FIDIC Contracts in Egypt25 Jul 2016 7788 Views
The term FIDIC stands for the International Federation of Consulting Engineers, FIDIC was established in 1913, headquartered in Genève, and is aimed at finding a resolution in construction sector.
The first edition of the conditions of the contract for works of Civil Engineering Construction was published in August 1957.
FIDIC represents engineers and consultants from various countries, originally it is made in English language, but mostly is used in the country original language.
The majority of the constructors nowadays in the Egyptian market demands to apply the FIDIC contract as it is more flexible and useful than the standard contract. FIDIC contracts are represented in few types: FIDIC Rainbow contracts and White Book Contracts.
Types of the FIDIC contracts:
1. FIDIC Rainbow:
• Red book: Conditions of contract for consultation for building and engineering works designed by the employer.
• Yellow book: Conditions of contract for plant and design build for electrical and mechanical plant, and for building and engineering, designed by the contractor.
• Silver book: Conditions of contract for EPC turn-key projects e.g.: Engineering and construction.
• Green book: Short form of contract.
• Gold book: Conditions of contract for design, build and operation projects.
2. FIDIC White book Contracts.
FIDIC are employed in a great number of most important construction, infrastructure and industrial projects such as Cairo metro project, Terminal 2 of the Airport and Damietta port, as well as projects financed by the World Bank; all are subject to FIDIC contracts.
The Structure of the FIDIC Contract:
• Contract Agreement
• General Conditions
• Guidance for the Preparation of the Particular Conditions
• Forms of Letter of Tender
Parties of the contract:
• The employer
• The contractor
• The engineer (supervisor)
Reasons for using FIDIC and its applicability in Egypt:
Whereas construction contracts are considered an adhesion contract, FIDIC contracts are more flexible and can be negotiated between the parties. It is not a ‘take it or leave it’ contract as the construction one but rather is created in a balanced form within the international scope of big projects. Moreover, it is worth mentioning that FIDIC contracts with its relevant rules, provisions, and clauses have been prepared by subject matter experts possessing the necessary technical and legal knowledge.
• Delay and Compensation:
Pertinent to the Tender and Auction Law No. 89 of the year 1998 (Article 23) the constructor does not get compensated for any delay from the other party but he has the right to plead before the Egyptian Courts, unless parties agree otherwise. Since many changes normally occur to construction contract and that is being the nature of the construction industry where designs might be inaccurate, the budget changed, etc. FIDIC helps to avoid negations with constructor by the rules and regulations which state:
The project owner has the right to amend the contract but with the constructor right for the compensation.
• Dispute Settlement:
The Foreign Constructor may not prefer to settle the disputes through the national Egyptian courts and therefore, FIDIC contracts give the ability to settle the disputes, and for resolving the disputes the parties need to follow these steps:
2. Adjudication board
3. Amicable settlment
In light of the above issues facing Egyptian constructors, it becomes clear that the Tender and Auction Law needs to be developed to be compatible with the international standards.
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