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International construction contract changes expected in 2017

18 January 2017

FIDIC contract documents are under development by the International Federation of Consulting Engineers to significantly reduce uncertainty for construction contractors and employers. The FIDIC suite of construction contracts is commonly used in South Africa particularly the Red Book adapted versions used by SANRAL and ESKOM.

Sixty years after the first contract document was published by FIDIC (the Red Book), the rainbow suite of standard construction contracts is due to be published in 2017. A revised version of the Contract for Dredging and Reclamation and the White Book (the Model Services Agreement) will also be published shortly.

A completely new contract document has also been drafted specifically for tunnelling and underground works. Called the Emerald Book, this should be ready for publication in 2018 according to Ian Massey, director at MDA Attorneys, who has recently returned from the FIDIC International Contract Users Conference held in London. 

He says that one of the most significant changes in the rainbow suite of contracts is the adoption of standing adjudication boards to be appointed at the outset of a contract. “The new contracts seek to anticipate and avoid disputes, which ad hoc adjudication provisions in current contracts (such as in the current version of the FIDIC Yellow book) have not been able to do,” he says. 

Time bars have also been revisited. A further time bar on the submission of a contractor’s detailed claim and on employer claims will now apply. However, adjudication boards now have the ability to review certain of these time bars.

“The changes were made to clarify the requirements of the contract and thus make it easier to use, but delegates at the London conference were concerned the contracts would be more complicated and difficult to understand. Our experience at MDA Consulting is that long and complicated contract clauses are unlikely to be understood. In our view, it is doubtful whether the changes to the FIDIC Rainbow suite will to promote conflict free contracts but we look forward to the release of the final versions which we intend to unpack at the our annual Collective Wisdom Conference later this year,” says Massey. 

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