Appendix C Having used FIDIC 99 as the basis for identifying the modifications made within the analyzed contracts, it was necessary to understand the

Transcription

1 Appendix C Having used FIDIC 99 as the basis for identifying the modifications made within the analyzed contracts, it was necessary to understand the differences between FIDIC 87 and FIDIC 99. The below comparison provides an overview on what additions and enhancements were made to FIDIC 87 reaching the form of FIDIC 99. This also shows the advantages of using FIDIC 99 as the form of general conditions over FIDIC 87, noting that the below comparison solely addresses the top 30 clauses identified through the analysis. Similar statements between FIDIC 87 and 99 are not copied in the below comparisons, but merely the ones which show the differences. Points noted between FIDIC 87 and FIDIC 99: 1- Performance Security FIDIC 87 Statement(s) FIDIC 99 Statement(s) Comparison / Comments Sub-Clause 4.2: If the terms of the Performance Security specify its expiry date, and the Contractor has not become entitled to receive the Performance Certificate by the date 28 days prior to the expiry date, the Contractor shall extend the validity of the Performance Security until the Works have been completed and any defects have been remedied. Sub-Clause 10.3: Prior to making a claim under the performance security the Employer shall, in every case, notify the Contractor stating the nature of the default in respect of which the claim is to be made. Sub-Clause 4.2: The Employer shall not make a claim under the Performance Security, except for amounts to which the Employer is entitled under the Contract in the event of: (a) failure by the Contractor to extend the FIDIC 99 has added a provision addressing the case when an expiry date is specified within the Performance Security, while FIDIC 87 is silent regarding this point. However, it is generally stated through both FIDIC editions that the Performance Security shall be valid until the completion of the Works and remedial of defects therein. FIDIC 87 has only required the Employer to notify the Contractor whenever a claim under the Performance Security shall be made while FIDIC 99 has detailed the cases that entitled the Employer to make a claim under the Performance Security. Furthermore, FIDIC 99

2 Sub-Clause 10.2: The performance security shall be valid until the Contractor (b) (c) validity of the Performance Security as described in the preceding paragraph, in which event the Employer may claim the full amount of the Performance Security, failure by the Contractor to pay the Employer an amount due, as either agreed by the Contractor or determined under Sub-Clause 2.5 [Employer s Claims] or Clause 20 [Claims, Disputes and Arbitration], within 42 days after this agreement or determination, failure by the Contractor to remedy a default within 42 days after receiving the Employer s notice requiring the default to be remedied, or (d) circumstances which entitle the Employer to termination under Sub- Clause 15.2 [Termination by Employer], irrespective of whether notice of termination has been given. The Employer shall indemnify and hold the Contractor harmless against and from all damages, losses and expenses (including legal fees and expenses) resulting from a claim under the Performance Security to the extent to which the Employer was not entitled to make the claim. Sub-Clause 4.2: the Performance Security is valid and enforceable until the Contractor has indemnified the Contractor harmless against any claims in relation to the Performance Security to the extent to which the Employer is not entitled to make the claim. Various minor differences were identified between both editions of the FIDIC, such as this example.

3 2- Programme of Works / Revised Programme Points noted between FIDIC 87 and FIDIC 99: FIDIC 87 Statement(s) FIDIC 99 Statement(s) Comparison / Comments Sub-Clause 14.1: The Contractor shall, within the time stated in Part II of these Conditions after the date of the Letter of Acceptance, submit to the Engineer for his consent a programme Sub-Clause 8.3: The Contractor shall submit a detailed time programme to the Engineer within 28 days after receiving the notice under Sub-Clause 8.1 [Commencement of Works]. Sub-Clause 14.1: in such form and detail as the Engineer shall reasonably prescribe, for the execution of the Works. The Contractor shall, whenever required by the Engineer, also provide in writing for his information a general description of the arrangements and methods which the Contractor proposes to adopt for the execution of the Works. Sub-Clause 8.3: Each programme shall include: (a) the order in which the Contractor intends to carry out the Works, including the anticipated timing of each stage of design (if any), Contractor s Documents, procurement, manufacture of Plant, delivery to Site, construction, erection and testing, (b) each of these stages for work by each nominated Subcontractor (as defined in Clause 5 [Nominated Subcontractors]), (c) the sequence and timing of inspections and tests specified in the Contract, and (d) a supporting report which includes: (i) a general description of the methods which the Contractor intends to adopt, and of the major stages, in the execution of the Works, and (ii) details showing the Contractor s reasonable estimate of the number of each class of Contractor s Personnel and of FIDIC 99 has specified a duration of 28 days while FIDIC 87 has referred to Part II of these Conditions. FIDIC 87 has not specified certain requirements for the programme, but has left such requirements up to the Engineer s reasonable prescription. FIDIC 99, on the other hand, has stated specific requirements for the programme.

4 Sub-Clause 14.2: If at any time it should appear to the Engineer that the actual progress of the Works does not conform to the programme to which consent has been given under Sub-Clause 14.1, the Contractor shall produce, at the request of the Engineer, a revised programme showing the modifications to such programme necessary to ensure completion of the Works within the Time for Completion. each type of Contractor s Equipment, required on the Site for each major stage. Sub-Clause 8.3: The Contractor shall also submit a revised programme whenever the previous programme is inconsistent with actual progress or with the Contractor s obligations. If, at any time, the Engineer gives notice to the Contractor that a programme fails (to the extent stated) to comply with the Contract or to be consistent with actual progress and the Contractor s stated intentions, the Contractor shall submit a revised programme to the Engineer in accordance with this Sub-Clause. Sub-Clause 8.3: Unless the Engineer, within 21 days after receiving a programme, gives notice to the Contractor stating the extent to which it does not comply with the Contract, the Contractor shall proceed in accordance with the programme, subject to his other obligations under the Contract. The Employer s Personnel FIDIC 87 has made the requirement of producing a revised programme up to when it appears to the Engineer that the actual progress of the Works does not conform the programme to which consent has been given under Sub- Clause Such a programme is required to show the modifications between both programmes that would allow ensuring completion of the Works within the Time for Completion. FIDIC 99 has obliged the Contractor to submit a revised programme whenever the previous one is inconsistent with the actual progress or with the Contractor s obligations, with no consideration as to what may appear to the Engineer regarding the progress of the Works, as well as whenever requested by the Engineer through a relevant notice. The requirements that are to be considered are the same as mentioned in the previous point. FIDIC 87 is silent regarding this point.

5 shall be entitled to rely upon the programme when planning their activities. Sub-Clause 8.3: The Contractor shall promptly give notice to the Engineer of specific probable future events or circumstances which may adversely affect the work, increase the Contract Price or delay the execution of the Works. The Engineer may require the Contractor to submit an estimate of the anticipated effect of the future event or circumstances, and/or a proposal under Sub- Clause 13.3 [Variation Procedure]. FIDIC 87 is silent regarding this point.

6 3- Contract Price / Customs / Taxes Points noted between FIDIC 87 and FIDIC 99: FIDIC 87 Statement(s) FIDIC 99 Statement(s) Comparison / Comments Sub-Clause 1.1 (e) (i) Contract Price means the sum stated in the Letter of Acceptance as payable to the Contractor for the execution and completion of the Works and the remedying of any defects therein in accordance with the provisions of the Contract. Sub-Clause : Contract Price means the price defined in Sub-Clause 14.1 [The Contract Price], and includes adjustments in accordance with the Contract. FIDIC 87 has briefly referred to Contract Price as the sum required for the execution and completion of the Works, while FIDIC 99 has detailed a definition of Contract Price through Sub-Clause The said Sub-Clause 14.1 has specified the inclusion of taxes, duties and fees related to the Contract within the Contract Price, as well as other detailed information. Sub-Clause 26.1: The Contractor shall conform in all respects, including by the giving of all notices and the paying of all fees, with the provisions of: (a) any National or State Statute, Ordinance, or other Law, or any regulation, or bye-law of any local or other duly constituted authority in relation to the execution and completion of the Works and the remedying of any defects therein, and (b) the rules and regulations of all public bodies and companies whose property or rights are affected or may be affected in any way by the Works, and the Contractor shall keep the Sub-Clause 1.13: The Contractor shall, in performing the Contract, comply with applicable Laws. Unless otherwise stated in the Particular Conditions: (a) the Employer shall have obtained (or shall obtain) the planning, zoning or similar permission for the Permanent Works, and any other permissions described in the Specification as having been (or being) obtained by the Employer; and the Employer shall indemnify and hold the Contractor FIDIC 87 and 99 have mainly included similar provisions with regards to compliance with laws, statutes and regulations.

7 Employer indemnified against all penalties and liability of every kind for breach of any such provisions. Provided always that the Employer shall be responsible for obtaining any planning, zoning or other similar permission required for the Works to proceed and shall indemnify the Contractor in accordance with Sub-Clause (b) harmless against and from the consequences of any failure to do so; and the Contractor shall give all notices, pay all taxes, duties and fees, and obtain all permits, licences and approvals, as required by the Laws in relation to the execution and completion of the Works and the remedying of any defects; and the Contractor shall indemnify and hold the Employer harmless against and from the consequences of any failure to do so. Sub-Clause 54.3: The Employer will use his best endeavours in assisting the Contractor, where required, in obtaining clearance through the Customs of Contractor's Equipment, materials and other things required for the Works. Sub-Clause 9.1: The Contractor shall, if called upon so to do, enter into and execute the Contract Agreement, Sub-Clause 2.2: The Employer shall (where he is in a position to do so) provide reasonable assistance to the Contractor at the request of the Contractor: (a) by obtaining copies of the Laws of the Country which are relevant to the Contract but are not readily available, and (b) for the Contractor s applications for any permits, licences or approvals required by the Laws of the Country: (i)which the Contractor is required to obtain under Sub-Clause 1.13 [Compliance with Laws], (ii)for the delivery of Goods, including clearance through customs, and (iii)for the export of Contractor s Equipment when it is removed from the Site. Sub-Clause 1.6: The Parties shall enter into a Contract Agreement within 28 days after the Contractor FIDIC 87 and 99 are similar with regards to having the Employer assisting the Contractor with obtaining certain clearances to his best endeavours or through the provision of reasonable assistance. FIDIC 99 included more requirements. FIDIC 87 and 99 are mainly similar with regards to the responsibility of paying costs (if

8 to be prepared and completed at the cost of the Employer, in the form annexed to these Conditions with such modification as may be necessary. receives the Letter of Acceptance, unless they agree otherwise. The Contract Agreement shall be based upon the form annexed to the Particular Conditions. The costs of stamp duties and similar charges (if any) imposed by law in connection with entry into the Contract Agreement shall be borne by the Employer. any) related to entering into the Contract Agreement, with minor wording differences.

9 4- Language and Law Points noted between FIDIC 87 and FIDIC 99: FIDIC 87 Statement(s) FIDIC 99 Statement(s) Comparison / Comments Sub-Clause 1.4: The language for communications shall be that stated in the Appendix to Tender. If no language is stated there, the language for communications shall be the language in which the Contract (or most of it) is written FIDIC 99 has added a provision addressing the language of communication, while FIDIC 87 is silent in this regard. No other considerable differences were identified between FIDIC 87 and FIDIC 99.

10 5- Priority of Contract Documents Points noted between FIDIC 87 and FIDIC 99: FIDIC 87 Statement(s) FIDIC 99 Statement(s) Comparison / Comments Sub-Clause 5.2: (1) The Contract Agreement (if completed); (2) The Letter of Acceptance; (3) The Tender; (4) Part II of these Conditions; (5) Part I of these Conditions; and (6) Any other document forming part of the Contract. Sub-Clause 1.5: (a) the Contract Agreement (if any), (b) the Letter of Acceptance, (c) the Letter of Tender, (d) the Particular Conditions, (e) these General Conditions, (f) the Specification, (g) the Drawings, and (h) the Schedules and any other documents forming part of the Contract. FIDIC 99 has addressed some more documents forming part of the Contract (i.e. Specification, Drawings and Schedules), and prioritized them. No other considerable differences were identified between FIDIC 87 and FIDIC 99.

11 6- Health, Safety and Environment Points noted between FIDIC 87 and FIDIC 99: FIDIC 87 Statement(s) FIDIC 99 Statement(s) Comparison / Comments Sub-Clause 19.1: The Contractor shall, throughout the execution Sub-Clause 4.8: The Contractor shall: FIDIC 99 has mainly covered the provisions included within FIDIC 87 with the exception and completion of the Works and the (a) comply with all applicable safety of minor differences. FIDIC 99 has required remedying of any defects therein: (a) have full regard for the safety of all persons entitled to be upon the Site and keep the Site (so far as the same is under his control) and the Works (so far as the same are not completed or occupied by the Employer) in an orderly state appropriate to the avoidance of danger to such persons, (b) provide and maintain at his own cost all lights, guards, fencing, warning signs and watching, when and where necessary or required by the Engineer or by any duly constituted authority, for the protection of the Works or for the safety and convenience of the public or others, and (c) take all reasonable steps to protect the environment on and off the Site and to avoid damage or nuisance to persons or to property of the public or others resulting from pollution, noise or other causes arising as a consequence of his methods of operation. regulations, (b) take care for the safety of all persons entitled to be on the Site, (c) use reasonable efforts to keep the Site and Works clear of unnecessary obstruction so as to avoid danger to these persons, (d) provide fencing, lighting, guarding and watching of the Works until completion and taking over under Clause 10 [Employer s Taking Over], and (e) provide any Temporary Works (including roadways, footways, guards and fences) which may be necessary, because of the execution of the Works, for the use and protection of the public and of owners and occupiers of adjacent land. The Contractor shall take all reasonable steps to protect the environment (both on and off the Site) and to limit damage and nuisance to people and property resulting from pollution, noise and other results of his operations. the Contractor to provide fencing, lighting, guarding and watching of the Works, while FIDIC 87 has required him to provide similar items when and where necessary or required by the Engineer or by any duly constituted authority, for the protection of the Works or for the safety and convenience of the public... FIDIC 99 has added the provision of Temporary Works, as necessary, for the use and protection of the public and of owners FIDIC 99 has added various more provision, as shown below.

12 Sub-Clause 4.18: The Contractor shall ensure that emissions, surface discharges and effluent from the Contractor s activities shall not exceed the values indicated in the Specification, and shall not exceed the values prescribed by applicable Laws. Unless otherwise stated in the Particular Conditions: (a) the Contractor shall be responsible for keeping unauthorised persons off the Site, and (b) authorised persons shall be limited to the Contractor s Personnel and the Employer s Personnel; and to any other personnel notified to the Contractor, by the Employer or the Engineer, as authorised personnel of the Employer s other contractors on the Site. Sub-Clause 6.7: The Contractor shall at all times take all reasonable precautions to maintain the health and safety of the Contractor s Personnel. In collaboration with local health authorities, the Contractor shall ensure that medical staff, first aid facilities, sick bay and ambulance service are available at all times at the Site and at any accommodation for Contractor s and Employer s Personnel, and that suitable arrangements are made for all necessary welfare and hygiene requirements and for the prevention of epidemics. The Contractor shall appoint an accident FIDIC 99 has specified a limit for emission, surface discharges and effluent while FIDIC 87 is silent in this regard. FIDIC 99 has addressed the authorization of persons allowed to stay onsite, while FIDIC 87 is silent in this regard. FIDIC 99 has addressed and detailed Health and Safety Measures that are required onsite while FIDIC 87 is silent in this regard.

13 prevention officer at the Site, responsible for maintaining safety and protection against accidents. This person shall be qualified for this responsibility, and shall have the authority to issue instructions and take protective measures to prevent accidents. Throughout the execution of the Works, the Contractor shall provide whatever is required by this person to exercise this responsibility and authority. The Contractor shall send, to the Engineer, details of any accident as soon as practicable after its occurrence. The Contractor shall maintain records and make reports concerning health, safety and welfare of persons, and damage to property, as the Engineer may reasonably require.

14 7- Variations Points noted between FIDIC 87 and FIDIC 99: FIDIC 87 Statement(s) FIDIC 99 Statement(s) Comparison / Comments Sub-Clause 13.1: Variations may be initiated by the Engineer at any time prior to issuing the Taking-Over Certificate for the Works, either by an instruction or by a request for the Contractor to submit a proposal. Sub-Clause 51.1: (a) increase or decrease the quantity of any work included in the Contract, (b) omit any such work (but not if the omitted work is to be carried out by the Employer or by another contractor), (c) change the character or quality or kind of any such work, (d) change the levels, lines, position and dimensions of any part of the Works, (e) execute additional work of any kind necessary for the completion of the Works, or (f) change any specified sequence or timing of construction of any part of the Works. Sub-Clause 13.1: The Contractor shall execute and be bound by each Variation, unless the Contractor promptly gives notice to the Engineer stating (with supporting particulars) that the Contractor cannot readily obtain the Goods required for the Variation. Sub-Clause 13.1: (a) changes to the quantities of any item of work included in the Contract (however, such changes do not necessarily constitute a Variation), (b) changes to the quality and other characteristics of any item of work, (c) changes to the levels, positions and/or dimensions of any part of the Works, (d) omission of any work unless it is to be carried out by others, (e) any additional work, Plant, Materials or services necessary for the Permanent Works, including any associated Tests on Completion, boreholes and other testing and exploratory FIDIC 99 has specified the time by which variations may be initiated, while FIDIC 87 is silent in this regard. FIDIC 99 has bounded the Contractor by each variation and provided him a room for objecting against following variations whenever he is unable to obtain related Goods. Minor differences were identified between FIDIC 87 and FIDIC 99 with regards to this point.

15 Sub-Clause 51.1: No such variation shall in any way vitiate or invalidate the Contract, but the effect, if any, of all such variations shall be valued in accordance with Clause 52. Provided that where the issue of an instruction to vary the Works is necessitated by some default of or breach of contract by the Contractor or for which he is responsible, any additional cost attributable to such default shall be borne by the Contractor. Sub-Clause 51.2: Provided that no instruction shall be required for increase or decrease in the quantity of any work where such increase or decrease is not the result of an instruction given under this Clause, but is the result of the quantities exceeding or being less than those stated in the Bill of Quantities. work, or (f) changes to the sequence or timing of the execution of the Works. Sub-Clause 13.1: (a) changes to the quantities of any item of work included in the Contract (however, such changes do not necessarily constitute a Variation), Sub-Clause 13.3: If the Engineer requests a proposal, prior to instructing a Variation, the Contractor shall respond in writing as soon as practicable, either by giving reasons why he cannot comply (if this is the case) or by submitting: (a) a description of the proposed work to be performed and a programme for its execution, (b) the Contractor s proposal for any FIDIC 87 has addressed the effect of variations on the Contract, and deemed the Contractor responsible for any costs arising due to a variation necessitated due to his default. FIDIC 99 is silent in this regard. Both forms have addressed the increase or decrease of quantities; however, FIDIC 87 has stated such changes shall not be deemed as variations unless they are instructed under the relevant Sub-Clause, while FIDIC 99 has generally stated that such changes may not necessarily constitute a variation. FIDIC 99 has allowed for requesting proposals, prior to instructing variations, by the Engineer, and provided the relevant procedures to be followed. FIDIC 87 is silent in this regard.

16 Sub-Clause 52.1: All variations referred to in Clause 51 and any additions to the Contract Price which are required to be determined in accordance with Clause 52 (for the purposes of this Clause referred to as varied work ), shall be valued at the rates and prices set out in the Contract if, in the opinion of the Engineer, the same shall be applicable. If the Contract does not contain necessary modifications to the programme according to Sub-Clause 8.3 [Programme] and to the Time for Completion, and (c) the Contractor s proposal for evaluation of the Variation. The Engineer shall, as soon as practicable after receiving such proposal (under Sub-Clause 13.2 [Value Engineering] or otherwise), respond with approval, disapproval or comments. The Contractor shall not delay any work whilst awaiting a response. Each instruction to execute a Variation, with any requirements for the recording of Costs, shall be issued by the Engineer to the Contractor, who shall acknowledge receipt. Each Variation shall be evaluated in accordance with Clause 12 [Measurement and Evaluation], unless the Engineer instructs or approves otherwise in accordance with this Clause. Sub-Clause 12.3: Except as otherwise stated in the Contract, the Engineer shall proceed in accordance with Sub-Clause 3.5 [Determinations] to agree or determine the Contract Price by evaluating each item of work, applying the measurement agreed or determined in accordance with the above Sub-Clauses 12.1 and 12.2 and the appropriate rate or price for the item. Both forms have specified the use of the applicable rates and prices set in the Contractor for the evaluation purposes. Whenever there are no applicable rates and prices, FIDIC 87 has specified that rates and prices in the Contract shall be used as the basis for valuation, while FIDIC 99 has specified the use of those specified for similar work. FIDIC 99 has provided certain conditions for the

17 any rates or prices applicable to the varied work, the rates and prices in the Contract shall be used as the basis for valuation so far as may be reasonable, failing which, after due consultation by the Engineer with the Employer and the Contractor, suitable rates or prices shall be agreed upon between the Engineer and the Contractor. In the event of disagreement the Engineer shall fix such rates or prices as are, in his opinion, appropriate and shall notify the Contractor accordingly, with a copy to the Employer. Until such time as rates or prices are agreed or fixed, the Engineer shall determine provisional rates or prices to enable on-account payments to be included in certificates issued in accordance with Clause 60. For each item of work, the appropriate rate or price for the item shall be the rate or price specified for such item in the Contract or, if there is no such item, specified for similar work. However, a new rate or price shall be appropriate for an item of work if: (a) (i) the measured quantity of the item is changed by more than 10% from the quantity of this item in the Bill of Quantities or other Schedule (ii) this change in quantity multiplied by such specified rate for this item exceeds 0.01% of the Accepted Contract Amount, (iii) this change in quantity directly changes the Cost per unit quantity of this item by more than 1%, and (iv) this item is not specified in the Contract as a fixed rate item ; Or (b) (i) the work is instructed under Clause 13 [Variations and Adjustments], (ii) no rate or price is specified in the Contract for this item, and (iii) no specified rate or price is appropriate because the item of work is not of similar character, or is not executed under similar conditions, as any item in the Contract. Each new rate or price shall be derived from any relevant rates or prices in the Contract, with reasonable adjustments to take account of appropriateness of a new rate or price for an item of work, while FIDIC 87 has left such a matter open to the agreement between the Engineer and the Contractor. Both forms have allowed for determining a certain rate or price by the Engineer to be used for interim payments until such an agreement is reached.

18 the matters described in sub-paragraph (a) and/or (b), as applicable. If no rates or prices are relevant for the derivation of a new rate or price, it shall be derived from the reasonable Cost of executing the work, together with reasonable profit, taking account of any other relevant matters. Until such time as an appropriate rate or price is agreed or determined, the Engineer shall determine a provisional rate or price for the purposes of Interim Payment Certificates.

19 8- Payment Points noted between FIDIC 87 and FIDIC 99: FIDIC 87 Statement(s) FIDIC 99 Statement(s) Comparison / Comments Sub-Clause 60.2: Provided that the Engineer shall not be bound to certify any payment under this Sub-Clause if the net amount thereof, after all retentions and deductions, would be less than the Minimum Amount of Interim Payment Certificates stated in the Appendix to Tender. Sub-Clause 14.6: However, prior to issuing the Taking-Over Certificate for the Works, the Engineer shall not be bound to issue an Interim Payment Certificate in an amount which would (after retention and other deductions) be less than the minimum amount of Interim Payment Certificates (if any) stated in the Appendix to Tender. In this event, the Engineer shall give notice to the Contractor accordingly. Sub-Clause 14.6: An Interim Payment Certificate shall not be withheld for any other reason, although: (a) (b) if any thing supplied or work done by the Contractor is not in accordance with the Contract, the cost of rectification or replacement may be withheld until rectification or replacement has been completed; and/or if the Contractor was or is failing to perform any work or obligation in accordance with the Contract, and had been so notified by the Engineer, the value of this work or obligation may be withheld until the work or obligation has been performed. Sub-Clause 60.4: Sub-Clause 14.6: The Engineer may in any Payment Certificate No considerable differences were identified between FIDIC 87 and 99 with regards to Minimum amount of Interim payment Certificates other than that FIDIC 99 has required the Engineer to notify the Contractor accordingly. FIDIC 99 has stated the cases which may lead to withholding the Interim Payment Certificates, while FIDIC 87 is silent in this regard. Minor differences in wording have been identified between FIDIC 87 and 99 with

20 The Engineer may by any Interim Payment Certificate make any correction or modification in any previous Interim Payment Certificate which shall have been issued by him and shall have authority, if any work is not being carried out to his satisfaction, to omit or reduce the value of such work in any Interim Payment Certificate. Sub-Clause 60.10: The amount due to the Contractor under any Interim Payment Certificate issued by the Engineer pursuant to this Clause, or to any other term of the Contract, shall, subject to Clause 47, be paid by the Employer to the Contractor within 28 days after such Interim Payment Certificate has been delivered to the Employer Sub-Clause 60.10: In the event of the failure of the Employer to make payment within the times stated, the Employer shall pay to the Contractor interest make any correction or modification that should properly be made to any previous Payment Certificate. A Payment Certificate shall not be deemed to indicate the Engineer s acceptance, approval, consent or satisfaction. Sub-Clause 14.7: The Employer shall pay to the Contractor: (a) the first instalment of the advance payment within 42 days after issuing the Letter of Acceptance or within 21 days after receiving the documents in accordance with Sub-Clause 4.2 [Performance Security] and Sub-Clause 14.2 [Advance Payment], whichever is later; Sub-Clause 14.7: The Employer shall pay to the Contractor: (b) the amount certified in each Interim Payment Certificate within 56 days after the Engineer receives the Statement and supporting documents; and Sub-Clause 14.8: If the Contractor does not receive payment in accordance with Sub-Clause 14.7 [Payment], the Contractor shall be entitled to receive regards to correction of certificates. FIDIC 87 has elaborated on the reason that would allow the Engineer to correct any payment certificate, as opposed to FIDIC 99, which was brief in this regard. FIDIC 99 has added that payment certificates are not deemed to indicate the Engineer s acceptance, approval, consent or satisfaction. FIDIC 99 has added a provision related to the payment of the Advance Payment, while FIDIC 87 does not include provisions related to Advance Payment. FIDIC 87 has required the Employer to pay the Contractor within 28 days after the time by which the Interim Payment Certificate has been delivered to the Employer, while FIDIC 99 has required such payment to be made within 56 days after the Engineer received the statement and supporting documents. FIDIC 87 has required the Employer to pay an interest at the rate stated in the Appendix to Tender in case it failed to make the Contractor s payment within the specified

21 at the rate stated in the Appendix to Tender upon all sums unpaid from the date by which the same should have been paid. financing charges compounded monthly on the amount unpaid during the period of delay Unless otherwise stated in the Particular Conditions, these financing charges shall be calculated at the annual rate of three percentage points above the discount rate of the central bank in the country of the currency of payment, and shall be paid in such currency. The Contractor shall be entitled to this payment without formal notice or certification, and without prejudice to any other right or remedy. times. FIDIC 99 has entitled the Contractor to receive financing charges for the same, for which criterion of calculation was provided.

22 9- Insurance Points noted between FIDIC 87 and FIDIC 99: FIDIC 87 Statement(s) FIDIC 99 Statement(s) Comparison / Comments Sub-Clause 21.1: The Contractor shall, without limiting his or the Employer s obligations and responsibilities under Clause 20, insure: Sub-Clause 18.1: In this Clause, insuring Party means, for each type of insurance, the Party responsible for effecting and maintaining the insurance specified in the relevant Sub-Clause. Wherever the Contractor is the insuring Party, each insurance shall be effected with insurers and in terms approved by the Employer. These terms shall be FIDIC 87 has deemed the Contractor as the party that shall make the insurances as required by the Contract, while FIDIC 99 has added the possibility that the Employer might become the insuring party, and has set different requirements based on each possibility. Sub-Clause 25.1: The Contractor shall provide evidence to the Employer prior to the start of work at the Site that the insurances required under the Contract have been effected and shall, within 84 days of the Commencement Date, provide the insurance policies to the Employer. When providing such evidence and such policies to the Employer, the Contractor shall notify the Engineer of so doing. Such insurance policies shall be consistent with the general terms agreed prior to the issue of the Letter of Acceptance. The Contractor shall effect all Wherever the Employer is the insuring Party, each insurance shall be effected with insurers and in terms consistent with the details annexed to the Particular Conditions. Sub-Clause 18.1: The relevant insuring Party shall, within the respective periods stated in the Appendix to Tender (calculated from the Commencement Date), submit to the other Party: (a) evidence that the insurances described in this Clause have been effected, and (b) copies of the policies for the insurances described in Sub-Clause 18.2 [Insurance for Works and Contractor s Equipment] and Sub-Clause 18.3 [Insurance against Injury to Persons and Damage to Property]. FIDIC 87 has detailed the requirements for submitting certain insurance evidences and polices, while FIDIC 99 has briefed these requirements through references to the Appendix to Tender and other Sub-Clause of the Contract. Minor differences were identified between the two forms in relation with this provision.

23 insurances for which he is responsible with insurers and in terms approved by the Employer. Sub-Clause 25.2: The Contractor shall notify the insurers of changes in the nature, extent or programme for the execution of the Works and ensure the adequacy of the insurances at all times in accordance with the terms of the Contract and shall, when required, produce to the Employer the insurance policies in force and the receipts for payment of the current premiums. Sub-Clause 21.3: Any amounts not insured or not recovered from the insurers shall be borne by the Employer or the Contractor in accordance with their responsibilities under Clause 20. Sub-Clause 18.1: When each premium is paid, the insuring Party shall submit evidence of payment to the other Party. Whenever evidence or policies are submitted, the insuring Party shall also give notice to the Engineer. Each Party shall comply with the conditions stipulated in each of the insurance policies. The insuring Party shall keep the insurers informed of any relevant changes to the execution of the Works and ensure that insurance is maintained in accordance with this Clause. Sub-Clause 18.1: Neither Party shall make any material alteration to the terms of any insurance without the prior approval of the other Party. If an insurer makes (or attempts to make) any alteration, the Party first notified by the insurer shall promptly give notice to the other Party. Sub-Clause 18.1: Nothing in this Clause limits the obligations, liabilities or responsibilities of the Contractor or the Employer, under the other terms of the Contract or otherwise. Any amounts not insured or not recovered from the insurers shall be borne by the Contractor and/or the Employer in accordance with these obligations, liabilities or responsibilities. Minor differences were identified between the two forms with regards to this provision, such as requiring the insuring Party to notify the Engineer whenever evidences or policies are submitted through FIDIC 99, while FIDIC 87 is silent in this regard. Moreover, FIDIC 99 has required the insuring Party to submit evidence of payment to the other Party, while FIDIC 87 has not introduced this as an obligation to be fulfilled in all circumstances, but only when required by the Employer. FIDIC 99 has required the insuring Party to notify the other whenever any changes to the terms of any insurance may take place, without approval the approval of the other, while FIDIC 87 is silent in this regard. FIDIC 87 has referred to Clause 20 for which provision shall apply in relation to any amounts not insured or not recovered from the insurers. The said Clause has detailed the liabilities and obligations of the Contractor and the Employer in relation to the Care of Works and Responsibility to Rectify Loss or Damage. FIDIC 99 has required the insuring Party to pay for the amounts that should have

24 Sub-Clause 25.3: If the Contractor fails to effect and keep in force any of the insurances required under the Contract, or fails to provide the policies to the Employer within the period required by Sub- Clause 25.1, then and in any such case the Employer may effect and keep in force any such insurances and pay any premium as may be necessary for that purpose and from time to time deduct the amount so paid from any monies due or to become due to the Contractor, or recover the same as a debt due from the Contractor. Sub-Clause 21.1: The Contractor shall, without limiting his or the Employer s obligations and responsibilities under Clause 20, insure: However, if the insuring Party fails to effect and keep in force an insurance which is available and which it is required to effect and maintain under the Contract, and the other Party neither approves the omission nor effects insurance for the coverage relevant to this default, any moneys which should have been recoverable under this insurance shall be paid by the insuring Party. Sub-Clause 18.1: If the insuring Party fails to effect and keep in force any of the insurances it is required to effect and maintain under the Contract, or fails to provide satisfactory evidence and copies of policies in accordance with this Sub-Clause, the other Party may (at its option and without prejudice to any other right or remedy) effect insurance for the relevant coverage and pay the premiums due. The insuring Party shall pay the amount of these premiums to the other Party, and the Contract Price shall be adjusted accordingly. Sub-Clause 18.2: The insuring Party shall insure the Contractor s Equipment for not less than the full replacement value, including delivery to Site. For each item of Contractor s Equipment, been recoverable under the insurance with regards to the same. Various differences were identified between the two FIDIC forms with regards to failure to effect and keep in force insurances. FIDIC 87 has unified the consequences of the said failure with the provision of the policies to Employer within specified time frame while FIDIC 99 has unified the same with the failure to provide satisfactory evidence and copies of policies. FIDIC 87 has specified that such a failure shall allow the Employer to effect and keep in force any such insurances and pay the premium, for which value would be deducted from the Contractor through certain ways of deduction. FIDIC 99 has allowed the other party to effect insurance for the relevant coverage and pay the premiums due, and required the insuring Party to pay the amounts resulting from this failure without further details. FIDIC 87 has required the insurance related to the Contractor s Equipment to be for a sum sufficient to provide for their replacement at the Site, while FIDIC 99 has required the same to be for not less than the full replacement

25 (c) the Contractor s Equipment and other things brought onto the Site by the Contractor, for a sum sufficient to provide for their replacement at the Site. Sub-Clause 21.4: There shall be no obligation for the insurances in Sub-Clause 21.1 to include loss or damage caused by: (a) war, hostilities (whether war be declared or not), invasion, act of foreign enemies, (b) rebellion, revolution, insurrection, or military or usurped power, or civil war, (c) ionising radiations, or contamination by radio-activity from any nuclear fuel, or from any nuclear waste from the combustion of nuclear fuel, radio-active toxic explosive or other hazardous properties of any explosive nuclear assembly or nuclear component thereof, or (d) pressure waves caused by aircraft or other aerial devices travelling at sonic or supersonic speeds. the insurance shall be effective while it is being transported to the Site and until it is no longer required as Contractor s Equipment. Sub-Clause 18.2: Unless otherwise stated in the Particular Conditions, insurances under this Sub-Clause: (d) shall also cover loss or damage to a part of the Works which is attributable to the use or occupation by the Employer of another part of the Works, and loss or damage from the risks listed in sub-paragraphs (c), (g) and (h) of Sub- Clause 17.3 [Employer s Risks], excluding (in each case) risks which are not insurable at commercially reasonable terms, with deductibles per occurrence of not more than the amount stated in the Appendix to Tender (if an amount is not so stated, this subparagraph (d) shall not apply), Unless otherwise stated in the Particular Conditions, insurances under this Sub-Clause: (e) may however exclude loss of, damage to, and reinstatement of: (i) a part of the Works which is in a defective condition due to a defect in its design, materials or workmanship (but cover shall include any other parts which are lost or damaged as a direct result of this defective condition and not as value including delivery to Site. FIDIC 99 has required that such insurance shall be effective while it is being transported to the Site and until it is no longer required as Contractor s equipment, while FIDIC 87 is silent in this regard. Various differences were noted in the exclusions related to insurances between the two forms of FIDIC as herein shown through the contents of the compared Sub-Clauses.

26 described in sub-paragraph (ii) below), (ii) a part of the Works which is lost or damaged in order to reinstate any other part of the Works if this other part is in a defective condition due to a defect in its design, materials or workmanship, (iii) a part of the Works which has been taken over by the Employer, except to the extent that the Contractor is liable for the loss or damage, and (iv) Goods while they are not in the Country, subject to Sub-Clause 14.5 [Plant and Materials intended for the Works]. Sub-Clause 18.2: If, more than one year after the Base Date, the cover described in sub-paragraph (d) above ceases to be available at commercially reasonable terms, the Contractor shall (as insuring Party) give notice to the Employer, with supporting particulars. The Employer shall then (i) be entitled subject to Sub-Clause 2.5 [Employer s Claims] to payment of an amount equivalent to such commercially reasonable terms as the Contractor should have expected to have paid for such cover, and (ii) be deemed, unless he obtains the cover at commercially reasonable terms, to have approved the omission under Sub-Clause 18.1 [General Requirements for Insurances]. Sub-Clause 21.1: Sub-Clause 18.2: The insuring Party shall insure the Works, FIDIC 99 has specified the consequences that shall take place should a described cover related to certain risks ceases to be available at commercially reasonable terms, while FIDIC 87 is silent in this regard. FIDIC 87 has required the Contractor to insure the Works, plant and materials to their full

27 The Contractor shall, without limiting his or the Employer s obligations and responsibilities under Clause 20, insure: (a) the Works, together with materials and Plant for incorporation therein, to the full replacement cost (the term "cost" in this context shall include profit), (b) an additional sum of 15 per cent of such replacement cost, or as may be specified in Part II of these Conditions, to cover any additional costs of and incidental to the rectification of loss or damage including professional fees and the cost of demolishing and removing any part of the Works and of removing debris of whatsoever nature, and Plant, Materials and Contractor s Documents for not less than the full reinstatement cost including the costs of demolition, removal of debris and professional fees and profit. replacement cost with an additional sum of 15 per cent of such cost to cover for any additional costs, while FIDIC 99 has required the insuring Party to insure for the same in addition to the Contractor s Documents for not less than the full reinstatement cost including other additional costs.

28 10- Extension of Time for Completion Points noted between FIDIC 87 and FIDIC 99: FIDIC 87 Statement(s) FIDIC 99 Statement(s) Comparison / Comments Sub-Clause 44.1: (e)other special circumstances which may Sub-Clause 18.4: (d) Unforeseeable shortages in the FIDIC 87 has provided similar events to FIDIC 99 that entitle the Contractor to extension of occur, other than through a default of or breach of contract by the Contractor or for which he is responsible, availability of personnel or Goods caused by epidemic or governmental actions, time, except for point (e) of FIDIC 87 and point (d) of FIDIC 99. The said point (e) entitles the Contractor to extension of time for special circumstances which may occur other than through a default or a breach of contract by the Contractor, leaving a room for uncertainty as to what could be deemed as special circumstances. FIDIC 99 has avoided such an uncertainty through point (d) by specifying certain circumstances that would entitle the Contractor to extension of time, such as unforeseeable shortages in the availability of personnel or Goods caused by epidemic or governmental actions. Other minor differences were noted between the two forms.

29 11- Arbitration Points noted between FIDIC 87 and FIDIC 99: FIDIC 87 Statement(s) FIDIC 99 Statement(s) Comparison / Comments Sub-Clause 67.3: Any dispute in respect of which: (a) the decision, if any, of the Engineer has not become final and binding pursuant to Sub- Clause 67.1, and Sub-Clause 20.6: Unless settled amicably, any dispute in respect of which the DAB s decision (if any) has not become final and binding shall be finally settled by international arbitration. Minor differences were noted between FIDIC 87 and FIDIC 99. FIDIC 87 has mentioned the Engineer s decision while FIDIC 99 has mentioned the DAB s (Dispute Adjudication Board) decision due to the fact that FIDIC 87 does not include provisions relevant to the Sub-Clause 67.3: shall be finally settled, unless otherwise specified in the Contract, under the Rules of Conciliation and Arbitration of the International Chamber of Commerce by one or more arbitrators appointed under such Rules. Sub-Clause 20.6: (b) the dispute shall be settled by three arbitrators appointed in accordance with these Rules, and formation of a DAB. FIDIC 87 has specified that the settlement of disputes would be implemented by one or more arbitrators, while FIDIC 99 has specified three arbitrators.

30 12- Engineer s Duties and Authority Points noted between FIDIC 87 and FIDIC 99: FIDIC 87 Statement(s) FIDIC 99 Statement(s) Comparison / Comments Sub-Clause 3.1: The Engineer s staff shall include suitably qualified engineers and other professionals who are competent to carry out these duties. Sub-Clause 2.1: (b) The Engineer may exercise the authority specified in or necessarily to be implied from the Contract, provided, however, that if the Engineer is required, under, the terms of his appointment by the Employer, to obtain the specific approval of the Employer before exercising any such authority, particulars of such requirements shall be set out in Part II of these Conditions. Provided further that any requisite approval shall be deemed to have been given by the Employer for any such authority exercised by the Engineer. Sub-Clause 3.1: The Engineer shall have no authority to amend the Contract. Sub-Clause 3.1: The Engineer may exercise the authority attributable to the Engineer as specified in or necessarily to be implied from the Contract. If the Engineer is required to obtain the approval of the Employer before exercising a specified authority, the requirements shall be as stated in the Particular Conditions. The Employer undertakes not to impose further constraints on the Engineer s authority, except as agreed with the Contractor. However, whenever the Engineer exercises a specified authority for which the Employer s approval is required, then (for the purposes of the Contract) the Employer shall be deemed to have given approval. Sub-Clause 3.1: whenever carrying out duties or exercising authority, specified in or implied by the Contract, the Engineer shall be deemed to act FIDIC 99 has addressed the Engineer s staff with regards to their qualifications, while FIDIC 87 is silent in this regard. FIDIC 99 has specified that the Engineer shall have no authority to amend the Contract, while FIDIC 87 is silent in this regard. Minor differences were identified between FIDIC 87 and 99 with regards to this point except that FIDIC 99 has added the Employer s undertaking not to impose further constraints on the Engineer s authority, except as agreed with the Contractor. FIDIC 99 has specified that the Engineer shall be deemed to act for the Employer whenever carrying out duties in accordance to the