1 / 31

KEY ASPECTS OF FIDIC DBO CONTRACTS

KEY ASPECTS OF FIDIC DBO CONTRACTS. 23/09/2011. Content. INTRODUCTION : THE NGRBA AND THE FRENCH SUPPORT HOW TO CHOOSE THE BEST FIDIC CONSTRUCTION CONTRACT FOR A WASTE/WATER INFRASTRUCTURE PROJECT IN PPP ? MAIN PITFALLS IN CONSTRUCTION CONTRACT BEFORE COMMERCIAL OPERATIONS.

ova
Download Presentation

KEY ASPECTS OF FIDIC DBO CONTRACTS

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. KEY ASPECTS OF FIDIC DBO CONTRACTS 23/09/2011

  2. Content • INTRODUCTION : THE NGRBA AND THE FRENCH SUPPORT • HOW TO CHOOSE THE BEST FIDIC CONSTRUCTION CONTRACT FOR A WASTE/WATER INFRASTRUCTURE PROJECT IN PPP ? • MAIN PITFALLS IN CONSTRUCTION CONTRACT BEFORE COMMERCIAL OPERATIONS

  3. THE NGRBA AND THE FRENCH SUPPORT • THE NGRBA AND THE FRENCH SUPPORT

  4. THE NGRBA AND THE FRENCH SUPPORT Technical Assistance to NGRBA for project preparation (FASEP team based in Delhi + experts from France – Consortium Egis / SCE / Egis India) Duration of the services is 15 months Objectives : => Launch Team to facilitate the projects implementation in the 5 states along Ganga river => Move ahead rapidly with the World Bank Program => Support NGRBA in NMCG (ex-PMG) operations

  5. FRENCH EXPERIENCE IN WATER MANAGEMENT Major features of water sector in France : Creation of Water agencies since 1964 for the 6 main hydrographical basins they collect water consumption fees and pollution taxes (households, industries, pesticides users) They use them to invest in water infrastructures and environmental actions within the river basin (subsidies to local authorities). 5

  6. Major features of water sector in France : “Water Parliaments” at the basin level provide the democratic basis for debate and consultation in water management issues. There are water management plans at basin and sub-basin levels. They establish some rules related to water use, licensing and public participation. FRENCH EXPERIENCE IN WATER MANAGEMENT 7

  7. Major features of water sector in France : Private participation through delegation of public service Mainly CONCESSION (BOT) or LEASE CONTRACT in water supply and sanitation. The public authority is still present (regulatory role) and shares the exploitation financial risk with the private actor The Contractor shall produce an annual reports showing incomes and expenses in a transparent way, including reinvestment of savings in infrastructures. FRENCH EXPERIENCE IN WATER MANAGEMENT 8

  8. MEASURING RESULTS 200 1990 2008 9

  9. FIDIC DBO CONTRACT • HOW TO CHOOSE THE BEST FIDIC CONSTRUCTION CONTRACT FOR A WASTE/WATER INFRASTRUCTURE PROJECT IN PPP ?

  10. FIDIC PRESENTATION • FIDIC founded by French engineers in 1913 as Fédération Internationale des Ingénieurs Conseils (International Federation of Consulting Engineers) • 1945 = 40 Engineers Associations ; 2009 = 80 Engineers Associations including India • 1957 = 1st Red Book as « Conditions of Contract for Construction for Building Works designed by the Employer », 2008 = 1st Gold Book • www.fidic.org , HO in Geneva, Switzerland.

  11. FIDIC CONTRACTS / PARTIES INVOLVED Lenders The Employer DESIGN BUILD CONTRACT SERVICE CONTRACT Disputes (Adjudication Board) TAKING-OVER CERTIFICATE The Engineer or Employer’s representative OPERATION SERVICE CONTRACT FIDIC contract Administration Auditing Body No contractual link ! The Contractor

  12. Historic Background of FIDIC contracts

  13. Historic Background of FIDIC contracts

  14. Best choice for FIDIC CONTRACT • The Engineer undertakes • the design ? • Small project ? • (small amounts, small risks) yes no yes no • The Contractor undertakes the design The project is a plant and includes a balanced risk allocation ? no • Fixed Cost • Risks borne mainly by the Contractor yes yes • Operations(DBO) no • Discuss in details yes no

  15. Principles FIDIC : Risks allocation Increase cost of Project Increase risk for The Contractor SILVER BOOK GOLD BOOK / YELLOW BOOK RED BOOK Increase risk for the Employer Increase design control by the Employer

  16. COMPARISON FIDIC / French law 1 YEAR 1 YEAR 1 YEAR 2 YEARS < 20 YEARS CCAG P.I. CCAG TRAVAUX LAW IDEA => DEGREE OF PRECISION FRANCE CONCEPT PFS -FEED DTL DESIGN CONSTRUCTION OPERATIONS FRENCH CONSTRUCTION LAW CONTRACTS GOVERNED BY LOCAL LAWS OF THE COUNTRY Red book Yellow book Silver book White book FIDIC Gold book

  17. FIDIC DBO CONTRACTS : KEY POINTS • Employer’s requirements : • Careful technical investigations of site • Risk assessments (technical, commercial, financial) • Infrastructure to be « fit for purpose » • Tender procedure with prequalification • Design responsibilities : • Strict definition of design criteria • Unforeseable difficulties to be foreseen (!) • Interfaces management (networks Vs. treatment plant) • Claim management : • Special care for drafting the Contract (Particular Conditions of contract to be fit with the Laws) • Contemporary records to be kept • Mechanisms to avoid disputes

  18. 20 CLAUSES 193 SUB-CLAUSES CLAUSE 3 The Employer’s representative CLAUSE 2 The Employer CLAUSE 4 The Contractor COST € CLAUSE 13 Variation and Adjustements CLAUSE 14 Contract Price and Payment CLAUSE 20.7 Amicable Settlement (DAB) CLAUSE 1 General Provisions CLAUSE 17 Risk allocation CLAUSE 18 Exceptionnal Risks CLAUSE 19 Insurance CLAUSE 15 Termination by Employer CLAUSE 16 Termination by Contractor CLAUSE 19 Force Majeure CLAUSE 20 Claims COSTS € FIDIC GOLD BOOK CONTRACT CLAUSE 5 Design CLAUSE 6 Staff and Labour CLAUSE 7 Plant, Materials, Workm CLAUSE 11 Testing CLAUSE 12 Defects CLAIMS CLAUSE 8 Commencement, Completion and Programme CLAUSE 9 Design-Build CLAUSE 10 Operation Service DELAYS NOTICES QUALITY TIME

  19. SOME PITFALLS IN CONSTRUCTION CONTRACT • 3. MAIN PITFALLS IN CONSTRUCTION CONTRACT BEFORE COMMERCIAL OPERATIONS

  20. SOME PITFALLS IN CONSTRUCTION CONTRACT ACCESS TO SITE DELAYED FOR SITE INVESTIGATIONS TOPOGRAPHY AND GEOTECHNICS (SC 2.1) FORCE MAJEURE (EARTHQUAKE, STRIKE, WAR) (SC 18) New Critical Path Design Civil works ADVERSE SUB-SOIL CONDITIONS => COST +40% (SC 4.12) Procurement Initial Critical Path CUSTOM DUTIES NOT SOLVED IN TIME DUE TO MINISTRIES DELAYS (SC 9.4) Erection Commissioning NO RAW WATER IN TIME AS NETWORKS WORKS ARE DELAYED (SC 11.2) WHO PAYS FOR DELAY ? (SC 9.13) OPERATIONS Time of Completion Cut-Off Date YEAR 1 YEAR 2 UP TO 20 YEARS…

  21. CONCLUSION • INTERNATIONAL FIDIC DBO CONTRACT « GOLD BOOK » IS PARTICULARLY FIT FOR THE PURPOSE OF PPP WATER TREATMENT; IT IS … • COMPLETE • COMONLY SHARED BY ALL INTERNATIONAL PARTIES • DRAFTED TO AVOID AND TREAT PITFALLS • … BUT WHO IS PROVIDING THE FINANCE ? FROM DBO, ADD AN « F » …THERE COMES THE « DB F O » CONTRACT - THANK YOU FOR YOUR ATTENTION - THINK ABOUT FRENCH EXPERTISE ON FIDIC AND ON WATER PROCESS !

More Related