FIDIC MIDDLE EAST CONTRACT USERS‘
CONFERENCE - DUBAI, 27 FEBRUARY 2013
PLANT & DESIGN BUILD
CONTRACT – LATEST
REGIONAL EXPERIENCES
FIDIC Middle East Contract Users’ Conference, Dubai
27/02/2013
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PLANT & DESIGN BUILD CONTRACT – LATEST REGIONAL
EXPERIENCES
Agenda
1. Design responsibility, Sub-Clause 5.1 Yellow Book
2. Yellow Book (YB) vs. Silver Book (SB)
3. Contractual reality in the Middle East
4. Lessons (to be) learned
FIDIC Middle East Contract Users’ Conference, Dubai
27/02/2013
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PLANT & DESIGN BUILD CONTRACT – LATEST REGIONAL
EXPERIENCES
1. Design Responsibility, Sub-Clause 5.1 YB
1. The Contractor’s obligations as per Sub-Clauses 4.1 & 5.1
YB:
– Design obligation is with Contractor.
– Obligation to scrutinise the Employer’s Requirements
(sufficient time required).
– Responsibility for Employer’s Requirements remains with
Employer.
2. Employer’s Requirements as per Sub-Clause 1.1.1.5 YB:
“purpose, scope and/or design and/or other technical criteria”.
3. Errors in Employer’s Requirements and/or Design Errors:
entitlement for EoT & Cost as per Sub-Clause 1.9 YB.
4. Standard problem: “reasonable skill, care and diligence” vs.
“fit for purpose”, i.e. “best endeavor” vs. “hard commitment”.
FIDIC Middle East Contract Users’ Conference, Dubai
27/02/2013
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PLANT & DESIGN BUILD CONTRACT – LATEST REGIONAL
EXPERIENCES
2. Yellow Book vs. Silver Book
The main differences between the Yellow and Silver Books are:
1. The increased degree of design risk placed on the Contractor
by the Silver Book.
2. The Contractor becomes responsible for the correctness of
Employer’s Requirements, Sub-Clause 5.1 SB.
3. The firm placing of the ground conditions risk on the
Contractor by the Silver Book.
FIDIC Middle East Contract Users’ Conference, Dubai
27/02/2013
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PLANT & DESIGN BUILD CONTRACT – LATEST REGIONAL
EXPERIENCES
3. Contractual reality in the Middle East
1. “Fiddle FIDIC“, i.e. heavily amended General Conditions.
2. Employer does not accept ANY responsibility for “Employer‘s
Requirements“ and/or definition of the “purpose“.
3. Recent examples: Qatar, UAE, Bahrain.
4. Result: higher risk profile than Silver Book approach.
5. In general:
– Tendency to use Red Book instead of Yellow Book, Yellow
Book instead of Silver Book, Silver Book instead of [???].
– Fixed lump sum approach.
– No EoT & Cost entitlement at all, because claim is seen
being similar to a dispute?!?
FIDIC Middle East Contract Users’ Conference, Dubai
27/02/2013
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PLANT & DESIGN BUILD CONTRACT – LATEST REGIONAL
EXPERIENCES
4. Lessons (to be) learned
1. Estimate or gamble?
2. Read, understand and price the contract.
3. Estimation is more than direct & indirect costs only, i.e. risk
allowance!
4. Note: Key Shari‘ah principle is “good faith“ (sic!) and all
jurisdictions in the GCC are directly or indirectly governed by
the Shari’ah.
5. Advice: Insist on fair and transparent risk allocation;
that is why you use (pure) FIDIC.
FIDIC Middle East Contract Users’ Conference, Dubai
27/02/2013
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PLANT & DESIGN BUILD CONTRACT – LATEST REGIONAL
EXPERIENCES
Thank you.
For further information, please consult the EIC Contractor’s
guides:
Contact:
Martin Albert
Head of Legal Affairs
HOCHTIEF Solutions Middle East Qatar W.L.L. - a company of the HOCHTIEF Group
martin.albert@hochtief-middle-east.com
FIDIC Middle East Contract Users’ Conference, Dubai
27/02/2013
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PLANT & DESIGN BUILD CONTRACT – LATEST REGIONAL
EXPERIENCES
About EIC: Tasks & Objectives
Creating Business Opportunities
 No Budget Aid (Maintain the project
approach for infrastructure)
 EU Infrastructure Blending Facility for
Africa
Promoting Good Practices
 Quality-Based Competition (“MEAT”)
instead of lowest price
 Real Competition
(No unfair competition from subsidised
state-owned entities)
 Promotion of PPP approach in emerging  Use Country Systems only when
equivalent to international procurement
markets
(World Bank) standards
Enabling Networking & Services
 Balanced Contract Conditions
 Conferences & Workshops
(incl. Particular Conditions)
 Newsletter
 Effective Dispute Settlement
 Publications & Statistics
 Corruption-free environment (CoST)
FIDIC Middle East Contract Users’ Conference, Dubai
27/02/2013
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