A new standard for tunnelling contracts - Tunnelling Journal, April/ May 2017

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PDF icon tunneling journal april may 2017 p48.pdf

 " A contractual standard specifically for the tunnelling industry is fast emerging on the horizon – the New FIDIC ‘Emerald’ Book. Ulrich Helm, Partner, and Fabian Bonke, an Associate, of the international law firm Hogan Lovells International LLP explain : THERE CAN BE NO DOUBT that subsurface construction projects require specialist contractual frameworks. Within these contractual frameworks, it is of paramount importance to manage the risks specific to underground projects such as uncertainties regarding the geological, geotechnical and structural performance of the subsurface space. Thus far, no internationally recognised standard forms for underground tunnelling contracts exist. The International Federation of Consulting Engineers (FIDIC), in cooperation with the International Tunnelling and Underground Space Association (ITA), is about to close that gap. The two organisations are jointly developing specific Conditions of Contract for Tunnelling and Underground Works under the working title ‘Emerald Book’.

Cooperation between ITA and FIDIC The ITA has long since recognised the key role of contractual provisions. In 1974, the ITA established a Working Group on Contractual Sharing of Risks (today ITA Working Group 3). The Working Group has since published recommendations on a large variety of contractual topics. One key concern has been to find ways to equitably distribute underground risk between owner, contractor and consultant. The recommendations further dealt with, inter alia; changed conditions clauses; full disclosure of available subsurface information; and the pre-qualification of contractors.

Additionally, since the 1970's, ITA officials began discussions with representatives of FIDIC to include the ITA recommendations into FIDIC Conditions of Contract. These Conditions of Contract published by FIDIC are probably the most frequently used contract forms for international infrastructure projects. FIDIC has published a variety of different Conditions of Contract, which are now (unofficially) referred to according to the colour of their bindings: most renowned being the Red Book (building and engineering works designed by the employer) and the Yellow Book (building and engineering works designed by the contractor).

In recent years FIDIC has published many new Conditions of Contract and the new – possibly Emerald coloured – book on Tunnelling and Underground Works will soon complement the FIDIC suite. To this end, ITA and FIDIC in 2014 set up the shared Task Group 10 “Contract Form for Tunnelling and Underground Works” which consists of 3 members from FIDIC (Jim Maclure (United Kingdom), Gösta Ericson (Sweden), Hannes Ertl (Austria)) and 4 members from ITA (Andres Marulanda (Colombia), Charles Nairac (France), Martin Smith (United Kingdom/Korea) and the Chairman Matthias Neuenschwander (Switzerland)). In close cooperation with ITA Working Group 3, the  shared Task Group 10 have met more than ten times so far taking its decisions unanimously." READ THE COMPLETE ARTICLE HERE.

Helm, U, & Bonke, F, (2017). A new standard for Tunnelling Contracts, Tunneling Journal, April/ May 2017, p48 to p50, http://tunnellingjournal.com/tunnellin-journal-aprilmay-2017/?fullscreen