Fidic Assignment Final

ANALYSIS OF THE FIDIC CONDITIONS OF CONTRACT (RED BOOK) 1999 EDITION
ANALYSIS OF THE FIDIC CONDITIONS OF CONTRACT (RED BOOK)

1999 EDITION
Submitted To:
Dr. Hadikusumo
Submitted By:
Suyog Krishna Shrestha (115573)
Takehiko Yamaji (115663)
Deeptara Luitel (115564)
Muhammad Afzal (115659)
LEGAL & CONTRATUAL RISK MANAGEMNT
Table of Contents
1.0 Introduction: .............................................................................................................................. 1

2.0 Management of the project risks by FIDIC: ............................................................................. 1
2.1 Project Time: ......................................................................................................................... 1
2.2 Project Cost: .......................................................................................................................... 6
2.3 Project Quality: ................................................................................................................... 10
2.4 Project Safety: ..................................................................................................................... 13
3.0 Project Risks of OWNER (How he can manage them): ........................................................... 14
4.0 Project Risks of CONTRACTOR (How he can manage them): ................................................. 18
4.0 FIDIC Timeline: ........................................................................................................................ 30
5.0 Claim, Suspension and Termination by the Contractor: ......................................................... 30
5.0 Claim, Suspension and Termination by the Contractor: ......................................................... 35
6.0 Clauses that can allow contractor to demand EOT/Additional Payment: .............................. 40
7.0 Conclusion: .............................................................................................................................. 41
Appendix I ..................................................................................................................................... 42
1.0 Introduction:
FIDIC (Fdration Internationale des Ingnieurs Conseils) is an international
organization developed the brief and practical contract types for the international projects. FIDIC
Red book refers to the general conditions of contract for construction. In order to change/modify
any of the condition in the general conditions of FIDIC based of the specific conditions of the
project, we need to document that in the supplementary conditions of the contract.
In the following part of this report, we have tried to analyze the project risks based on
various perspective such as time, cost, owner, contractor as documented in the general conditions
of the contract of FIDIC RED BOOK (1999 Edition) etc. The analysis is in form of Questions as
stated below.
2.0 Management of the project risks by FIDIC:

FIDIC general conditions of contract provide the structure and guidelines to manage
project risks from various perspectives. Below is the detail of the respective clauses and
explanation of how the document is managing those particular risks.
2.1 Project Time:
MANAGEMENT OF PROJECT RISK BY FIDIC

TIME
S.No. CLAUSE No.
CLAUSE
RISK MANAGEMENT
1.1
Definitions
Most of the terms defined are related with time for

example. The contract, commencement date should
be taken into account to make it on specified time.
1.2
Interpretation
It should be mentioned very clearly in the contract

during providing conditions.

TIME
S.No. CLAUSE No.
CLAUSE
RISK MANAGEMENT
1.3
Communications
For the approvals, certificates not to be delayed,

communications must be made out by in writing or
delivered by hand, or sent by email or courier
1.4
Law and language
The language for communications shall be that stated

in the Appendix to Tender.
1.5
Priority of
documents
The documents should be in proper sequence i.e. The

contract agreement, letter of acceptance, letter of
tender ,the particular conditions, etc.
1.6
Contract agreement
The parties should go for contract agreement within

28 days after the Letter of acceptance is awarded.
1.9
Delayed drawings or
Instructions
The contractor should give notice to the engineer for

the extension of time for any delays concerning the
drawings and cost within the time
And payment of any cost plus reasonable profit.
2.2
Permits, Licenses or
Approvals
The contractor should be provided reasonable

assistance in getting copies of Laws of the country
relevant to the contract and also provided
Permits, licenses or approvals for delivery of goods
and export of contractors equipment from site.
10
3.5
Determination
For variation that has been made, then the engineer

will make the determination, whether to approve or
disapprove, where the determination
Site data
Is binding, unless it is revised by DAB procedure.

2

TIME
S.No. CLAUSE No.
CLAUSE
RISK MANAGEMENT
The contractor should inspect the site and collect the
data required before submitting the tender including
all the form and nature of site
4.1O
Including sub-surface conditions, hydrological

conditions, laws and labor practices of the country
and other contractors requirements.
11
12
13
14
4.16
Transport of goods
The contractor should prepare material delivery

schedule and submit to the engineer so that he could
check the material delivery on site.
4.17
Contractor's
Equipments
For the mobilization of the equipment, the contractor

needs the engineer's approval so that after use, it can
be removed from the site.
4.20
Employers
Equipment and
Free Issue Material
Any substandard material supplied for the work and

made use of might negate the original design of the
project. This could lead to failure of the project on
completion. So, standard materials as specified in the
design must be purchased and applied.
Fossils
The artifacts should be removed by the owner

through diplomatic arrangement with the community
to remove them or otherwise to make way for the
contract or to do his work. This done timely will go a
long way to check delay in the execution of work.
4.24

TIME
S.No. CLAUSE No.
CLAUSE
RISK MANAGEMENT
15
7.3
Inspection
Based on the specification of the designed project,

the monitoring or time to time inspection of the work
with guarantee the job or work being alone according
to the designed standard.
16
7.4
Testing
Contractor should review testing method and

standard in specification or in condition of contract if
they fail to pass test on completion
17
7.5
Rejection
The Engineers duty amongst others is to ensure the

contractor complies and carry out the project
execution according to specification and schedule.
18
7.6
Remedial Work
There should be good relationship between the

client/owner, the Contractor, the Sub-Contractor and
the nominated Sub-contractor
8.1
Commencement of
Works
The owner in agreement with his Project Engineer on

verification of claims by the Contractor should reach
away forward on time so as to avoid delay in the
work execution.
Program
Contractor should ask for time extension before the

validity period expires. Providing detail explanation to
engineer/owner.
Extension of Time
for Completion
Any Circumstances that could lead to extension of

time must be notified within 28 days in writing to the
Engineer who then act within a reasonable time. The
extension of time must be avoided by owner to avoid
the delay in completion.
19
20
21
8.3
8.4

TIME
S.No. CLAUSE No.
CLAUSE
RISK MANAGEMENT
If the access road Is the problem it should be
negotiated and provided early enough by the owner
before the commencement of the work; Natural
occurrence is not the fault of either and should be
integrated in the plan.
Variation in design may cause extension of time if

agreed upon by the contractor and the owner.
22
23
24
25
Delay Damages
Where there is friction, the work can suffer a setback

time wise. This situation can be arrested by mutual
understanding engendered by the Engineer or and
Suspension of Work
The owner as much as possible should avoid a

situation such as this. The consequence of this act
leads to extension of time to which the contractor
can claim.
8.9
Consequences of
Suspension
The project owner being conscious of the

consequences of acts that could lead to termination
of contract is to avoid it. An amicable resolution of
any issue in the contract terms can be a way out of
the situation. The cost of termination of contract can
be more costly than retendering for completion of
the project.
8.10
Payment for Plant

and Materials in
Event of Suspension
The payment issue is sensitive and therefore the

project owner should employ every possible means
to ensure that the contractor is settled so as not to
degenerate to suspension
8.7
8.8

TIME
S.No. CLAUSE No.
26
27
8.11
10.1
CLAUSE
RISK MANAGEMENT
Prolonged
Suspension
The project owner, with a good understanding can

settle this claim amicably with the contractor. He may
not allow it out of hand. The two parties could
negotiate unless otherwise, there will be more
dispute and delay.
Taking Over of the

Works and Sections
Taking over by the employer is a critical phase as

defect notification period starts and responsibility of
the facility is being transferred to the employer by
this certificate. It is a critical point of potential claims
if could not handle properly. Fiddich entails this
clause with specific procedure, dates and deadlines
to manage the risks.
2.2 Project Cost:

Cost
S.No. CLAUSE No.
1.1
CLAUSE
RISK MANAGEMENT
Definitions
Few terms related with cost for example, tendering, bill
of quantities, variation, money and payment should be
taken into consideration.
1.7
Assignment
Either party may, as security in favor of a bank or

financial institution, assign its right to any moneys due,
or to become due, under contract.

Cost
S.No. CLAUSE No.
CLAUSE
1.1O
Employer's Use of
Contractor's
Documents
1.12
Confidential details
RISK MANAGEMENT
The contractor should give the employer a nonterminable transferable non-exclusive royalty-free
license to copy, use and communicate the
Contractors documents including modifications.
The contractor should disclose all confidential to verify
the compliance with the contract.
1.13
Compliance with
laws
The contractor should give the notice regarding all

payments of taxes, duties and fees and obtain all
permits, licenses and approvals
As required by the laws in relation to the execution and
completion of the works and remedying of the any
defects.
1.14
Joint and Several

liability
2.1
Right of Access to
Site
Before contractor enters the site, he must submit

performance bond about 10% to prevent the delay of
the works.
2.4
Employer's financial
arrangement
Reasonable evidence regarding financial arrangements

should be made out to pay contract price and should
be submitted within 28 days.
2.5
Employer's claims
If partner cannot finish, then engineer should be able

to take the responsibility in case of joint venture.
After receiving any request from the contractor and

contractor should always be aware of the financial
status of his contract.
The contractor should be informed by the employer
after he finds any even and any circumstances so that
engineer could make determination.

Cost
S.No. CLAUSE No.
CLAUSE
RISK MANAGEMENT
And the notice is related with the extension of the
Defects Notification Period that is made before expiry
of such period.
10
3.2
Delegation by the
Engineer
11
4.2
Performance
Security
12
4.5
Assignment of
benefits of
subcontract
13
4.6
Cooperation
14
4.12
Unforeseeable
physical conditions
The experienced contractor, during the period of

tender, should consider these unforeseeable
conditions and should notify the engineer within 28
days.
15
4.13
Rights of way and

facilities
16
4.24
Fossils
Contractor should find additional ways to access to the

site and use the other areas not provided and specified
by owner.
When fossils, coins, antiquity or archeological artifacts
are found, the owner, on report by the contractor, acts
immediately to avoid delay.
Contractor should clarify with the engineer in some

communications about the claim and the Interim
payment certificate.
Contractor need to buy this bond as insurance to make
sure for the commitment by the contractor to the
works.
Once the benefit gets transferred to owner, then
responsibility directly goes to owner for material
supply equipment operation.
Contractor must identify the price of cooperation or
can be taken as an instruction if not mentioned in the
contract.

Cost
S.No. CLAUSE No.
17
18
19
20
21
22
23
7.3
7.4
7.5
8.7
8.9
8.10
9.4
CLAUSE
Inspection
Testing
Rejection
RISK MANAGEMENT
To ensure quality work, the owners staff shall at all
reasonable times have full access to the site for which
the Project is going on. The contractor shall give the
owners personnel full opportunity to carry out their
assigned duties without hindrance.
Review testing method and standard in specification or

in condition of contract.
The contractor has to establish the quality insurance
system in his company to control the quality of work.
Delay Damages
The system monitored shall assist in the desired quality

work and should be audited from time to time.
Consequences of
Suspension
Conduct site visit before tendering to gather as much

information as possible about site condition.
Contractor should incorporate such conditions in
contract and to have good comparison later when such
conditions are encountered.
Payment for Plant

and Materials in
Event of Suspension
Failure to Pass Tests

on Completion
The detail report on why the payment is delayed

should be given to contractor.eg.it is because of the
unsatisfactory work and part of payment is delayed
until rework is carried out
The failure of test has additional cost and delay risk,

folic managed the risk as to specify the party
(contractor, if under his responsibility) liable of
repeating the test until successful or the contract price
can be reduced to cover reduced value to the
employer.

Cost
S.No. CLAUSE No.
24
12.3
CLAUSE
Evaluation
RISK MANAGEMENT
There is a risk for the deciding the quantity and price
for the item of work, folic guides to decide those.
Moreover, it guides on the items of work not specified
in the contract.
2.3 Project Quality:

QUALITY
S.No. CLAUSE No.
CLAUSE
RISK MANAGEMENT
1.1
Definitions
Term related with quality egotist after completion is

carried out according to the particulate conditions.
1.8
Care and Supply of

documents
The contractor shall keep the copy of contract

documents on the site, named Specification and the
drawings and the specifications should be in custody
and care of the employer.
1.11
Contractor's use of
Employer's
Documents
The employers shall retain the copyright and the

intellectual property rights in the Specification, the
drawings and other documents made by the
Employer.
3.1
Engineer's Duties and

Authority
The engineer has the right to issue variations which

may include omissions i.e. Cancellation of the works.
Instructions of the
Engineer
If the contractor should solve the matter regarding

the additional costs due to instruction with the
engineer and if not possible, then the contractor
should send a claim notice, and the instruction should
not be given directly to the contractor or
subcontractor.
3.3
10

QUALITY
S.No. CLAUSE No.
CLAUSE
RISK MANAGEMENT
To replace the engineer, not less than 42 days,
employer should give the notice to the contractor,
with supporting particulars.
3.4
Replacement of the
engineer
4.3
Contractor's
representative
Contractor should appoint the representative on site

who is fluent in the language mentioned in the
contract.
4.4
Subcontractors
The contractor and the subcontractor should transfer

their benefits to the owner.
Setting out
Contractor is responsible for setting out work like

positioning, dimensioning of all parts of the works ND
also should rectify them and if errors occurs, then
should notify to the engineers so that he may ask for
the additional payment and time.
4.9
Quality assurance
The contractor must develop quality manual and plan

and Audit should be carried out by engineer or should
be mentioned in particular conditions.
4.11
Sufficiency of the
accepted contract
amount
The contactor must fulfil all the requirements so that

the correctness and the sufficiency of the accepted
contract amount can be easily met.
12
4.20
Employers
Equipment and Free
Issue Material
Quality of materials and equipment supplied must be

gauged each by the unit cost (Price) and agreed by
the engineer. The BOQ is used as part of quality
performance Qualitative and cost effective material
are pointer to the quality of work.
13
4.21
Progress Reports
The monthly report properly guided would help in the

desired quality control for greater performance.
14
6.8
Contractor's
Superintendence
Implement method statement and quality insurance

system very strictly.
10
11
4.7
11

QUALITY
S.No. CLAUSE No.
15
16
17
18
19
20
CLAUSE
RISK MANAGEMENT
Contractors
Personnel
Having experienced and committed team members.

Having work method statement for each work and
executing work under supervisor.
Samples
The Engineer shall instruct the Contractor submit

Testing Plan for all project. The Contractor has to
submit Testing document that including testing
method/ procedure, standard, form for the Engineer
consideration before testing. The Engineer has to
check progress of work.
Inspection
It is suggested that the quality of work being done is

being gauged through inspection beginning from
materials used and the skills employed. The
inspection report should guide the contractor and
sub-contractor.
Testing
Contractor should review testing method and

standard in specification or in condition of contract if
they fail to pass test on completion
7.5
Rejection
The Engineer has to instruct the Contractor submit

shop drawing by compare drawing with survey data
of construction site for approval before starting.
11.1
Completion of
Outstanding Work
and Remedying
Defects
This clause clearly makes contractor liable for the

works remaining and the repair of the works of poor
quality. So, the risks of re-work will make the
contractor to maintain his quality during the
execution of the work.
6.9
7.2
7.3
7.4
12
2.4 Project Safety:

SAFETY
S.No. CLAUSE No.
1
2.3
4.1
4.8
CLAUSE
RISK MANAGEMENT
Employer's Personnel
Safety procedures and Protection of the environment

is required.
The contractor should be responsible for all

Contractor's Obligations contactors documents, temporary works and design
of each plant and materials to be accordance within
the contract and should be able to take responsibility
for adequacy, stability and safety of all Site
operations.
Safety procedures
4.15
Access Routes
4.21
Progress Reports
The contractor should be responsible for all

contactors documents, temporary works and design
of each plant and materials to be accordance
temporary works like fencing, guarding etc. So, need
to make safety manual and safety plan.
As government has restrictions for allowance of size

of vehicles passing the roads and the bridges, so the
contractor must consider these things in tendering
and if in case, any damages occurs, then contractor
himself has to handle these problems related with the
local authority.
Investigation productive in project. Revise scheduling
of project. Make details planning of critical works.
13

SAFETY
S.No. CLAUSE No.
CLAUSE
6.7
Health and safety
7.3
Inspection
RISK MANAGEMENT
The Engineer shall instruct the Contractor submit

Safety Plan for all project. The Contractor has to
submit Safety document that including Safety
method/ procedure, standard, form for the Engineer
consideration. The Engineer has to check progress of
work for consideration whether the Contractor can
Safety Plan is efficient or not. Arrange site meeting to
monitoring status of Safety and construction
progress.
Making testing plan and submit to the Engineer.
Review testing method and standard in specification
or in condition of contract
3.0 Project Risks of OWNER (How he can manage them):

The Following table shows the risks borne by the owner according to FIDIC and
suggestions to manage these risks.
RISK ON PARTIES (FOR OWNER)

S.No. CLAUSE No. CLAUSE
1.1
Definitions
RISK FOR OWNER
RISK CONTROL
Risk related with contract

price, site ,etc.
These terms should be

clearly stated in the
contract as the
responsibility for running
works on site and the cost
related to owner.
14

1.2
1.6
2.1
Interpretation
Contract
agreement
Right of access to
the site
2.2
Permits, licenses
or approvals
2.3
Employer's
Personnel
2.4
Employer's
Financial
arrangement
4.5
Assignment of
benefits of
subcontract
RISK FOR OWNER
RISK CONTROL
Risk related with different

terms like 'Agreement,
Written or in writing etc.
The marginal words and

other headings shall not be
taken into consideration in
the interpretation of these
conditions.
Risk related with the time,

cost ,quality and safety
The contract agreement

should be done within 28
days after contractor
receives the LOA and the
contract agreement shall
be based upon the form
annexed to the particular
conditions.
Risk of delay
The owner shall give the

contractor right of access
to the site stated in
appendix to tender.
Risk of compliance
The employers shall

provide assistance to
contractor by obtaining
copies of laws of country
for delivery of good s and
export of contractors
equipment when removed
from the site.
Risk related with safety

procedures and protection
of environment
The employer should

ensure the personnel and
other contractors on the
site (cooperation).
Risk of suspension and

termination
The employer should

submit within 28 days after
receiving any request from
the contractor with
detailed particulars.
Risk of risk transfer
Once the benefit gets

transferred to owner, all
the responsibility goes to
the owner.
15

10
11
12
4.7
Setting out
4.12
unforeseeable
physical
conditions
4.17
Contractor's
equipment
4.20
Employers
Equipment and
Free Issue
Material
13
4.24
Fossils
14
7.4
Testing
15
16
7.6
8.4
Remedial Work
Extension of Time
for Completion
RISK FOR OWNER
RISK CONTROL
Risk of claim by contractor
Because of delay of
specified items, the
contractor will claim and
after getting the notice,
engineer should go
through sub clause
3.5(determination) to
agree or determine.
The owner should set out

the reasons why
contractors considers them
to be unforeseeable
The Employer shall, at his

risk and cost provide these
materials at the time and
place specified in the
Contract
Contractors Claims (a) an
extension of time for
completion (b) payment of
any such Cost plus
reasonable profit
any such Cost plus
reasonable profit
For the mobilization of

equipment after use, the
consent is needed from
engineer and if delay
occurs in providing
consent, then contractor
will claim.
Enforcing the engineers
to get all the necessary
permits approved before
the work commence at
the site.
Detail survey of the site to
check if such ground
condition exists all over or
just in a single spot.
Define clearly the liability
of Test on Completion in
contract.
The Employer shall be

entitled to employ and pay
other persons to carry out
the work
Conduct a check list of

all the activities to be
performed before the
signing the contract.
Contractors Claims for an

completion
Enforcing contractor to
prepare shop-drawing and
getting approved before
every construction
16

RISK FOR OWNER
RISK CONTROL
Having good relation and
regular communication
with the consultant is vital.
Work as per the
specification and approved
drawings
17
18
19
20
21
22
23
8.8
Suspension of
Work
8.9
Consequences of
Suspension
14.11
Application for
Final Payment
Certificate
14.15

any such Cost plus
reasonable profit
any such Cost plus
reasonable profit
Owners Should have

evidence like pictures, test
report before suspending
the work.
Owners Should have
evidence like pictures, test
report before suspending
the work.
After the application, owner

has to take the responsibility
of the product in spite of the
detection of deterioration.
Owner should force the

engineer to confirm the
value of all work done in
accordance with the
contract.
Currencies of
Payment
If the exchange rate

negatively changes, actual
payment become bigger
than contract price
Using bank consulting,

appropriate insurance
should be applied.
17.3
Employer's Risks
In the stated particular

conditions, owner has to
care the damage from the
issue.
Appropriate insurance is
necessary. Additionally, if
the foretaste is found,
owner should make the
decision how to treat the
issue as soon as possible.
18.2
Insurance for
Works and
Contractor's
Equipment
Insurance has the exclusion

statement. If the causing loss
or damage is classified
exclusion, owner has to
discuss with contractor who
should indemnify.
By using particular
condition, how to
indemnify should be
decided in the contract.

conditions, owner has to
care the damage from the
issue.
Appropriate insurance is
necessary. Additionally, if
the foretaste is found,
owner should make the
decision how to treat the
issue as soon as possible.
19.4
Consequences of
Force Majeure
17

24
20.6
Arbitration
RISK FOR OWNER
RISK CONTROL
If dispute is judged by
arbitration, owner must
receive any result. And it
becomes the final result.
At first, owner should

mitigate the predictable
risk in the contract. And
after contracting, owner
should monitor the project
risk. And once problems
and risks causing, owner
should make decision
quickly with
communicating with
stakeholders.
4.0 Project Risks of CONTRACTOR (How he can manage them):

The Following table shows the risks borne by the contractor according to FIDIC and suggestions
to manage these risks.
RISK ON PARTIES (CONTRACTOR)
S.No.
CLAUSE
No.
CLAUSE
RISK FOR CONTRACTOR
1.1
Definitions
1.2
Interpretation
1.3
Communication
RISK CONTROL
The contractor
Risk related with the variation, should carry out
materials, temporary
these works so
worksheet.
clearly mentioned
in the contract.
The marginal
words and other
headings shall not
Risk related with different
be taken into
terms like 'Agreement,
consideration in
Written or in writing' etc.
the interpretation
of these
conditions.
The notice should
be sent by email or
Risk related with issuing
delivered by hand,
approval, certificates,
courier or other
consents and determination.
reliable medium to
prevent delay.
18

S.No.
CLAUSE
No.
CLAUSE
RISK FOR CONTRACTOR
Risk related with the

communication
1.4
Law and language
1.5
Priority of documents
Risk related with the delay
1.6
contract agreement
Risk related with the time,

cost ,quality and safety
1.7
Assignment
1.8
Care and supply of

documents
Risk related with bankruptcy
Risk with the specification
RISK CONTROL
It should be
according to what
has been stated in
the Appendix to
the tender.
To avoid delay, the
documents should
be in the proper
sequence for the
purpose of
interpretation and
if any ambiguity or
difference found,
then instruction
should be issued
by the engineer.
The contract
agreement should
be done within 28
days after
contractor
receives the LOA
and the contract
agreement shall
be based upon the
form annexed to
the particular
conditions.
If both parties
agree, then
another
subcontractor can
be assigned.
The contractor
shall keep on the
site the copy of
documents so that
employer's
personnel can see
these documents
at all reasonable
times and check
the variations and
specifications.
19

S.No.
CLAUSE
No.
CLAUSE
RISK FOR CONTRACTOR
1.9
Delayed Drawings or
Instructions
Risk with the delay of works

or disruption
10
1.12
Confidential Details
Risk with the compliance of

contractor with contract
11
1.13
Compliance with the laws
Risk in performing the

contract
12
1.14
joint and several liability
Risk with legal status
13
2.5
Employer's Claim
Risk of claim
RISK CONTROL
The contractor
should give notice
to engineer if any
necessary drawing
or instructions is
not issued.
The contractor
shall disclose all
such confidential
and other
information as the
engineer.
The contractor
should comply
with applicable
laws otherwise
contractor shall
give notice, pay all
taxes, duties and
obtain license and
approvals for
execution and
completion of the
works.
The contractor
shall not alter his
composition or
legal status
without prior
consent of the
employer.
The contractor will
be noticed by the
employer after any
circumstances or
event is found.
20

S.No.
14
CLAUSE
No.
4.1
CLAUSE
Contractor's obligations
RISK FOR CONTRACTOR
RISK CONTROL
Risk related with works
The contract must

follow what has been
stated in contract,
responsibility of
adequacy, stability and
safety of all site
operations should
submit all details of all
arrangements and
method of execution.
15
4.2
Performance security
Risk of claim
16
4.4
Subcontractor
Risk of termination by
employer
17
4.6
Cooperation
Risk of price variation
18
4.8
Safety procedures
19
4.1O
Site data
Risk of obtaining taking over

certificate
Risk of claim
Performance
security is
required by owner
as a risk control to
ensure contractor
will perform the
contract.
The contractor is
required to obtain
prior consent of
the engineer to
subcontract parts
of the works.
The Contractor
must identify the
price of
cooperation.
The contractor
needs to make
safety manual and
project safety plan
that comply with
govt. safety
regulation.
The contractor
should provide all
the datas required
while executing
site works, also
mention site
conditions
,geography etc.
21

S.No.
CLAUSE
No.
CLAUSE
RISK FOR CONTRACTOR
20
4.14
Avoidance of interference
21
4.16
transport of good
Risk of claims arising from the

transport
Electricity, Water and Gas
The Contractor shall, at his

risk and cost, provide any
apparatus necessary for his
use of these services and for
measuring the quantities
consumed.
Employers Equipment and

Free Issue Material
The Contractor shall be

responsible for each item of
Employer's Equipment whilst
any of the Contractor's
Personnel is operating it,
driving it, directing it or in
possession or control of it
22
23
4.19
4.20
Risk for damages and losses
RISK CONTROL
The contractor
should not disturb
the convenience of
public and must
negotiate with
local authority.
The contractor
should prepare
and update
material delivery
schedule and that
schedule must be
submitted to the
engineer.
Conduct site visit
before tendering
to gather as much
information as
possible about site
condition.
Contractor should
incorporate such
conditions in
contract and to
have good
comparison later
when such
conditions are
encountered.
Owner/Engineer
should provide
details inspection
report if
contractor fail to
remedy defect.
Contractor should
check again to
make sure it is a
fault of contractor
or some external
factors like
environment.
22

S.No.
24
CLAUSE
No.
6.9
CLAUSE
RISK FOR CONTRACTOR
Contractors Personnel
If appropriate, the
Contractor shall then appoint
(or cause to be appointed) a
suitable replacement person.
Inspection
If the Contractor fails to

give the notice, he shall if
and when required by the
Engineer, uncover the work
and thereafter reinstate and
make good, all at the
Contractor's cost.
25
7.3
26
27
7.4
Testing
The cost of carrying out this

Variation shall be borne by
the Contractor,
notwithstanding other
provisions of the Contract.
RISK CONTROL
Having
experienced and
committed team
members. Having
work method
statement for each
work and
executing work
under supervisor.
Contractor should
review testing
method and
standard in
specification or in
condition of
contract if they fail
to pass test on
completion
Implement
method statement
and quality
insurance system
very strictly.
Making testing
plan and submit to
the Engineer.
Review testing
method and
standard in
specification or in
condition of
contract.
Inform the
Engineer about
incur cost and
extra time to
extend the
contract if he want
additional test
which does not
follow standard in
specification.
23

S.No.
28
29
CLAUSE
No.
7.5
7.6
CLAUSE
RISK FOR CONTRACTOR
Rejection
If the Engineer requires this

Plant, Materials or
workmanship to be retested,
the tests shall be repeated
under the same terms and
condition. If .the rejection
and retesting cause the
Employer to incur additional
costs, the Contractor shall
subject to Sub-Clause 2.5
[Employer's Claims] pay
these costs to the Employer.
Remedial Work
The Contractor shall comply

with the instruction within a
reasonable time, which shall
be the time (if any) specified
in the instruction, or
immediately if urgency is
specified under subparagraph
(c).
RISK CONTROL
Submission Plant,
Material and
Workmanship to
the Engineer for
approval before
working.
Making testing
plan and submit to
the Engineer.
Review testing
method and
standard in
specification or in
condition of
contract.
Inform the
Engineer about
incur cost and
extra time to
extend the
contract if he want
additional test
which does not
follow standard in
specification.
Submission Plant,
Material and
Workmanship to
the Engineer for
approval before
working.
Making testing
plan and submit to
the Engineer.
Review testing
method and
standard in
specification or in
condition of
contract.
24

S.No.
30
31
32
CLAUSE
No.
8.4
8.6
8.7
CLAUSE
Extension of Time for

Completion
Rate of Progress
Delay Damages
RISK FOR CONTRACTOR
Contractors Claims for an

completion
Unless the Engineer notifies

otherwise, the Contractor
shall adopt these revised
methods, which may require
increases in the working
hours and/or in the numbers
of Contractors Personnel
and/or Goods, at the risk and
cost of the Contractor
Damages to the Employer.
These delay damages shall be
the sum states in the
Appendix to Tender, which
shall be paid for every day.
However, the total amount
shall not exceed the maximum
amount of delay damages
stated in the Appendix to
RISK CONTROL
Inform the
Engineer about
incur cost and
extra time to
extend the
contract if he want
additional test
which does not
follow standard in
specification.
Submission Plant,
Material and
Workmanship to
the Engineer for
approval before
working.
Having good
relation and
regular
communication
with the
consultant is vital.
Work as per the
specification and
approved
drawings
Investigation
productive in
project.
Revise scheduling
of project.
Make details
planning of critical
works.
Investigation
productive in
project.
Revise scheduling
of project.
Make details
works.
25

S.No.
CLAUSE
No.
CLAUSE
RISK FOR CONTRACTOR
RISK CONTROL
Tender.
33
34
35
36
8.8
8.9
8.10
8.11
Suspension of Work
The Engineer may also notify

the cause foe the suspension.
If and to the extent that the
cause is notified and is the
responsibility of the
Contractor
Consequences of
Suspension
The Contractor shall not be

entitled to an extension of
time for, or to payment of
the Cost incurred in, making
good the consequences of
the Contractors faulty
design, workmanship or
materials or of the
Contractors failure to
protect, store or secure in
accordance with Sub-Clause
8.8 [Suspension of Work]
Payment for Plant and

Materials in Event of
Suspension
The Contractor shall be

entitled to payment of the
value
Prolonged Suspension
The suspension under subclause 8.8, the Contractor can

request the Engineers
permission to proceed if the
suspension has continued for
more than 84 days.
Investigation
productive in
project.
Revise scheduling
of project.
Make details
works.
Investigation
productive in
project.
Revise scheduling
of project.
Make details
works.
Investigation
productive in
project.
Revise scheduling
of project.
Make details
works.
Investigation
productive in
project.
Revise scheduling
of project.
Make details
works.
26

S.No.
37
CLAUSE
No.
9.2
CLAUSE
RISK FOR CONTRACTOR
RISK CONTROL
Delayed Tests
There is a risk of failure of the

contractor to carry out the
tests in time or within 21 days
of the notice of the engineer.
If he fails, he has to bear two
consequences:
1. Bear the cost of the test
carried out by someone else
on discretion of the engineer.
2. He has to accept the results
of the test.
The contractor can

control the
delayed test risks
as:
1.
Preparing proper
Testing Schedule.
2. Notifying and
Conducting Tests
at Proper time.
According to the FIDIC,

contractor is liable to
complete outstanding and
remedying defects (Sub-clause
11.1). So, the risk and cost is
to be incurred by the
contractor for the repair and
remedying of the works.
38
11.2
Cost of Remedying
Defects
39
11.3
Extension of Defects
Notification Period
A risk of Employer's Claim.
40
11.4
Failure to Remedy Defects
A risk of Cost claim by the

Employer
Contractor need to
improve its
productivity, so
that the
outstanding works
can be completed
in time as well as
his workmanship
to avoid re-work
of the defects.
Contractor should
carefully see if the
extension is due to
the suspension of
the works by the
employer then the
liability is not on
contractor for the
delay. Contractor
need to correct
the defects within
time and at most
within defect
liability period.
The Contractor
should carry out
the work by
himself and if he
sense he cannot
then he should
subcontract the
work by the
approval of the
27

S.No.
CLAUSE
No.
CLAUSE
RISK FOR CONTRACTOR
RISK CONTROL
Employer to avoid
the claim. (A costefficient option
41
42
43
44
14.11
14.15
15.2
17.1
Application for Final

Payment Certificate
If contractor cannot receive

the final payment certification
because of his lack, takingover date will be delayed. And
in the worst case, the
contractor cannot receive the
performance security.
Currencies of Payment
If the exchange rate

negatively changes, actual
payment become smaller than
contract price
Termination by Employer

conditions, contractor has the
probability of termination of
the contract.
Indemnities
Before the TOC, contractor

has the responsibility of the
property. And they also have
the responsibility of the
damage of staffs.
Contractor must
prepare the
taking-over
procedure, Or if
contractor find
serious
deterioration, as
soon as possible
they have to treat
it before taking
over.
Using bank
consulting,
appropriate
insurance should
be applied.
The contractor
should understand
the clause's
particular
conditions of
termination. And
they must avoid
causing these
conditions. Good
communication
will help to get the
support of
engineer.
The practice of
proper project
management
(safety
management,
construction
management and
28

S.No.
CLAUSE
No.
CLAUSE
RISK FOR CONTRACTOR
RISK CONTROL
so on) will prevent
the property
damage and
human resource
damage.
45
46
47
48
17.2
18.2
19.5
20.6
Contractor's Care of the

Works
From the project's

commencement to TOC,
contractor has the
responsibility of the
damage/loss of works and
goods.
The practice of
proper project
management
(safety
management,
construction
management and
so on) will prevent
the property
damage and
human resource
damage.
Insurance for Works and

Contractor's Equipment
Insurance has the exclusion

statement. If the causing loss
or damage is classified
exclusion, contractor has to
discuss with owner who
should indemnify.
By using particular
condition, how to
indemnify should
be decided in the
contract.
Force Majeure Affecting

Subcontractor
Applying force majeure to

subcontractor, constructor
must take the responsibility of
the damage/loss.
Arbitration
If dispute is judged by
arbitration, contractor must
receive any result. And it
becomes the final result.
If the foretaste is
found, contractor
should make the
decision how to
treat the issue as
soon as possible.
At first, contractor
should mitigate
the predictable
risk in the
contract. And after
contracting,
contractor should
monitor the
project risk. And
once problems
and risks causing,
contractor should
make decision
29

S.No.
CLAUSE
No.
CLAUSE
RISK FOR CONTRACTOR
RISK CONTROL
quickly with
communicating
with owner and
engineer.
4.0 FIDIC Timeline:

Kindly refer to the Attached diagram on the proceeding page.
5.0 Claim, Suspension and Termination by the Contractor:
This portion of the document elaborates the clauses of FIDIC that can favor the
contractor to put claim, or to suspend or terminate the contract because of the action or lack of
action of the employer. The employer is in sensitive condition in these clauses and he needs to
consider these carefully. The clauses are:
30
CLAIM, SUSPENSION AND TERMINATION

CONTRACTOR
S.No.
CLAUSE
No.
CLAUSE
CONSEQUENCES BEAR BY CONTRACTOR
WHAT NEED TO BE DONE BY PROJECT

OWNER
Delayed
drawings or
Instructions
Claim by a contractor. The contractor

should give notice to engineer if works
likely to be delayed if any necessary
drawings and instructions get delayed.
Its because of the failure of engineer to
provide notified drawings. So,
contractor will claim for extension of
time plus additional amount of
contractor will claim for extension of
time plus additional amount of
reasonable profit.Subclause-20.1
After receiving the notice, these matters

should be determined and agreed.
Right of
access to site
Claim by contractor The employer shall

give right of access to the site to
contractor to proceed in accordance
with the programme. But if contractor
suffer or incurs cost, then contractor will
claim for EOT plus additional amount of
reasonable profit.
After receiving the notice, it must be

preceded in accordance with Sub clause
(determination) to agree or to determine
these matters.
4.7
Setting out
Claim by contractor for the extension of

time for any kind of delay plus
additional amount of reasonable profit
that one should be included in the
contract price.
After receiving this notice, it should be

preceded in accordance with sub clause
(determination) to agree or to determine
these matters.
4.12
Unforeseeable
physical
conditions
Claim by contractor after the contractor

encounters adverse physical conditions,
obstructions etc. Claim is for EOT plus
additional payment.
The engineer shall set out the reasons

why the contractor considers it as
unfired seeable.
Claim for additional pay mint
Error in design may entitle

Contractor to claim time/money
Extension of time (EOT) available
for a variation, delay or impediment
of the Employer, exceptionally, adverse
weather conditions, shortages of goods
or personnel.
On a project-financed deal, the
Employer and Funder/Sponsor usually
require the deletion of these EOT rights.
1.9
2.1
8.4
Extension of
Time for
Completion
31

CONTRACTOR
S.No.
CLAUSE
No.
CLAUSE
8.5
Delay Caused
by Authorities
8.8
Suspension of
Work
Claim for extension of time
Claim for additional payment

OWNER
Extension of time (EOT) available for
a variation, delay or impediment of
the Employer, exceptionally, adverse
weather conditions, shortages of goods
or personnel.
If the contractor suffers delay and /or
incurs Cost from complying with the
Engineers instructions under sub-Clause
8.8[Suspension of Work] and/or from
resuming the work, The Contractor hall
give notice to the Engineer and shall be
entitled subject to Sub-Clause 20.1
[Contractors Claims] to:
(a) An extension of time for any such
delay, if completion is or will be delayed.
Under sub-clause 8.4 [Extension of Time
for Completion], and
(b) Payment of any such Cost which shall
be included in the Contract Price.
10
8.9
Consequences
Claim for additional payment
of Suspension
8.10
Payment for
Plant and
Materials in
Event of
Suspension
10.2
Taking Over of
Parts of the
Works
If the Contractor suffers delay and/or

incurs Cost from complying with the
Engineers instructions under Sub-Clause
8.8[Suspension of wok] and h/or from
resuming the work, the Contractor shall
give notice to the Engineer and shall be
entitled subject to Sub-Clause 20.1
[Contractors Claims] to claim for time
extension and payment of any such Cost.
Claim for extension of time and

additional payment
The Contractor shall be entitled to

payment of the value (as at the date of
suspension) of Plant and/or Materials
which have not been delivered to site.
There is a possibility that, after taking

over, the contractor may bear extra cost
in completing the works due to the
partial use of the facility by the
employer.
The employer should be much careful in

using the partially completed facility as
this might pose a claim against him. If no
other option, then taking over should be
much specified and employer need to be
careful that it might not interfere with
the on-going contractor works.
32

CONTRACTOR
S.No.
11
12
13
14
15
CLAUSE
No.
10.8
11.8
12.4
13.2
13.7
CLAUSE

OWNER
Interference
with Tests on
Completion
It is obvious that the contractor has a

tight schedule and any delay in the
works by the actions of the employer
will lead in extra cost borne by the
contractor and ultimately claims from
the Employer.
The employer should be in proper

communication with the engineer and
contractor to inform his availability on
the test on completion date, to avoid
Contractor claims.
Contractor to
Search
Any job requested to the contractor

beyond the scope of the contract shall
be claimed by the contractor as he
incurs extra cost for that.
It is duty of the contractor to remedy the

defects (Sub-clause 11.3) in defects
notification period. The engineer should
be competent in the preliminary and
final inspection to highlight the defects
before taking over certificate.
Omissions
The omissions are considered as

variations in the tender. The contractor
will claim the cost he incurs as a result
of the omission beside his profit.
The employer should try to make the

scope of the project very clear and fidic
contract clauses (General condition)
should be further refined according to
the project situation in the particular
conditions to avoid any major omission
that can result in potential claim by the
employer.
Value
Engineering
This clause refers to the proposal of the

efficient design or construction by the
contractor in the benefit of the
employer. As the contractor is working
for the cost efficiency of the project at
his own cost so, if the proposal results in
cost saving then contractor should be
given benefit of the saving.
The employer should encourage the

value engineering aspect of the
contractor, but the proposal should be
carefully analyzed before approval to
avoid future dispute.
Adjustments
for Changes in
Legislation
The change in the government rules and

regulation can affect the contractor
directly (change in construction laws) or
indirectly (material price change). Such
changes will affect the cash flow n
performance of the contractor.
To avoid such claims, the employer

should mention a range in the particular
conditions for keeping him flexible of
price escalations. If the escalations go
beyond that, he should compensate the
contractor for the increased risk.
33

CONTRACTOR
S.No.
16
17
18
19
20
21
22
CLAUSE
No.
14.8
16.1
16.4
CLAUSE

OWNER
Delayed
Payment
Delay in the payment clearly hinders the

contractor from performance of his
work and he will be entitle to claim the
financing charges (interest) on the loans
he took from bank to maintain his cash
flow to execute the project.
The employer should decide a practical

payment plan in the contract agreed by
both the parties and abide by that during
the execution of the project.
Lack of the engineer's issuing

certifications or others which are
allowed as engineer's right to ask
engineer in the contract causes the
contractor's claim (EOT, additional
payment).
Owner and engineer should response

the contractual contractor's request
properly.
If termination of contract happens,

owner has to pay contractor's finished
work. Contractor will claim the
maximum amount of payment by
according to the contract.
Owner has to decide this condition

carefully with the consideration of
predictable termination cases.
Contractor's
Entitlement to
Suspend Work
Payment on
Termination
If contractor's personnel receive the

damage or loss by thee employer,
contractor becomes to be entitle to
claim indemnity.
Delay of response against the
contractor's request coming from clause
"employer's risk" causes EOT
Owner should manage his/her personnel

to prevent causing those issues.
17.1
Indemnities
17.4
Consequences
of Employer's
Risks
17.5
Intellectual
and Industrial
Property
Rights
If engineer doesn't give notice against

contractor's claim within 28 days,
contractor becomes to get the right to
take any goods and work in the site. And
no notice finally causes
ambition/litigation.
Proper response to the contractor's

claim and request is necessary.
Additionally, if there is important
goods/works in site, owner should
protect this property by using particular
condition.
18.1
General
Requirements
for Insurances
If owner/owner's personnel/engineer
don't follow insurance policy and cause
damage/loss, contractor can claim
owner to indemnify them.
Owner side should understand and keep

the insurance policy.
Owner and engineer should response

the contractual contractor's request
properly.
34

CONTRACTOR
S.No.
23
24
25
26
CLAUSE
No.
CLAUSE
19.4
Consequences
of Force
Majeure
If the external force causes the

damage/loss, contractor will try to apply
this clause as much as possible to claim
the indemnity.
19.6
Optional
Termination,
Payment and
Release

owner has to pay contractor's finished
work. Contractor will claim the
maximum amount of payment by
according to the contract.
Owner has to decide this condition

carefully with the consideration of
predictable termination cases.
Additionally, owner should exclude
predictable issue from force majeure.
19.7
Release from
Performance
under the Law
When owner applies this clause to

adjust the payment appropriately,
contractor will claim and try to secure
their benefit.
Engineer should estimate the

performance by confirming contractor's
submissions and existing property. And
engineer must make accurate
estimation.
According to this condition, contractor

becomes to be entitled to claim.
Engineer has to inform these condition

to owner correctly to prevent future
owner's misunderstanding. And owner's
understanding will help project
controlling to avoid contractor's claim.
20.1
Contractor's
Claims

OWNER
To making contract, owner should
review the condition of clause. And if
there are predictable issues (for
example: flood in Thailand), using
particular condition, owner should
mitigate these risk.
5.0 Claim, Suspension and Termination by the Contractor:

This portion of the document elaborates the clauses of FIDIC that can favor the employer
to put claim against the contractor (multiple reasons), or to suspend or terminate the contract
because of the non-performance of the contractor. The contractor is in sensitive condition in
these clauses and he needs to consider these carefully. The clauses are:

OWNER
35
S.No.
CLAUSE
No.
2.5
3.5
4.2
CLAUSE
Employer's
claims
Determination
Performance
security
CONSEQUENCES BEAR BY OWNER
WHAT NEED TO BE DONE BY

PROJECT CONTRACTOR
If the employer considers himself

to be entitled to any payment
under any of the conditions or
connected with the contract or any The amount may be included in the
extension of defect notification
contract price and price certificates.
period, then employer should give
notice and particulars to the
contractors.
If the agreement end
inconclusively, then the engineer
must give notice to both parties of
determination and each party shall
give the determination and unless
and until revised under clause20
(Claims, disputes and
arbitration).This determination is
binding unless revised by DAB
procedure.
The employers will not make a
claim under the performance
security, except for amount to
which the employer is entitled
under the contract if failure by the
contractor to extend validity of
performance security and the
failure by the contractor to pay the
performance security and the
failure by the contractor to pay the
employer an amount due, or the
circumstances which entitle the
employer to termination under
sub clause15.2(termination by
employer) i.e. mistake by
contractor occurs then employer
will take the bond after
termination of contract.
4.19
Electricity,
Water and Gas
Claim for damage
4.20
Employers
Equipment and
Free Issue
Material
Claim for damage
Contractor need to follow clause

20.1if he considers himself entitled
for the additional payment and time.
Contractor should deliver the

performance security to the
employer within 28 days after
receiving the letter of acceptance.
The Contractor shall, at his risk

and cost, provide any apparatus
necessary for his use of these
services and for measuring the
quantities consumed.
The Contractor shall be responsible
for each item of Employer's
Equipment whilst any of the
Contractor's Personnel is operating
it, driving it, directing it or in
36

OWNER
S.No.
CLAUSE
No.
CLAUSE
Each subcontract should include

provisions that would entitle
employer to require the
subcontract to be assigned to the
employer under sub clause 4.5 or
in the event of termination under
sub clause 15.2(termination of
employer).
4.4
Subcontractors
6.9
Contractors
Personnel
7.3
Inspection
Claim for damage , re-do of works
7.4
Testing
Claim for damage , re-do of works
10
7.5
Rejection
Claim for damage
11
7.6
Remedial Work
Claim for damage
claim for change the personnel

PROJECT CONTRACTOR
possession or control of it
The contractor and the

subcontractor should transfer their
benefit to the owner.
If appropriate, the Contractor shall

then appoint (or cause to be
appointed) a suitable replacement
person.
If the Contractor fails to give the
notice, he shall if and when
required by the Engineer, uncover
the work and thereafter reinstate
and make good, all at the
Contractor's cost.
The cost of carrying out this
Variation shall be borne by the
Contractor, notwithstanding other
provisions of the Contract.
If the Engineer requires this Plant,
Materials or workmanship to be
retested, the tests shall be
repeated under the same terms
and condition. If .the rejection and
retesting cause the Employer to
incur additional costs, the
Contractor shall subject to SubClause 2.5 [Employer's Claims] pay
these costs to the Employer.
The Contractor shall comply with the
instruction within a reasonable time,
which shall be the time (if any)
specified in the instruction, or
immediately if urgency is specified
under subparagraph (c).
37

OWNER
CLAUSE
No.
CLAUSE
13
8.6
Rate of Progress
Claim for damage
14
8.8
Suspension of
Work
Claim for damage
15
8.9
S.No.
12
16
17
8.10
9.4
Consequences of
Claim for damage
Suspension
Payment for
Plant and
Materials in
Event of
Suspension
Failure to Pass
Tests on
Completion

PROJECT CONTRACTOR
Retention amount and performance
bond to be used for the test
otherwise, the Contractor shall
adopt these revised methods,
which may require increases in the
working hours and/or in the
numbers of Contractors Personnel
and/or Goods, at the risk and cost of
the Contractor
otherwise, the Contractor shall
adopt these revised methods,
which may require increases in the
working hours and/or in the
numbers of Contractors Personnel
and/or Goods, at the risk and cost of
the Contractor
The Contractor shall not be
entitled to an extension of time
for, or to payment of the Cost
incurred in, making good the
consequences of the Contractors
faulty design, workmanship or
materials or of the Contractors
failure to protect, store or secure
in accordance with Sub-Clause 8.8
[Suspension of Work]
Claim for damage
The Contractor shall be entitled to

payment of the value
Failing to pass the tests can have

critical consequences if the
employer needs to put the facility
in operation. Before
commissioning, he could not do
that and it might affect his plan of
bringing facility in service. Or if the
test fails and owner has to accept
the reduced value facility.
The contractor needs to clearly

understand the project
specifications and work with
acceptable quality in order to
prevent himself from the risk and
claim of failure of facility at test.
38

OWNER
S.No.
18
19
20
21
22
23
24
CLAUSE
No.
Failure to
Remedy Defects
Failure of the contractor to repair

the defect will result in the hiring
of another contractor by the
employer for remedying the
defects. This will incur extra cost
which employer will claim from
the contractor.

PROJECT CONTRACTOR
The contractor should do the work
correct in first the first time. And for
specialized works, he should
subcontract to a competent subcontractor to avoid defects in
specialized works that are complex
to rectify.
Termination by
Employer
There is the probability of addition

of particular condition about this
clause for mitigate owner's risk.
And owner will terminate the
contract in particular condition.
Contractor should confirm the all

conditions of termination. And if
there is unfair condition, contractor
has to negotiate the correction of
condition.
Valuation at
Date of
Termination
If termination is applied, engineer

start to estimate the contractors
achieving works, property and
delay from master schedule. And it
strongly affects payment after
termination.
Contractor manages the project

properly. And they have to eliminate
the difference b/w actual progress
and reporting progress.
Payment after
Termination
Using this clause, owner decides

the payment for the work after
termination. Therefore, if there is
particular condition which cancels
owner's payment after
termination, contractor has to
cover the site recovery cost.
Contractor had to confirm whether

particular condition mitigate owner's
payment.
17.1
Indemnities
If owner's personnel receive the

damage or loss by the contractor
side, owner becomes to be
entitled to claim indemnity.
Contractor should manage his/her

personnel to prevent causing those
issues.
17.5
Intellectual and
Industrial
Property Rights
Delay of response against the

owner's/engineers request
coming from clause "owner's risk"
causes litigation/arbitration in the
worst case.
Contractor should response the

contractual contractor's request
properly.
18.1
General
Requirements
for Insurances
If contractor doesn't use

appropriate insurance, it will cause
the owner's/engineer's claim. And
if the case is serious, owner will
use termination of contract.
Contractor should understand the

condition of insurance correctly. And
they must get correct type of
insurance.
11.4
15.2
15.3
15.4
CLAUSE
39

OWNER
S.No.
25
26
27
CLAUSE
No.
CLAUSE

PROJECT CONTRACTOR
18.2
Insurance for
Works and
Contractor's
Equipment
If contractor doesn't use

appropriate insurance, it will cause
the owner's/engineer's claim. And
if the case is serious, owner will
use termination of contract.
Contractor should understand the

condition of insurance correctly. And
they must get correct type of
insurance.
19.6
Optional
Termination,
Payment and
Release

owner has to pay contractor's
finished work. So owner will claim
the minimum amount of payment
by according to the contract.
19.7
Release from
Performance
under the Law
When owner applies this clause to

adjust the payment, owner will try
to minimize the payment.
Contractor has to decide this

condition carefully with the
consideration of predictable
termination cases.
Additionally, contractor should
negotiate the clause's condition to
remove serious risk.
Contractor should confirm
engineers estimation. And if they
find underestimation of payment,
contractor should claim correct price
with evidence.
6.0 Clauses that can allow contractor to demand EOT/Additional

Payment:
EOT / ADDITIONAL PAYMENT
S.No.
CLAUSE No.
CLAUSE
1.9
Delayed drawings or Instructions
2.1
Right of Access to the Site
4.7
Setting out
4.12
Unforeseeable Physical Conditions
8.4
Extension of Time for Completion
8.5
Delay Caused by Authorities
10.2
Taking Over of Parts of the Works
40
EOT / ADDITIONAL PAYMENT

S.No.
CLAUSE No.
CLAUSE
10.3
Interference with Tests on Completion
11.8
Contractor to Search
10
12.4
Omissions
11
13.2
Value Engineering
12
13.7
Adjustments for Changes in Legislation
13
14.8
Delayed Payment
14
19.4
Consequences of Force Majeure
15
19.6
Optional Termination, Payment and

Release
16
20.1
Contractor's Claims
7.0 Conclusion:
This report has been developed by a profound study of the FIDIC general conditions of
contract (1999 Edition). By study of the document we go to know that, FIDIC unequivocally
elaborates the project risks considering multiple practical scenarios and assumptions. One
interesting thing worth mentioning here is that though the contract conditions clearly highlight
project risks with respect to the employer and the contractor perspectives. But the clauses that
pose the risk on the contractor are much more than those of the contractor. So, Contractor needs
to much careful while working in the FIDIC Arrangement.
41
Appendix I
Project Risks Management
No
1
2
3
4
5
6
7
10
11
1
1
12
13
14
Claim, Suspension&
Termination
EOT/Additional
Payment
Title
Time
1
1
1
1
1
1
1
1
Project Risks
Cost
Quality
Safety
Owner
Contractor
Contractor
Owner
GENERAL PROVISION
2
2
Definitions
Interpretation
Communications
Law and Language
Priority if Documents
Contract Agreement
Assignment
Care and Supply of
Documents
Delayed Drawings or
Instructions
Employer's Use of
Contractor's
Documents
Contractor's Use of
Employer's Documents
Confidential Details
Compliance with Laws
Joint and Several
Liability
THE EMPLOYER
Right of Access to the
Site
Permits, Licences or
Approvals
Employer's Personnel
Employer's Financial
Arrangements
Employer's Claims
42
No
3
4
4
4
4
4
4
6
7
8
9
10
11
12
13
14
Claim, Suspension&
Termination
EOT/Additional
Payment
Title
Time
Project Risks
Cost
Quality
Safety
Owner
Contractor
Contractor
Owner
THE ENGINEER
Engineer's Duties and
Authority
Delegation by the
Engineer
Instructions of the
Engineer
Replacement of the
Engineer
Deteminations
THE CONTRACTOR
Contractor's General
Obligations
Performance Security
Contractor's
Representative
Subcontractors
Assignment of Benefit
of Subcontract
Co-operation
Setting Out
Safety Procedures
Quality Assurance
Site Data
Sufficiency of the
Accepted Contract
Amount
Unforeseeable Physical
Conditions
Rights of Way and
Facilities
Avoidance of
Interference
43
No
4
4
15 Access Route
16 Transport of Goods
17
18
19
20
4
4
21
22
23
24
5
6
Claim, Suspension&
Termination
EOT/Additional
Payment
Title
Time
Project Risks
Cost
Quality
Safety
Owner
Contractor
Contractor
Owner
Contractor's
Equipment
Protection of the
Environment
Electricity, Water and
Gas
Employer's Equipment
and Free-Issue
Material
Progress Reports
Security of the site
Contractor's
Operations on Site
Fossils
NOMINATED
SUBCONTRACTORS
Definition of
"nominated
Subcontractor"
Objection to
Nomination
Payments to
nominated
Subcontractors
Evidence of Payments
STAFF AND LABOUR
Engagement of Staff
and Labour
Rates of Wages and
Conditions of Labour
Persons in the Service
of Employer
44
No
6
6
4 Labour Laws
5 Working Hours
10
11
7
7
7
7
7
7
1
2
3
4
5
6
8
8
8
8
2
3
Claim, Suspension&
Termination
EOT/Additional
Payment
Title
Time
Project Risks
Cost
Quality
Safety
Owner
Contractor
Contractor
Owner
Facilities for Staff and

Labour
Health and Safety
Contractor's
Superintendence
Contractor's Personnel
Records of Contractor's
Personnel and
Equipment
Disorderly Conduct
PLANT, MATERIALS
AND WORKMANSHIP
Manner of Execution
Samples
Inspection
Testing
Rejection
Remedial Work
Ownership of Plant and
Materials
Royalties
COMMENCEMENT,
DELAYS AND
SUSPENSION
Commencement of
Work
Time for Completion
Programme
Extension of Time for
Completion
Delays Caused by
45
No
6
7
8
10
8
8
11
12
9
9
9
9
2
3
10
10
10
10
10
11
11
Claim, Suspension&
Termination
EOT/Additional
Payment
Title
Time
8
8
8
Project Risks
Cost
Quality
Safety
Owner
Contractor
Contractor
Owner
Authorities
Rate of Progress
Delay Damages
Suspension of Work
Consequences of
Suspension
Payment for Plant and
Materials in Event of
Suspension
Prolonged Suspension
Resumption of Work
TESTS ON
COMPLETION
Contractor's
Obligations
Delayed Tests
Retesting
Failure to Pass Tests on
Completion
EMPLOYER'S TAKING
OVER
Taking Over of the
Works and Sections
Taking Over of Parts of
the Works
Interference with Tests
on Completion
Surfaces Requiring
Reinstatement
DEFECTS LIABILITY
Completion of
Outstanding Work and
Remedying Defects
46
No
11
11
11
11
11
11
6
7
8
11
11
11
10
11
12
12
12
12
12
3
4
13
13
13
13
1
2
3
13
13
13
5
6
13
Claim, Suspension&
Termination
EOT/Additional
Payment
Title
Time
11
Project Risks
Cost
Quality
Safety
Owner
Contractor
Contractor
Owner
Cost of Remedying
Defects
Extension of Defects
Notification Period
Failure to Remedy
Defects
Removal of Defective
Work
Further Tests
Right to Access
Contractor to Search
Performance
Certificate
Unfulfilled Obligations
Clearance of Site
MEASUREMENT AND
EVALUATION
Works to be Measured
Method of
Measurement
Evaluation
Omissions
VARIATIONS AND
ADJUSTMENTS
Right to Vary
Value Engineering
Variation Procedure
Payment in Applicable
Currencies
Provisional Sums
Daywork
Adjustments for
Changes in Legislation
47
No
14
14
14
1
2
14
14
14
14
14
14
7
8
14
14
10
14
11
14
12
14
13
14
14
14
15
15
15
15
15
Claim, Suspension&
Termination
EOT/Additional
Payment
Title
Time
13
Project Risks
Cost
Quality
Safety
Owner
Contractor
Contractor
Owner
Adjustments for
Changes in Cost
CONTRACT PRICE AND
PAYMENT
The Contract Price
Advance Payment
Application for Interim
Payment Certificates
Schedule of Payment
Plant and Materials
intended for the Works
Issue of Interim
Payment Certificates
Payment
Delayed Payment
Payment of Retention
Money
Statement at
Completion
Application for Final
Certificate
Discharge
Issue of Final Payment
Certificate
Cessation of
Employer's Liability
Currencies of Payment
TERMINATION BY
EMPLOYER
Notice to Correct
Termination by
Employer
Valuation at Date of
Termination
48
No
15
16
16
16
16
16
17
17
17
17
17
17
17
18
18
18
Claim, Suspension&
Termination
EOT/Additional
Payment
Title
Time
15
Project Risks
Cost
Quality
Safety
Owner
Contractor
Contractor
Owner
Payment after
Termination
Employer's Entitlement
to Termination
SUSPENSION AND
TERMINATION BY
CONTRACTOR
Contractor's
Entitlement to Suspend
Work
Termination by
Contractor
Cessation of Work and
Removal of
Contractor's
Equipment
Payment on
Termination
RISK AND
RESPONSIBILITY
Indemnities
Contractor's Care of
the Works
Employer's Risks
Consequences of
Employer's Risks
Intellectual and
Industrial Property
Rights
Limitation of Liability
INSURANCE
General Requirements
for Insurances
Insurance for Works
49
No
18
19
19
19
19
19
19
19
19
20
20
20
20
20
Claim, Suspension&
Termination
EOT/Additional
Payment
Title
Time
18
Project Risks
Cost
Quality
Safety
Owner
Contractor
Contractor
Owner
and Contractor's
Equipment
Insurance against
Injury to Persons and
Damage to Property
Insurance for
Contractor's Personnel
FORCE MAJEURE
Defenition of Force
Majeure
Notice of Force
Majeure
Duty to Minimise Delay
Consequences of Force
Majeure
Force Majeure
Affecting
Subcontractor
Optional Termination,
Payment and Release
Release from
Performance under the
Law
CLAIMS, DISPUTES AND
ARBITATION
Contractor's Claims
Appointment of the
Dispute Adjudication
Board
Failure to Agree
Board
Obtaining Dispute
Adjudication Board's
50
No
5
6
20
20
Claim, Suspension&
Termination
EOT/Additional
Payment
Title
Time
20
20
Project Risks
Cost
Quality
Safety
Owner
Contractor
Contractor
Owner
Decision
Amicable Settlement
Arbitation
Failure to Comply with
Board's Decision
Expiry of Dispute
Adjudication Board's
Appointment
51

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ANALYSIS OF THE FIDIC CONDITIONS OF CONTRACT (RED BOOK) 1999 EDITION

ANALYSIS OF THE FIDIC CONDITIONS OF CONTRACT (RED BOOK)

LEGAL & CONTRATUAL RISK MANAGEMNT

ANALYSIS OF THE FIDIC CONDITIONS OF CONTRACT (RED BOOK) 1999 EDITION

1.0 Introduction: .............................................................................................................................. 1

ANALYSIS OF THE FIDIC CONDITIONS OF CONTRACT (RED BOOK) 1999 EDITION

2.0 Management of the project risks by FIDIC:

MANAGEMENT OF PROJECT RISK BY FIDIC

S.No. CLAUSE No.

Most of the terms defined are related with time for

It should be mentioned very clearly in the contract

ANALYSIS OF THE FIDIC CONDITIONS OF CONTRACT (RED BOOK) 1999 EDITION

MANAGEMENT OF PROJECT RISK BY FIDIC

S.No. CLAUSE No.

For the approvals, certificates not to be delayed,

Law and language

The language for communications shall be that stated

The documents should be in proper sequence i.e. The

The parties should go for contract agreement within

The contractor should give notice to the engineer for

And payment of any cost plus reasonable profit.

The contractor should be provided reasonable

For variation that has been made, then the engineer

Is binding, unless it is revised by DAB procedure.

ANALYSIS OF THE FIDIC CONDITIONS OF CONTRACT (RED BOOK) 1999 EDITION

MANAGEMENT OF PROJECT RISK BY FIDIC

S.No. CLAUSE No.

Including sub-surface conditions, hydrological

The contractor should prepare material delivery

For the mobilization of the equipment, the contractor

Any substandard material supplied for the work and

The artifacts should be removed by the owner

ANALYSIS OF THE FIDIC CONDITIONS OF CONTRACT (RED BOOK) 1999 EDITION

MANAGEMENT OF PROJECT RISK BY FIDIC

S.No. CLAUSE No.

Based on the specification of the designed project,

Contractor should review testing method and

The Engineers duty amongst others is to ensure the

There should be good relationship between the

The owner in agreement with his Project Engineer on

Contractor should ask for time extension before the

Any Circumstances that could lead to extension of

ANALYSIS OF THE FIDIC CONDITIONS OF CONTRACT (RED BOOK) 1999 EDITION

MANAGEMENT OF PROJECT RISK BY FIDIC

S.No. CLAUSE No.

Variation in design may cause extension of time if

Where there is friction, the work can suffer a setback

The owner as much as possible should avoid a

The project owner being conscious of the

Payment for Plant

The payment issue is sensitive and therefore the

ANALYSIS OF THE FIDIC CONDITIONS OF CONTRACT (RED BOOK) 1999 EDITION

MANAGEMENT OF PROJECT RISK BY FIDIC

S.No. CLAUSE No.

The project owner, with a good understanding can

Taking Over of the

Taking over by the employer is a critical phase as

2.2 Project Cost:

MANAGEMENT OF PROJECT RISK BY FIDIC

Either party may, as security in favor of a bank or

ANALYSIS OF THE FIDIC CONDITIONS OF CONTRACT (RED BOOK) 1999 EDITION

MANAGEMENT OF PROJECT RISK BY FIDIC

The contractor should give the notice regarding all

Joint and Several