The fundamentals mean allocation of risk in the conditions of contract; criteria for pre-qualification and selection of contractors; approach to project management. We began by looking at what we were doing in these areas and whether we were minimising the risk to completing projects on time and within budget.

Our Conditions of Contract started life in 1975, as a modified form of FIDIC, the changes being principally related to interim payment. We wished to avoid the time consuming and conflict generating monthly measurement and focus the contractor on major project objectives through milestone payments. The balance of risk in FIDIC remained essentially unchanged.

Over the years we have made further evolutionary changes based on the experience of the previous project. For example, by recognising that our railway projects are linear and multi-disciplinary with significant interdependence between civil, electrical and mechanical contracts, we have given the Engineer under the Contract the authority to instruct recovery of employer’s delay at the employer’s expense. This is to reduce the risk that a delayed contract will delay the whole project. We have also introduced mediation into the dispute resolution process as a condition precedent to proceeding to arbitration, to minimise the likelihood of it occurring and the consequent expense.

For major projects, we pre-qualify local and international contractors based on a technical and financial questionnaire and take into account where applicable previous performance with the Corporation. Safety and quality are also taken into consideration.

We limit the number of tenders invited to improve the contractors’ chances of success while maintaining competition. We carry out intensive assessment including interviews, and consideration of contractors’ alternatives. We award to the lowest compliant bidder.

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