Further boost for FIDIC contracts as International Fund for Agricultural Development signs key agreement.
International engineering federation FIDIC (the International Federation of Consulting Engineers) has secured another key agreement with an international funding organisation to use its popular suite of contract documemnts.
The International Fund for Agricultural Development (IFAD) has signed up with FIDIC to adopt the use of six FIDIC standard contracts for the next five years. Under the terms of the agreement, FIDIC has granted IFAD a non-exclusive licence to refer to the six major FIDIC contracts (see list 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 IFAD’s move to use the documents represents a major endorsement for the contracts from an international funding organisation.
FIDIC chief executive Dr Nelson Ogunshakin said: “The signing of this agreement is another significant development for FIDIC and we are delighted that IFAD 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 IFAD is saying that it endorses the fair and balanced approach that these documents offer to parties on major construction contracts. The familiarity that the 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 the parties understand their obligations and responsibilities.
“Endorsement by a UN agency like IFAD should 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.”
Commenting on the signing of the agreement, Priscilla Torres Rossel, IFAD’s lead procurement advisor said: “We are very happy to support our borrowers and recipients with state-of-the-art bidding documents and the FIDIC contracts are an essential part of IFAD’s all-new set of documents. The contract suite offered by FIDIC has been a decade-long de-facto standard among international financial institutions and we are happy to join our partner organisations in creating one front in development by adopting the same contract templates for infrastructure works.”
IFAD is an international financial institution and specialised United Nations agency based in Rome, the UN’s food and agriculture hub. Since 1978, IFAD has provided US$22.4bn in grants and low-interest loans to projects that have reached an estimated 512 million people.
The six FIDIC contract documents covered by the FIDIC/World Bank agreement are listed below.
- 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.