International Construction Law Review
EIC CONTRACTOR’S GUIDE TO THE FIDIC CONDITIONS OF CONTRACT FOR EPC TURNKEY PROJECTS (THE SILVER BOOK)
FRANK M KENNEDY
Carillion Plc and Chairman of the EIC 1 Conditions of Contract Working Group
In October 1997, EIC received from FIDIC the first drafts of the 1999 First Editions of four new standard forms of contract and were invited to comment. EIC gratefully accepted this opportunity and undertook a comprehensive review of all of the new forms and submitted a large number of proposals for amendment, clarification and improvement. A significant number of EIC proposals were incorporated in the Test Editions of 1998 and, following further exchanges, in the First Editions of September 1999. In common with a number of other reviewers of the draft forms, EIC’s objective was to try and ensure that the new documents maintained the same balance and fairness between client and contractor that has been the hallmark of FIDIC contracts. In our view the Silver Book falls a long way short of this objective.
The Silver Book will create problems for employers and contractors and is unlikely to achieve the dispute free projects desired by FIDIC. It sets out to place almost every conceivable risk on the contractor but within a framework of conventional FIDIC contract administration procedures. Such an approach is a long way from good turnkey practice, which gives the contractor a fair degree of freedom to decide how to achieve performance criteria unhindered by bureaucratic processes. Interestingly, it is also contrary to FIDIC’s own recommendation in the Introductory Note to the Silver Book that the “Contractor should be given freedom to carry out the works in his chosen manner”. It is this scope for interference in the design and construction process along with the Employer’s right to unilaterally issue instructions that so troubles contractors rather than any fundamental objection to the principle of risk transfer. Regrettably, examples of turnkey projects falling behind programme whilst the contractor attempts to satisfy the Employer’s engineer’s requests for further information before authority to proceed with construction is permitted, are all too common. What could cause greater disagreement and dispute however is the attempt to make the
1 European International Contractors was founded in 1970 and is a federation of construction industry trade associations from 15 European countries. The value of international business carried out by members amounts to around 30 billion Euro per annum. Copies of the Guide can be obtained from EIC at: European International Contractors, Kurfurstenstrasse 129, D-10785 Berlin, Germany. Tel: ++49 30 21 286 244. Fax: ++49 30 21 286 285. Email: eicontractors@compuserve.com
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EIC Contractor’s Guide to the Fidic Conditions
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