRD:EUR 71.1 billion invested by EBRD:

EUR 55.7 billion EUR 55.7 billion – – private sectorprivate sector

EUR EUR 115.45.4 billion billion – – public sectorpublic sector

Regional IssuesPros and Cons of using FIDIC Contracts

“There is nothing either good or bad, but thinking makes it so…”Hamlet, William Shakespeare

Questionnaire, April 2012• 20 questions about FIDIC contracts

– Section A; General Information

– Section B; Overall experience with FIDIC contracts

– Section C; Specific issues (anti-corruption, social and environmental provisions, Engineer’s role, DAB)

Responses• 12 countries in Eastern Europe, Turkey and FSU countries• Power, Transport, Municipal and Nuclear Safety sectors• 38 respondents• Contracts range: EUR 3 million to EUR 991 million

FIDIC MDB Harmonised Construction Contract Conference

Regional IssuesPros and Cons of using FIDIC Contracts

“Beauty is bought by judgement of the eye,Not utter'd by base sale of chapmen's

tongues…”Love's Labours Lost, William Shakespeare

View of EBRD• Well balanced contracts• Easily adoptable to specific country conditions• Specific MDB provisions included• Suitable for a wide range of projects• Well known on the market• Aimed at timely completion within the original cost• Presence of a professional engineering support • Efficient dispute resolution mechanism

FIDIC MDB Harmonised Construction Contract Conference

Regional IssuesPros and Cons of using FIDIC Contracts

“What's in a name? That which we call a rose…”Romeo and Juliet, William Shakespeare

View of Respondents • Users are generally satisfied• Well balanced risks of the parties• Fair and complete• Well known throughout the industry• Simple, but covering main contractual issues well, being based on vast experience• Standardisation and availability of the documents for different type of projects

FIDIC MDB Harmonised Construction Contract Conference

Regional IssuesPros and Cons of using FIDIC Contracts “Oft expectation fails, and most oft thereWhere most it promises…”

All’s well that ends well, William Shakespeare

Some Other Findings• Needs to be localised, as there are some conflicts with national regulations• Not well known by local contractors• Lack of experience and gaps with understanding on the Employer’s side• Open to claims• No control over delays during implementation• Cost and time over-runs are relatively common• Requires a comprehensive delay and disruption protocol• Engineers are biased and often act reactively• DAB is rarely used and inefficient • Sometimes forms of FIDIC contract used are inadequate to a project

FIDIC MDB Harmonised Construction Contract Conference

International Federation of Consulting Engineers

President Geoff French, UK

Vice-President Pablo Bueno, Spain

Secretariat FIDICWorld Trade Center 2Geneva AirportBox 311 CH-1215 Geneva 15 Switzerland Tel: +41 22 799 49 00Fax: +41 22 799 49 01

fidic@fidic.org www.fidic.org

Managing Director Enrico Vink