A licence for fair contracting

The number and range of licences signed by leading organisations to use FIDIC contracts shows that these industry standard documents are becoming ever more popular around the global construction sector.

FIDIC standard forms of contract are increasingly becoming the benchmark for global construction contracts as clients are attracted by the fair and balanced approach they take, especially in the area of project risk. The number of organisations that have signed licence agreements with FIDIC to use our contracts is testament to the high regard in which the documents are held and only serves to raise their profile even more.

One such organisation is the International Labour Organization which has recently signed a licence for its Employment Intensive Infrastructure Programme in Lebanon (EIIP) to use the FIDIC Short Form of Contract (Green Book 1999) for two years.

The United Nations UNOPS agency, which provides infrastructure, procurement and project management services for a more sustainable world, has signed a bespoke licence for four FIDIC documents to create multiple bespoke contracts for five years. The contracts they will use include the FIDIC Conditions of Contract for Construction Contract (Red Book) 1999 Edition, FIDIC Conditions of Contract for Plant and Design-Build (Yellow Book) 1999 Edition, the FIDIC Short Form of Contract (Green Book) 1999 Edition and the FIDIC Client/ Consultant Model Services Agreement (White Book) 2006 Edition.

FIDIC recently granted another UN agency, IFAD, a non-exclusive licence to refer to six major FIDIC contracts for projects they finance and the documents will be used as part of the fund’s standard bidding documents. The contracts mainly include the 2017 Second edition FIDIC contracts, which cover a wide range of international construction and infrastructure work and IFAD’s move to use the documents represents a major endorsement for the contracts from an international funding organisation. This is a significant move from a key UN agency.

Another key organisation that has renewed its ongoing licence to use FIDIC contracts is IKEA who have been using FIDIC contracts since 2015. They recently bought two watermarked collections for a number of key FIDIC contracts and one bespoke licence for a project in Malaysia. Another vote of confidence for our contracts from a leading global brand.

Elsewhere, FIDIC has signed 16 bespoke licenses with renewable power producer Scatec for its 150 MW Sukkur solar plant project portfolio in Sindh, Pakistan. Working for the National Energy Power Regulatory Authority, Scatec and its local partner, Nizam Energy, are working on the finance and construction of the project. Scatec will hold 75% of the equity, with Nizam holding the remaining 25% and annual revenues are expected to be $11m. The project has a total estimated capex of $100m with a debt leverage of 75%.

FIDIC has signed dozens of licence agreements with organisations all over the work and many more are in the pipeline. Commenting on this success, FIDIC’s international client manager Ieva Liaugaude, said: “The post-Covid recovery is still very much underway and now more than ever FIDIC is ready to offer well-structured and balanced contracts that are well known and supported by key funding agencies. We are pleased to enjoy the trust invested in these ongoing partnerships and delighted to have established new affiliations with prominent stakeholders.”