Latest agreement with ADB means FIDIC is now working closely with all the main global multilateral development banks.
International engineering federation FIDIC (the International Federation of Consulting Engineers) has secured a major agreement with the Asian Development Bank (ADB) that will see the international funding organisation adopt the use of six FIDIC standard contracts for the next five years.
Under the terms of the agreement, FIDIC has granted ADB a non-exclusive licence to refer to the six major FIDIC contracts (see list in notes below) for projects they finance and the documents will be used as part of the fund’s standard bidding documents. The contracts mainly include the 2017 Second edition FIDIC contracts, which cover a wide range of international construction and infrastructure work, and ADB’s move to use the documents is a significant endorsement for the contracts from a key international funding organisation.
FIDIC chief executive Dr Nelson Ogunshakin said: “The signing of this agreement represents another major development for FIDIC in our relationships with international funding organisations. We are delighted that ADB has agreed to adopt our 2017 editions of the rainbow suite of contracts and use them as a key part of their standard bidding documents. This will create more certainty in the market as by adopting the FIDIC contacts on its projects ADB is saying that it endorses the fair and balanced approach that these documents offer to parties on major construction contracts. The familiarity that FIDIC contracts bring make it easier to get projects underway as many of the typical commercial risks are clearly addressed in the contracts and all parties understand their obligations and responsibilities.
“Endorsement by a key funding organisation like ADB should also provide additional comfort to the financial, institutional and private equity investors operating in the global market to adopt the use of FIDIC standard procurement contracts as an effective tool to mitigate the risks associated with construction and infrastructure projects.”
The latest decision by the ADB to adopt the use of six FIDIC standard contracts for the next five years means that FIDIC has now signed similar agreements with all the main global multilateral development banks, a significant achievement for the organisation and the international engineering, construction and infrastructure industry.
The six FIDIC contract documents covered by the FIDIC/ADB agreement are as follows: –
- Conditions of Contract for Construction for Building and Engineering Works Designed by the Employer (“Red book”), Second edition 2017;
- Conditions of Contract for Plant & Design-Build for Electrical & Mechanical Plant & for Building & Engineering Works Designed by the Contractor (“Yellow book”), Second edition 2017;
- Conditions of Contract for EPC Turnkey Projects (Silver book), Second Edition, 2017);
- Client/Consultant Model Services Agreement (”White book”), Fifth Edition 2017;
- Conditions of Contract for Design, Build and Operate Projects (“Gold book”) First Edition 2008; and
- The Short Form of Contract (“Green book”), First Edition 1999.