FIDIC Contracts Masterclass: Practical Guide to the 2017 Suite.

FEDICContract
Conditions Submitted By:
1. Jaspreet Singh
2. Himanshu Sharma
3. Ram Naresh
4. Jagat Singh
SubmittedTo:
Dr.Tapash Kumar Ganguli

Introduction
 FIDIC contracts, short for Federation Internationale
des Ingenieurs-Conseil (International Federation of
Consulting Engineers) are standardized contracts used
in the construction industry. These contracts provide a
consistent framework for the regulation of
construction contracts and aim to ensure fair and
equitable treatment for all parties involved. The most
widely used FIDIC contract are the Red Book (building
and engineering works designed by the Employer) and
the Yellow Book (M&E, building and engineering works
designed by the Contractor.

WhyUse
FIDIC
Contracts?
 The key ingredient for their success as industry standard lies in their balanced
approach to the roles and responsibilities of the main parties, as well as the allocation
and management of risk.
 For this reason, the fundamental principle behind the FIDIC contracts is the use of
General Conditions of Contract, deemed to be suitable in all cases, based on thousands
of successful projects around the world.
 All FIDIC contracts therefore contain guidance on the preparation of Particular
Conditions, and provide examples of the areas where special provisions may be
required for a specific project. To diverge significantly from these guidelines is to
increase the risk of shifting the balanced nature of the contract, and putting into
jeopardy the successful implementation of the project.
 Experience in different countries and with different kinds of client, suggests that
changing or upsetting the balance of risk-sharing in FIDIC contracts typically results in
higher tender prices; delays to completion; additional time and cost claims; and, in the
worst cases, major protracted disputes leading to arbitration, and sometimes to
contract termination.

Advantagesof
FIDIC
 International standard
 FIDIC is a true international standard. Therefore, the FIDIC Model
Contracts are familiar to contractors throughout the world and are
widely accepted.
 Focus on Projects
 To execute a new contract, the parties have to start from the base,
which needs a lot of time starting from appointing lawyers until the
contract is executed. By using the FIDIC Model Contracts, the parties
can focus directly on the project and can manage the risk efficiently.
 Price competition
 Most contractors worldwide use the FIDIC Model Contracts as it
allows increased bid lists and encourages more price competition
amongst tenderers. Therefore, ultimately it provides value for
money.

Advantagesof
FIDIC
 Lower bid time and cost
 The FIDIC Model Contracts are ready to use drafts, which will
expedite the discussion and negotiations on the terms and
conditions of the contract. The contractors do not have to engage
the specialist, which will result in less cost and a shorter time.
 Various types of Contracts
 As informed above, the FIDIC Model Contracts are divided into
different colour books and the parties can choose the contracts as
per various features like kind of construction, size & nature of the
project, purpose of the contract and identity of the parties. The
parties can choose the right book for a certain type of project which
will cover different terms and conditions specific to the project.
 Practical clauses
 The FIDIC Model Contracts are already intended for use on major
projects thus practical clauses like the scope of work, rights and
obligations, liabilities of the parties are covered.

Advantagesof
FIDIC
 Multiple languages
 The FIDIC Model Contracts are published in up to 20 different
languages including major languages like Chinese, Japanese,
Indonesian, French and Spanish. This means lower translation cost
where the contracts need translation into the foreign language of
the other party.
 Bankability
 Most of the international banks including Multilateral Development
Banks are using the FIDIC Model Contracts, which eases obtaining
approval from the bank for the contracts.
 Less Risk of Disputes
 The FIDIC guide, other FIDIC publications and published papers
provide a broad explanation of the FIDIC Model Contracts and the
particular provision of each clause. This means there is less
disagreement and less risk of disputes between the parties.

Advantagesof
FIDIC
 Neutral Contracts
 Another advantage of the FIDIC Model Contracts is that it is fair and
neutral. It balances the obligations and duties of the parties, as they
are not drafted in favour of one party and protects the interest of
both parties.
 Success Ratio
 Since the FIDIC Model Contracts are accepted worldwide and are
easier to use, the parties will be more confident as these contracts
can impact significantly on the efficiency and success of the
projects.

FIDIC contracts
do provide
guidance
on project
specific sub-
clauses where
Particular
Conditions
might be used.
1. The role and authority of the Engineer
(where applicable, otherwise the
Employer’s Representative):
2. Oversight and/or inspection of theWorks
3. Issues of Certificates
4. Valuation ofVariations
5. Assessment, response to and
determination of time/money claims
6. Monitoring of the Contractor’s
programme
7. If the Engineer is unduly constrained so
that he cannot exercise independent
professional judgement, then problems
with successful contract management,
dispute avoidance and timely completion
can be confidently anticipated!
8. Liability for errors in the
Drawings/Technical Specifications or
Employer’s Requirements
9. Liability for proving access to and on the
Site.
10.Liability for obtaining permits and
approvals.
11. Liability for unforeseeable physical
conditions.
12.Labour conditions.
13. Delays caused by authorities.
14.Defects liability, including latent defects.
15. Procedures for dispute
settlement/resolution.
 Ref: https://fidic.org/

Customization
 As we know, every project is different and customization is necessary for
every project. To implement modifications in the contract, they tend to
shift commercial terms to the schedules of the contract. Moreover, it
becomes an exhausting experience as all technical and legal details are
put together in the schedules of the contract.

FIDIC in India
 The FIDIC Model Contracts are used all over the world including
the Government of India for executing projects. Consulting
Engineers Association of India (CEAI) is the apex body of
consulting engineers in India. CEAI is the only Member Association
from India representing the Indian Engineering Consultancy
profession at the FIDIC.
 In India, in recent times, international competitive bidding has
become a model in infrastructure projects. Some of these projects
include the mega power projects, railways, telecommunications,
airports, highways, ports, etc.

Which FIDIC
contract
should I use?

The table gives
a brief
overviewof
FIDIC contracts
FIDIC Contract Type Details
Red Book
Conditions of contract for construction for
building and engineering works.
This is for the very common job works,
designed mainly by the employer.
Yellow Book
Conditions of contract for plant and design-
build for electrical and mechanical plant
and building and engineering works.
The contractor is responsible for the plant
design, building and engineering works. Yet
still, the employer might be required to
carry some design.
Green Book
Conditions of contract for use on
engineering and building works of relatively
small capital value or where the
construction time is short.
This is the short form of the contract. It is
used mostly for simple, repetitive, short-
duration jobs.
Pink Book
Conditions of contracts for use of building
and engineering works designed by the
employer.
The projects funded by certain MDBs, which
are supranational institutions such as the
World Bank.
Silver Book
Conditions of contract for EPC/Turnkey
Projects.
The contractor carries the engineering,
procurement and constructions tasks up to
the final delivery of a fully equipped, tested
and ready to run facility.
Gold Book
Conditions of contract for design, build and
operation project.
It implies a long-term commitment of the
contractor and offers a new and unique
procurement route.
Blue Book
Form of contract for dredging and
reclamation works.
The only standard international form of
contract designed specifically for the
dredging industry.
White Book
FIDIC Client/consultant model service
agreement.
The White Book is an important part of
the FIDIC suite and is one of the most
widely used forms of professional services
contract internationally.

FIDIC has long been
renowned for its
standard forms of
contract for use
between employers
and contractors on
international
construction
projects, in
particular:
 Conditions of Contract for Works of Civil Engineering Construction:
The Red Book (1987)
 Conditions of Contract for Electrical and Mechanical Works
including Erection on Site:TheYellow Book (1987)
 Conditions of Contract for Design-Build and Turnkey: The Orange
Book (1995)
 During its past work in updating the Red and Yellow Books, FIDIC
has noted that certain projects have fallen outside the scope of
the existing Books. Accordingly FIDIC has not only updated the
standard forms but has expanded the range, and has - in
September 1999 - published a suite of four new Standard Forms of
Contract which are suitable for the great majority of construction
and plant installation projects around the world.

The Red Book
 Is the Employer (or the Engineer) going to do most of the design?
As in traditional projects, e.g., infrastructure, buildings, hydropower,
etc., the Employer did nearly all the design (perhaps not construction
details, reinforcement, etc.) (The Red Book),2017 Latest Revision 2nd
 And the Engineer administered the Contract, monitored the
construction work and certified payment
 And the Employer was kept fully informed, could make variations,
etc.
 And with payment according to bills of quantities or lump sums for
approved work done.
 If this is what is wanted - choose the Conditions of Contract for
Construction for Building and Engineering Works Designed by the
Employer (The Construction Contract), which effectively updates and
supersedes the existing Red Book from 1987.
In 2005, FIDIC licenced the Multilateral Development Banks (MDB) to
use the MDB Harmonised Edition of the Construction Contract for
projects funded by the banks. The MDB Construction Contract mainly
incorporates Particular Conditions to the Red Book that was used by
the World Bank in its Standard Bidding Documents before it and the
other MDBs adopted the Harmonised Edition.

Typical
Sequence of
PrincipalEvents
DuringContracts
forConstruction

Typical
Sequence of
Payment Events
Envisaged in
Clause 14

Typical
Sequence of
Dispute Events
Envisaged in
Clause 21

Salient
Feature of
HORC Project
S.no Description Summary
1. Name of Work
Fabrication, assembly & launching of 1x76.2m span open web Girder (OWG) EACH OVER
THREE LINES of NH-352 W(Pataudi Road) between Manesar and Patli stations including
supplying & fixing of H-Beam sleepers in connection with laying of New BG Double
Railway Line of HORC Project at km. 54.498.
2. LetterOfAcceptance
HORC/HRIDC/Br-1/2022/TC Dated 25.05.2022 (Return the same signed copy within 7
days of the receipt of the LOA )
3.
Signing of Contract
Agreement
HORC/HRIDC/Br-1/2022, dated-29.06.2022
4
Commencement of
Works
GC-HORC-Br-1-MGC-2207-0008, Dated 05.07.2022 The commencement date shall be
19.07.2022
5
Employer’s Name and
address
Haryana Rail Infrastructure Development Corporation Limited (HRIDC) Plot No. 143, 5th
floor, RailtelTower,Sector-44,Gurugram, Haryana-122003
Email:-cpmhridc@gmail.com
6
Engineer’s name and
address
RITES Limited in Consortium with SMEC international PVT. Ltd. 4th floor, Plot no.144,
RITES Limited,Sector 44 Gurugram, Haryana-122003
7 Contractor
M G Contractors Pvt Ltd
Head Office : Plot No. 376 IndustrialArea Phase 1,
Punchkula-134113, Haryana
Regd. Office: 603, Ring Road Mall, Sector -3 Rohini New Delhi-110085
9 EstimatedCost Rs. 27,75,85,095 Cores
10
Date of commencement
of works
19.07.2022

Salient
Feature of
HORC Project
11 Period Of Completion 365 Days
12
Time for the parties to
sign the Contract
Agreement
35 Days after receipt of the Letter of Acceptance
13. Performance Security
Performance Security
(1) Equal to 5% of the Contract Amount i.e (5% * 27,75,85,095) = Rs. 1,38,69,260/-
14.
Time for access to the
Site
The performance security will be in the form of a “Demand Guarantee” in the amount of
5% of the Accepted Contract Amount
Performance security submit within 28 days after receiving of the letter of acceptance
1. The Contractor can start fabrication of the open Web GIRDER (OWG) in RDSO approved
workshop immediately after the Commencement Date.
2. Access to the site for the launching of OWG will be provided as follows:
(a) For Manesar –Patli single line Connectivity-120 days after Commencement Date.
(b) For the mainline -240 days after the commencement Date
15.
The maximum amount of
Delay damage
1). 5% of the accepted Contract Amount, less the provisional sum.

Salient
Feature of
HORC Project
16. INSURANCE
1) The Death of or injury to any person (WC Policy)
2) The loss of or damage to any property (Other Than the works) (CAR Policy).
3) All insurances obtained by the Concessionaire in accordance with sub-clause 19.2.4 shall be
maintained with insurers on terms consistent with Good Industry Practice. Within 15 days of
obtaining any insurance cover, the Concessionaire shall furnish to the Authority, notarized true
copies of the certificate(s) of insurance, copies of insurance policies and premium payment
receipts in respect of such insurance, and no such insurance shall be cancelled, modified, or
allowed to expire or lapse until the expiration of at least 45 days after notice of such proposed
cancellation, modification or nonrenewal has been delivered by the Concessionaire to the
Authority.
17.
Project Completion
Schedule
PROJECT MILESTONE-I
1. Project Milestone-I (MS1) Trial assembly of 1st open Web Girder (OWG). Time for completion
from the commencement date i.e. 120 days (Date: 15/11/2022).
PROJECT MILESTONE-II
1. Project Milestone-II Launching/erection of 1st OWG on Mnaesar –Patli connectivity i.e. Time
for completion from the commencement date i.e 180 days (Date: 15/01/2023).
PROJECT MILESTONE-III
1. Project Milestone-III Completion of track works on Manesar-Patli connectivity. Time for
completion from the commencement date i.e 195 days (Date: 30/01/2023).
Stipulated Date of Completion =19.07.2023
Defect Notification Period = 365 days calculated from the date of issue of the taking over the
certificate for the work.

Performance
Security 4.2
The Contractor shall obtain (at the Contractor’s cost) a Performance
Security to secure the Contractor’s proper performance of the Contract,
in the amount and currencies stated in the Contract Data. If no amount is
stated in the Contract Data, this Sub-Clause shall not apply.
4.2.1 Contractor’s obligations
The Contractor shall deliver the Performance Security to the Employer,
with a copy to the Engineer, within 28 days after receiving the Letter of
Acceptance. The Performance Security shall be issued by an entity and
from within a country (or other jurisdiction) to which the Employer gives
consent and shall be in the form annexed to the Particular Conditions, or
in another form agreed by the Employer (but such consent and/or
agreement shall not relieve the Contractor from any obligation under
this Sub-Clause).
The Contractor shall ensure that the Performance Security remains valid
and enforceable until the issue of the Performance Certificate and the
Contractor has complied with Sub-Clause 11.11 [Clearance of Site]. If the
terms of the Performance Security specify an expiry date, and the
Contractor has not become entitled to receive the Performance
Certificate by the date 28 days before the expiry date, the Contractor
shall extend the validity of the Performance Security until the issue of
the Performance Certificate and the Contractor has complied with Sub-
Clause 11.11 [Clearance of Site].
Whenever Variations and/or adjustments under Clause 13 [Variations and
Adjustments] result in an accumulative increase or decrease of the
Contract Price by more than twenty percent (20%) of the Accepted
Contract Amount:
a) in the case of such an increase, at the Employer’s request the
Contractor shall promptly increase the amount of the Performance
Security in that currency by a percentage equal to the accumulative
increase. If the Contractor incurs Cost as a result of this Employer’s
request, Sub-Clause 13.3.1 [Variation by Instruction] shall apply as if
the increase had been instructed by the Engineer; or
b) in the case of such a decrease, subject to the Employer’s prior
consent the Contractor may decrease the amount of the
Performance Security in that currency by a percentage equal to the
accumulative decrease.

Meeting 3.8
3.8 Meetings
The Engineer or the Contractor’s
Representative may require the other to
attend a management meeting to discuss
arrangements for future work and/ or other
matters in connection with execution of the
Works.
The Employer’s other contractors, the
personnel of legally constituted public
authorities and/or private utility companies,
and/or Subcontractors may attend any such
meeting, if requested by the Engineer or
the Contractor’s Representative.
The Engineer shall keep a record of each
management meeting and supply copies of
the record to those attending and to the
Employer. At any such meeting, and in the
record, responsibilities for any actions to be
taken shall be in accordance with the
Contract.

Key Personnel
6.12
 If no Key Personnel are stated in the Specification this Sub-Clause shall not apply.
 The Contractor shall appoint the natural persons named in the Tender to the positions of Key
Personnel. If not so named, or if an appointed person fails to act in the relevant position of Key
Personnel, the Contractor shall submit to the Engineer for consent the name and particulars of
another person the Contractor proposes to appoint to such position. If consent is withheld or
subsequently revoked, the Contractor shall similarly submit the name and particulars of a suitable
replacement for such position.
 If the Engineer does not respond within 14 days after receiving any such submission, by giving a
Notice stating his/her objection to the appointment of such person (or replacement) with reasons,
the Engineer shall be deemed to have given his/her consent.
 The Contractor shall not, without the Engineer’s prior consent, revoke the appointment of any of
the Key Personnel or appoint a replacement (unless the person is unable to act as a result of death,
illness, disability or resignation, in which case the appointment shall be deemed to have been
revoked with immediate effect and the appointment of a replacement shall be treated as a
temporary appointment until the Engineer gives his/her consent to this replacement, or another
replacement is appointed, under this Sub-Clause).
 All Key Personnel shall be based at the Site (or, where Works are being executed off the Site, at the
location of the Works) for the whole time that the Works are being executed. If any of the Key
Personnel is to be temporarily absent during execution of the Works, a suitable replacement shall be
temporarily appointed, subject to the Engineer’s prior consent.
 All Key Personnel shall be fluent in the language for communications defined in Sub-Clause 1.4 [Law
and Language].

Inspection 7.3
The Employer’s Personnel shall, during all the normal working hours stated in the Contract Data and at all
other reasonable times:
a) have full access to all parts of the Site and to all places from which natural Materials are being obtained;
b) During production, manufacture and construction (at the Site and elsewhere), be entitled to:
I. (examine, inspect, measure and test (to the extent stated in the Specification) the Materials,
Plant and workmanship,
II. Check the progress of manufacture of Plant and production and manufacture of Materials, and
III. make records (including photographs and/or video recordings); and
c) carry out other duties and inspections, as specified in these Conditions and the Specification.
The Contractor shall give the Employer’s Personnel full opportunity to carry out these activities, including
providing safe access, facilities, permissions and safety equipment. The Contractor shall give a Notice to the
Engineer whenever any Materials, Plant or work is ready for inspection, and before it is to be covered up, put
out of sight, or packaged for storage or transport. The Employer’s Personnel shall then either carry out the
examination, inspection, measurement or testing without unreasonable delay, or the Engineer shall
promptly give a Notice to the Contractor that the Employer’s Personnel do not require to do so. If the
Engineer gives no such Notice and/or the Employer’s Personnel do not attend at the time stated in the
Contractor’s Notice (or such time as may be agreed with the Contractor), the Contractor may proceed with
covering up, putting out of sight or packaging for storage or transport.
If the Contractor fails to give a Notice in accordance with this Sub-Clause, the Contractor shall, if and when
required by the Engineer, uncover the work and thereafter reinstate and make good, all at the Contractor’s
risk and cost.

Testing By the
Contractor 7.4
 This Sub-Clause shall apply to all tests specified in the Contract, other than theTests after Completion (if any).
The Contractor shall provide all apparatus, assistance, documents and other information, temporary supplies
of electricity and water, equipment, fuel, consumables, instruments, labour, materials, and suitably qualified,
experienced and competent staff, as are necessary to carry out the specified tests efficiently and properly. All
apparatus, equipment and instruments shall be calibrated in accordance with the standards stated in the
Specification or defined by applicable Laws and, if requested by the Engineer, the Contractor shall submit
calibration certificates before carrying out testing. The Contractor shall give a Notice to the Engineer, stating
the time and place for the specified testing of any Plant, Materials and other parts of the Works. This Notice
shall be given in reasonable time, having regard to the location of the testing, for the Employer’s Personnel to
attend.
 The Engineer may, under Clause 13 [Variations and Adjustments], vary the location or timing or details of
specified tests, or instruct the Contractor to carry out additional tests. If these varied or additional tests show
that the tested Plant, Materials or workmanship is not in accordance with the Contract, the Cost and any
delay incurred in carrying out this Variation shall be borne by the Contractor. The Engineer shall give a Notice
to the Contractor of not less than 72 hours of his/her intention to attend the tests. If the Engineer does not
attend at the time and place stated in the Contractor’s Notice under this Sub-Clause, the Contractor may
proceed with the tests, unless otherwise instructed by the Engineer. These tests shall then be deemed to
have been made in the Engineer’s presence. If the Contractor suffers delay and/or incurs Cost from
complying with any such instruction or as a result of a delay for which the Employer is responsible, the
Contractor shall be entitled subject to Sub-Clause 20.2 [Claims For Payment and/or EOT] to EOT and/or
payment of Cost Plus Profit.
 If the Contractor causes any delay to specified tests (including varied or additional tests) and such delay
causes the Employer to incur costs, the Employer shall be entitled subject to Sub-Clause 20.2 [Claims For
Payment and/or EOT] to payment of these costs by the Contractor. The Contractor shall promptly forward to
the Engineer duly certified reports of the tests. When the specified tests have been passed, the Engineer shall
endorse the Contractor’s test certificate, or issue a test certificate to the Contractor, to that effect. If the
Engineer has not attended the tests, he/she shall be deemed to have accepted the readings as accurate.
 Sub-Clause 7.5 [Defects and Rejection] shall apply in the event that any Plant, Materials and other parts of the
Works fails to pass a specified test.

Delay caused
byAuthorities
8.6
If:
a) the Contractor has diligently followed the procedures laid down by the relevant
legally constituted public authorities or private utility entities in the Country;
b) these authorities or entities delay or disrupt the Contractor’s work; and
c) the delay or disruption was Unforeseeable, then this delay or disruption will be
considered as a cause of delay under sub-paragraph (b) of Sub-Clause 8.5 [Extension
ofTime for Completion].

Extension of
Time for
Completion 8.5
The Contractor shall be entitled subject to Sub-Clause 20.2 [Claims For Payment and/or
EOT] to Extension of Time if and to the extent that completion for the purposes of Sub-
Clause 10.1 [Taking Over the Works and Sections] is or will be delayed by any of the
following causes:
a) a Variation (except that there shall be no requirement to comply with Sub-Clause 20.2
[Claims For Payment and/or EOT]);
b) a cause of delay giving an entitlement to EOT under a Sub-Clause of these Conditions;
c) exceptionally adverse climatic conditions, which for the purpose of these Conditions
shall mean adverse climatic conditions at the Site which are Unforeseeable having
regard to climatic data made available by the Employer under Sub-Clause 2.5 [Site
Data and Items of Reference] and/or climatic data published in the Country for the
geographical location of the Site;
d) Unforeseeable shortages in the availability of personnel or Goods (or Employer-
Supplied Materials, if any) caused by epidemic or governmental actions; or
e) any delay, impediment or prevention caused by or attributable to the Employer, the
Employer’s Personnel, or the Employer’s other contractors on the Site.

Extension of
Time for
Completion 8.5
The Contractor shall be entitled subject to Sub-Clause 20.2 [Claims For Payment and/or
EOT] to EOT if the measured quantity of any item of work in accordance with Clause 12
[Measurement and Valuation] is greater than the estimated quantity of this item in the Bill
of Quantities or other Schedule by more than ten per cent (10%) and such increase in
quantities causes a delay to completion for the purposes of Sub-Clause 10.1 [Taking Over
the Works and Sections]. The agreement or determination of any such Claim, under Sub-
Clause 20.2.5 [Agreement or determination of the Claim], may include a review by the
Engineer of measured quantities of other items of work which are significantly less (by
more than 10%) than the corresponding estimated quantities in the Bill of Quantities or
other Schedule. To the extent that there are such lesser measured quantities, the Engineer
may take account of any favourable effect on the critical path of the Programme.
However, the net effect of all such consideration shall not result in a net reduction in the
Time for Completion
When determining each EOT under Sub-Clause 20.2 [Claims For Payment and/or EOT], the
Engineer shall review previous determinations under Sub-Clause 3.7 [Agreement or
Determination] and may increase, but shall not decrease, the total EOT. If a delay caused
by a matter which is the Employer’s responsibility is concurrent with a delay caused by a
matter which is the Contractor’s responsibility, the Contractor’s entitlement to EOT shall
be assessed in accordance with the rules and procedures stated in the Special Provisions (if
not stated, as appropriate taking due regard of all relevant circumstances).

Advance
Payment 14.2
 After receiving the Advance Payment Certificate, the Employer shall make an advance
payment, as an interest-free loan for mobilisation (and design, if any). The amount of
the advance payment and the currencies in which it is to be paid shall be as stated in
the Contract Data.
 14.2.1 Advance Payment Guarantee The Contractor shall obtain (at the Contractor’s
cost) an Advance Payment Guarantee in amounts and currencies equal to the advance
payment, and shall submit it to the Employer with a copy to the Engineer. This
guarantee shall be issued by an entity and from within a country (or other jurisdiction)
to which the Employer gives consent, and shall be based on the sample form included
in the tender documents or on another form agreed by the Employer (but such
consent and/or agreement shall not relieve the Contractor from any obligation under
this Sub-Clause). The Contractor shall ensure that the Advance Payment Guarantee is
valid and enforceable until the advance payment has been repaid, but its amount may
be progressively reduced by the amount repaid by the Contractor as stated in the
Payment Certificates. If the terms of the Advance Payment Guarantee specify its
expiry date, and the advance payment has not been repaid by the date 28 days before
the expiry date: (a) the Contractor shall extend the validity of this guarantee until the
advance payment has been repaid; (b) the Contractor shall immediately submit
evidence of this extension to the Employer, with a copy to the Engineer; and (c) if the
Employer does not receive this evidence 7 days before the expiry date of this
guarantee, the Employer shall be entitled to claim under the guarantee the amount of
advance payment which has not been repaid. When submitting the Advance Payment
Guarantee, the Contractor shall include an application (in the form of a Statement) for
the advance payment.

Advance
Payment 14.2
14.2.3 Repayment of Advance Payment The advance payment shall be repaid through
percentage deductions in Payment Certificates. Unless other percentages are stated in the
Contract Data:
a) deductions shall commence in the IPC in which the total of all certified interim payments
in the same currency as the advance payment (excluding the advance payment and
deductions and release of retention moneys) exceeds ten percent (10%) of the portion of
the Accepted ContractAmount payable in that currency less Provisional Sums; and
b) deductions shall be made at the amortisation rate of one quarter (25%) of the amount of
each IPC (excluding the advance payment and deductions and release of retention
moneys) in the currencies and proportions of the advance payment, until such time as the
advance payment has been repaid.
If the advance payment has not been repaid before the issue of the Taking-Over Certificate for
the Works, or before termination under Clause 15 [Termination by Employer], Clause 16
[Suspension and Termination by Contractor] or Clause 18 [Exceptional Events] (as the case
may be), the whole of the balance then outstanding shall immediately become due and
payable by the Contractor to the Employer.
14.2.2 Advance Payment Certificate The Engineer shall issue an Advance Payment Certificate for
the advance payment within 14 days after: (a) the Employer has received both the Performance
Security and the Advance Payment Guarantee, in the form and issued by an entity in accordance
with Sub-Clause 4.2.1 [Contractor’s Obligations] and Sub-Clause 14.2.1 [Advance Payment
Guarantee] respectively; and (b) the Engineer has received a copy of the Contractor’s application
for the advance payment under Sub-Clause 14.2.1 [Advance Payment Guarantee].

Adjustments
forChanges in
Laws 13.6
Subject to the following provisions of this Sub-Clause, the Contract Price shall be adjusted to
take account of any increase or decrease in Cost resulting from a change in:
a) the Laws of the Country (including the introduction of new Laws and the repeal or
modification of existing Laws);
b) the judicial or official governmental interpretation or implementation of the Laws referred
to in sub-paragraph (a) above;
c) any permit, permission, license or approval obtained by the Employer or the Contractor
under sub-paragraph (a) or (b), respectively, of Sub-Clause 1.13 [Compliance with Laws]; or
d) the requirements for any permit, permission, licence and/or approval to be obtained by the
Contractor under sub-paragraph (b) of Sub-Clause 1.13 [Compliance with Laws],
made and/or officially published after the Base Date, which affect the Contractor in the
performance of obligations under the Contract. In this Sub-Clause “change in Laws” means any
of the changes under sub-paragraphs (a), (b), (c) and/or (d) above.

Adjustments
forChanges in
Laws 13.6
If the Contractor suffers delay and/or incurs an increase in Cost as a result of any change in
Laws, the Contractor shall be entitled subject to Sub-Clause 20.2 [Claims For Payment and/or
EOT] to EOT and/or payment of such Cost.
If there is a decrease in Cost as a result of any change in Laws, the Employer shall be entitled
subject to Sub-Clause 20.2 [Claims For Payment and/or EOT] to a reduction in the Contract
Price.
If any adjustment to the execution of the Works becomes necessary as a result of any change in
Laws:
I. the Contractor shall promptly give a Notice to the Engineer, or
II. the Engineer shall promptly give a Notice to the Contractor (with detailed supporting
particulars).
Thereafter, the Engineer shall either instruct a Variation under Sub-Clause 13.3.1 [Variation by
Instruction] or request a proposal under Sub-Clause 13.3.2 [Variation by Request for Proposal].

Progress
Reports 4.20
Monthly progress reports, in the format stated in the Specification
(if not stated, in a format acceptable to the Engineer) shall be
prepared by the Contractor and submitted to the Engineer. Each
progress report shall be submitted in one paper-original, one
electronic copy and additional paper copies (if any) as stated in
the Contract Data. The first report shall cover the period up to the
end of the first month following the Commencement Date.
Reports shall be submitted monthly thereafter, each within 7 days
after the last day of the month to which it relates.

Engineer’s
Instructions3.5
 The Engineer may issue to the Contractor (at any time) instructions which may be
necessary for the execution of the Works, all in accordance with the Contract. The
Contractor shall only take instructions from the Engineer, or from the Engineer’s
Representative (if appointed) or an assistant to whom the appropriate authority to
give instruction has been delegated under Sub-Clause 3.4 [Delegation by the
Engineer]. Subject to the following provisions of this Sub-Clause, the Contractor shall
comply with the instructions given by the Engineer or the Engineer’s Representative
(if appointed) or delegated assistant, on any matter related to the Contract. If an
instruction states that it constitutes a Variation, Sub-Clause 13.3.1 [Variation by
Instruction] shall apply. If not so stated, and the Contractor considers that the
instruction: (a) constitutes a Variation (or involves work that is already part of an
existing Variation); or (b) does not comply with applicable Laws or will reduce the
safety of the Works or is technically impossible the Contractor shall immediately,
and before commencing any work related to the instruction, give a Notice to the
Engineer with reasons. If the Engineer does not respond within 7 days after receiving
this Notice, by giving a Notice confirming, reversing or varying the instruction, the
Engineer shall be deemed to have revoked the instruction. Otherwise the Contractor
shall comply with and be bound by the terms of the Engineer’s response.

TakingOver
10.1
The Engineer may, at the sole discretion of the Employer, issue a Taking-Over Certificate for any
part of the Permanent Works. The Employer shall not use any part of the Works (other than as a
temporary measure, which is either stated in the Specification or with the prior agreement of the
Contractor) unless and until the Engineer has issued a Taking-Over Certificate for this part.
However, if the Employer does use any part of the Works before the Taking-Over Certificate is
issued the Contractor shall give a Notice to the Engineer identifying such part and describing
such use, and:
a) that Part shall be deemed to have been taken over by the Employer as from the date on
which it is used;
b) the Contractor shall cease to be liable for the care of such Part as from this date, when
responsibility shall pass to the Employer; and
c) the Engineer shall immediately issue a Taking-Over Certificate for this Part, and any
outstanding work to be completed (including Tests on Completion) and/or defects to be
remedied shall be listed in this certificate.

TakingOver
10.1
 After the Engineer has issued a Taking-Over Certificate for a Part, the Contractor shall be given
the earliest opportunity to take such steps as may be necessary to carry out the outstanding
work (including Tests on Completion) and/or remedial work for any defects listed in the
certificate. The Contractor shall carry out these works as soon as practicable and, in any case,
before the expiry date of the relevant DNP. If the Contractor incurs Cost as a result of the
Employer taking over and/ or using a Part, the Contractor shall be entitled subject to Sub-
Clause 20.2 [Claims For Payment and/or EOT] to payment of such Cost Plus Profit. If the
Engineer issues a Taking-Over Certificate for any part of the Works, or if the Employer is
deemed to have taken over a Part under sub-paragraph (a) above, for any period of delay after
the date under sub-paragraph (a) above, the Delay Damages for completion of the remainder
of the Works shall be reduced. Similarly, the Delay Damages for the remainder of the Section
(if any) in which this Part is included shall also be reduced. This reduction shall be calculated as
the proportion which the value of the Part (except the value of any outstanding works and/or
defects to be remedied) bears to the value of the Works or Section (as the case may be) as a
whole. The Engineer shall proceed under Sub-Clause 3.7 [Agreement or Determination] to
agree or determine this reduction (and for the purpose of Sub-Clause 3.7.3 [Time limits], the
date the Engineer receives the Contractor’s Notice under this Sub-Clause shall be the date of
commencement of the time limit for agreement under Sub-Clause 3.7.3). The provisions of this
paragraph shall only apply to the daily rate of Delay Damages, and shall not affect the
maximum amount of these damages.

Conclusion
Effectively implementing FIDIC contracts ensures
streamlined project management with fair risk
distribution, fostering cooperation and minimizing
disputes. This standardized yet adaptable framework not
only facilitates timely project completion and cost
control but also provides global consistency and
contractual clarity, creating a reliable foundation for
successful construction endeavors worldwide. Adhering
to FIDIC guidelines promotes a collaborative and
efficient environment, reducing uncertainties and
enhancing the overall success of construction projects.

References
1. Fidic.org;
2. FIDIC Red Book;
3. World BankWebsite;
4. Asian Infrastructure Investment BankWebsite;
5. Consulting EngineersAssociation of India;
6. HaryanaOrbital RailCorridor (HORC) Contract and
correspondence records;
7. MG Contractors Pvt. Ltd correspondence records.

FIDIC Contracts Masterclass: Practical Guide to the 2017 Suite.

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FIDIC Contracts Masterclass: Practical Guide to the 2017 Suite.