FIDIC Contracts for VT Project Managers (Part 1)

FIDIC contracts are international contracts specialized in procedural practices in everything related to building and construction for all international projects of all sizes, shapes and values, in addition to their distinction by drawing all legal, regular and standard ways to resolve all disputes arising from international contractors of all shapes and nationalities.

What Are FIDIC Contracts?

The term FIDIC is derived from the French origin of the International Federation of Consulting Engineers.

– Fédération
– Internationale
– Des
– Ingenieurs
– Conseils
 
It is headquartered in Switzerland and consists of 97 countries.
This union was established in (1913) by three national associations of consulting engineers in Europe, with the aim of promoting the common professional interests and concerns of the member associations and disseminating information of interest to its members.

As is well known, all international banks that lend to international contractors require that the contracting contract between them is a FIDIC contract، so that the international contractors can obtain the loan.

The first FIDIC contract issued for the standard models in the contract was in the year 1957, which is known as the Red Book.

Types of FIDIC Contracts

The International Federation of Consulting Engineers (FIDIC) has developed various types of contracts that govern the relationship between parties involved in the construction industry.

These contracts are widely recognized and utilized globally.
The most commonly used FIDIC contracts include the Red Book, Yellow Book, and Silver Book.
The Red Book is officially known as the FIDIC Conditions of Contract for Construction.
It is primarily used for construction projects that involve civil engineering works.
The Red Book outlines the rights, obligations, and responsibilities of the employer and the contractor.
It includes provisions for various important aspects of the project, such as variations, payments, delays, and defects.
The Red Book aims to achieve a balance of risks between the employer and the contractor.
The Yellow Book, also known as the FIDIC Conditions of Contract for Plant and Design-Build, is specifically designed for projects involving the provision of plant and equipment.

This contract is commonly used for projects in the power generation, manufacturing, and industrial sectors.

The Yellow Book places more responsibility on the contractor for the design and construction of the project.

It also provides provisions for testing and commissioning, as well as the handing over of the works to the employer.

Lastly, the Silver Book, or the FIDIC Conditions of Contract for EPC Turnkey Projects, is utilized for projects based on engineering, procurement, and construction (EPC) turnkey arrangements.

This means that the contractor is responsible for the entire project, from design to completion.

The Silver Book places a higher level of risk on the contractor, who is expected to manage the project efficiently, adhere to specified performance criteria, and deliver a fully functioning facility to the employer.

In conclusion, FIDIC contracts play a crucial role in the construction industry, providing a framework for fair and equitable relationships between various parties involved in a project.

The Red Book covers construction projects, the Yellow Book deals with plant and design-build projects, and the Silver Book is used for EPC turnkey projects.

These contracts outline the respective rights and responsibilities of the employer and contractor and aim to establish a balance of risks.

Understanding the different types of FIDIC contracts is essential for professionals in the construction industry, as it helps ensure seamless project execution and successful outcomes.

To be continued……..

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References:

1. British Institute of Economic and Political Scince lectures,(B.I.E.P.S). Londonn,United Kingdom.
2. I.C.A.C.C. Cairo,Egypt.
3. The Economic Unit of the League of Arab States , Cairo, Egypt.
4. The International Commercial Arbitration Center Cairo, Egypt.
5.New legal rules in FIDIC contracts, Dr. Samir Hamed Abdel Aziz El-Gammal, Cairo,Egypt.
6. Al-Morsal electronic network.
7. United Nations International Treatirs.