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FIDIC is the International Federation of Consulting Engineers, known by its French acronym.

It was formed in 1913, with the objective of promoting the interests of consulting engineering firms globally. It is best known for its range of standard conditions of contract for the construction, plant and design industries. The FIDIC forms are the most widely used forms of contract internationally, including by the World Bank for its projects. This guide will look at the Red and Yellow Books under the FIDIC Suite of New Contracts. What is the FIDIC family of contracts? The FIDIC 'Rainbow Suite' of New Contracts was published in 1999 and includes: the Red Book: Conditions of Contract for Construction for Building and Engineering Works Designed by the Employer; the Yellow Book: Conditions of Contract for Plant and Design-Build; the Silver Book: Conditions of Contract for EPC/Turnkey Projects; the Green Book: Conditions of Short Form of Contract. These 'new' forms were first editions and designed to be user-friendly, with a standardised approach and a reduction in the general conditions from over 60 to 20 clauses. Additional forms in use since 1999 include: the Blue Book: Contract for Dredging and Reclamation Works; MDB/FIDIC Contract: FIDIC conditions incorporated in the standard bidding documents of multilateral development banks; the White Book: Client/Consultant Model Services Agreement; the Gold Book: FIDIC Design, Build and Operate Projects. To assist with implementing its founding objectives, FIDIC's approach to drafting contracts has always been underpinned by the principle that its contracts must provide a fair allocation of risks between the parties to a contract, and that risks should be borne by the party best able to control them. One of the advantages of using the FIDIC suite of contracts is that there is consistency across the various forms. While each form of contract is intended for a different type of project or procurement strategy, a core of common clauses are used across all of the forms and where possible, the same words and definitions are used. This means knowledge of one form can be used on other forms in the FIDIC suite of contracts. The different forms of contract within the FIDIC suite are organised around the level of design responsibility assumed by the Employer and Contractor. Each contract is called a book and is assigned a particular colour. In this publication, we take a look at the various books forming part of the FIDIC suite, highlighting when their use is appropriate.

Red Book While originally intended for civil engineering projects such as roads and bridges, the Red Book is now appropriate for any type of project where most of the work is carried out on site and the main responsibility for design lies with the Employer or its appointed Engineer. Under this contract, the risk of control of the project is with the Employer. They and their representatives are responsible for management as well as administration and any risks that are not clearly identified as a Contractor s risk, falls onto the Employer. This includes errors in design or unforeseen events for example. While the Employer does take on some of the risks under the Red Book, they have the benefit of deciding how best to manage them. In exchange for taking responsibility for design and management, the Employer is likely to pay less to the Contractor under the Red Book as oppose to the other forms of FIDIC. If an Employer has a good consultant team to manage and design the project, the Red Book can provide good value for money. The key to success is ensuring that any savings an Employer makes in taking control of the project is not lost to Contractor claims due to defective or inadequate design and poor management. Where Multilateral Development Bank, (such as the Caribbean Development Bank or World Bank) and their borrowers are involved in the project FIDIC has an MDB edition of the Red Book which facilitates their participation.

Yellow Book In contrast with the Red Book, the Yellow Book is designed for projects where most or all of the design work will be carried out by the Contractor or if portions of the work will be carried out off site and testing and commissioning procedures are important. Under the Yellow Book, the Employer provides a set of requirements to which the Contractor must design and build. These requirements are referred to as Employer s Requirements. Under this form, the Contractor takes all or most of the risk under the contract including design. This means the client is less likely to be faced with Contractor claims but will pay a higher price. One of the major factors when considering the Yellow Book is the adequacy of the Employer s Requirements. As mentioned above, the Contractor s obligation is to design and construct in accordance with these requirements. If they are wrong or vague, the Employer is likely to be faced with Contractor claims. Another consideration is supervision of the works. Since the Contractor takes on all design and construction risk, the Employer has less control over quality. Supervision is therefore critical and for this reason the Yellow Book contains more substantive testing, commissioning and taking over procedures than the Red Book.

To prevent defect issues compromising the integrity of the project, an Employer must be satisfied that the works can be competently and adequately supervised by its team. Silver Book The FIDIC forms of contract are drafted on the basic principle that risk should be allocated to the party that is best able to bear and control that risk. As a result, the Contractor is not required to price or be responsible for conditions which are not known to him or which could not be reasonably foreseeable at the time of his tender. This creates a degree of uncertainty as to price and time when these conditions arise on a project. Prior to the development of the Silver Book, to avoid this sort of uncertainty, many Employers would amend the balance of risk in the Red or Yellow Book by placing a higher level of responsibility on the Contractor. The Silver Book avoids the need for these sorts of amendments. This form of contract enables the Employer to pass all risks whether known or unknown to the Contractor. For example, the accuracy of the Employer s Requirements is the Contractor s responsibility under the Silver Book even though it is prepared by the Employer. The Silver Book is not suitable in instances where time or information is insufficient before contract signature or considerable work is underground or difficult to inspect. It is also inappropriate if the Employer will be involved in designing or closely supervising the works. The Employer has to feel comfortable passing control of the project over to the Contractor. Given that the risks for time, cost and quality are transferred to the Contractor, the Silver Book should ideally only be used with experienced Contractors familiar with sophisticated risk management techniques. Naturally taking on extra risk means that the price may be higher for Employers but in some instances, this is a small price to pay for certainty. Given the high level of risk transfer, the Employer must allow sufficient time in its procurement programme for the Contractor to obtain and consider all relevant information before signing the contract. A failure to do so could have real consequences to the success of the project. Green Book There is within the Caribbean construction industry a tendency to use the traditional forms such as FIDIC as a matter of cause because of its familiarity, even if it may not always be appropriate. A common occurrence is to use the Red Book for the construction of homes and other smaller projects. More often than not, it is inappropriate and can cause more challenges than it solves. In circumstances such as these where the parties wish to stay within the FIDIC family on small projects, the Green Book is recommended. This form of contract is intended for engineering and building work of small capital value or projects where the work is simple or repetitive without the need for specialist subcontractors. The contract is flexible enough to be used where the Contractor constructs in accordance with the Employer s design or where the contractor wholly or partly designs the works.

In addition, it is user friendly, taking all of the essential clauses which FIDIC is renowned for but deleting the administrative feature which would be unnecessary on a small project. The World Bank has found it so useful that it is now incorporated in their Standard Bidding Documents for Simple Works. The FIDIC suite of forms is a flexible set of contracts which are designed to successfully balance many of the risks which are inherent in building. The key to their successful use is ensuring that the form is suitable for your specific project.

The Committee headed by Sh. B.K. Chaturvedi Committee, looking into the issues pertaining to the development of National Highways (Faster Implementation of NHDP) submitted its second report to the Government. For project specific conditions "Conditions of Particular Application (COPA)" is added as amendment. COPA supersedes GCC for the specific project. World Bank has accepted FIDIC and contracts of all the projects funded by World Bank and other international funding agencies, even in India, are based on FIDIC. FIDIC is also used in projects which are funded by public money, in India. Only the projects with Public Private Partnership (PPP) are run by a Concession Agreement (CA) as the contract conditions differ in that case. All the NHAI projects are based on FIDIC. The following are the changes in FIDIC conditions of contracts (GCC) adopted by NHAI under conditions of particular applications (COPA):

The time limit for the DRB to issue its recommendations may be raised from 56 days to 84 days in line with time-limit prescribed under the corresponding provisions in the FIDIC conditions1. The time limit for referring the DRB recommendation to Arbitration may also be raised from 28 days to say 60 days, to enable NHAI to take a considered decision on acceptance/challenge of the DRB recommendations; The appeals filed on the basis of the decisions by the Variations Committee may be periodically monitored and reviewed by MoRT&H inter alia regarding whether the strong reasons recorded for non-acceptance of DRB recommendations have been upheld by the Arbitral Tribunal; Review of DPR may be made more intensive. Where the DPR is deficient in providing the correct estimate of inputs, and deviate by more than say 10%, PLI may be mandatorily invoked; Cost associated with time extensions may be duly quantified. Where extension is granted on the grounds of non-availability of any stretch of land, it is imperative that the compensation should be limited only to such stretch and not across the entire project. Both the General Conditions and COPA may be standardized at least for adoption in future awards. In particular, the following specific areas need greater clarity and attention: Scope of Independent Engineer: FIDIC places great reliance on the Engineer both in terms of supervision and first level adjudication of disputes. This role of the Engineer is being internationally accepted and there is no reason not to adopt a similar role for the Engineer in India. However COPA of NHAI deviates from the spirit of FIDIC conditions, introducing elements substantially diluting the role and authority of the Independent Engineer. This may be reviewed and the international practice of giving greater authority to the Engineer may be restored. In any case, NHAI also appoints a Project Director (PD) for each project and the PD is expected to take adequate care of NHAI interests even at the time of contract management. However, while recommending this enhanced role for the Engineer, the Committee noted that the matter is also

under discussion separately with the Department of Expenditure. It was also acknowledged that care should also be taken to keep within the principles laid down in the General Financial Rules; In particular, it is necessary to clearly specify the scope of compensation for price escalation (particularly as several disputes have arisen in respect of whether price escalation includes changes in taxes/royalty, etc.); For BOQ items, a uniform rate may be prescribed irrespective of the amount of variation to bring about certainty in valuation method. The present ceiling of 25% beyond the specified quantity for applicability of the bid rate may be dispensed with; Broad guidelines for determination of non-BOQ rates may be specified. The major (say 5 or 6 nos.) inputs for the non-BOQ items could be identified based on experience so far and the source or method of pricing along with price escalation mechanism for such inputs could be indicated. For e.g. the price of bitumen could be determined based on the nearest refinery gate price (with suitable adjustments); Present form of Hydro Electric Contract Documents: Many developers framing own Conditions forcing all risks on Contractor -one sided Contractsleading to abnormal delays and disputes/Arbitration Some PSU s following FIDIC but conditions are so diluted that it makes it one sided Completion time is so compressed and unrealistic that most of the jobs are attracting Time and Cost over runs to the tune of 40-70% leading to disputes and delay in commissioning Pre-bid queries are not really addressed It is critical that each party understands its operational responsibilities discharges it with due diligence On the initiative of Ministry of Power, a Working Group on development of Model Contract document for Hydro Power Projects already functional Hope that the Standard Bidding Document for Hydro Power Projects is based on FIDIC document and is fully aligned with the base paper prepared based on practical difficulties experienced in Hydro Power Projects.

FIDIC s Red and Yellow Books (i.e. standard forms of contract for works of civil engineering construction and for electrical and mechanical works) have been in widespread use for several decades, and have been recognised among other things for their principles of balanced risk sharing between the Employer and the Contractor. These risk sharing principles have been beneficial for both parties, the Employer signing a contract at a lower price and only having further costs when particular unusual risks actually eventuate, and the Contractor avoiding pricing such risks which are not easy to evaluate. The principles of balanced risk sharing are continued in the new Construction and Plant and Design-Build Books. During recent years it has been noticed that much of the construction market requires a form of contract where certainty of final price, and often of completion date, are of extreme importance. Employers on such turnkey projects are willing to pay more sometimes considerably more for their project if they can be more certain that the agreed final price will not be exceeded. Among such projects can be found many projects financed by private funds, where the lenders require greater certainty about a project s costs to the Employer than is allowed for under the allocation of risks provided for by FIDIC s traditional forms of contracts. Often the construction project (the EPC Engineer, Procure, Construct Contract) is only one part of a complicated commercial venture, and financial or other failure of this construction project will jeopardize the whole venture. For such projects it is necessary for the Contractor to assume responsibility for a wider range of risks than under the traditional Red and Yellow Books. To obtain increased certainty of the final price, the Contractor is often asked to cover such risks as the occurrence of poor or unexpected ground conditions, and that what is set out in the requirements prepared by the Employer actually will result in the desired objective. If the Contractor is to carry such risks, the Employer obviously must give him the time and opportunity to obtain and consider all relevant information before the Contractor is asked to sign on a fixed contract price. The Employer must also realize that asking responsible contractors to price such risks will increase the construction cost and result in some projects not being commercially viable. Even under such contracts the Employer does carry certain risks such as the risks of war, terrorism and the like and the other risks of Force Majeure, and it is always possible, and sometimes advisable, for the Parties to discuss other risk sharing arrangements before entering into the Contract. In the case of BOT (Build-Operate-Transfer) type projects, which are normally negotiated as a package, the allocation of risk provided for in the turnkey construction Contract negotiated initially between the Sponsors and the EPC Contractor may need to be adjusted in order to take into account the final allocation of all risks between the various contracts forming the total package. Apart from the more recent and rapid development of privately financed projects demanding contract terms ensuring increased certainty of price, time and performance, it has long been apparent that many employers, particularly in the public sector, in a wide range of countries have demanded similar contract terms, at least for turnkey contracts. They have often irreverently taken the FIDIC Red or Yellow Books and altered the terms so that risks placed on the Employer in the FIDIC Books have been transferred to the Contractor, thus effectively removing FIDIC s traditional principles of balanced risk sharing. This need of many employers has not

gone unnoticed, and FIDIC has considered it better for all parties for this need to be openly recognised and regularised. By providing a standard FIDIC form for use in such contracts, the Employer does not have to attempt to alter a standard form intended for another risk arrangement, and the Contractor is fully aware of the increased risks he must bear. Clearly the Contractor will rightly increase his tender price to account for such extra risks. This form for EPC/Turnkey Projects is thus intended to be suitable, not only for EPC Contracts within a BOT or similar type venture, but also for all the many projects, both large and smaller, particularly E & M (Electrical and Mechanical) and other process plant projects, being carried out around the world by all types of employers, often in a civil law environment, where the government departments or private developers wish to implement their project on a fixed-price turnkey basis and with a strictly two party approach. Employers using this form must realise that the Employer s Requirements which they prepare should describe the principle and basic design of the plant on a functional basis. The Tenderer should then be permitted and required to verify all relevant information and data and make any necessary investigations. Fie shall also carry out any necessary design and detailing of the specific equipment and plant he is offering, allowing him to offer solutions best suited to his equipment and experience. Therefore the tendering procedure has to permit discussions between the Tenderer and the Employer about technical matters and commercial conditions. All such matters, when agreed, shall then form part of the signed Contract. Thereafter the Contractor should be given freedom to carry out the work in his chosen manner, provided the end result meets the performance criteria specified by the Employer. Consequently, the Employer should only exercise limited control over and should in general not interfere with the Contractor s work. Clearly the Employer will wish to know and follow progress of the work and be assured that the time programme is being followed. He will also wish to know that the work quality is as specified, that third parties are not being disturbed, that performance tests are met, and otherwise that the Employer s Requirements are being complied with. A feature of this type of contract is that the Contractor has to prove the reliability and performance of his plant and equipment. Therefore special attention is given to the Tests on Completion , which often take place over a considerable time period, and Taking Over shall take place only after successful completion of these tests. FIDIC recognizes that privately-financed projects are usually subject to more negotiation than publicly-financed ones and that therefore changes are likely to have to be made in any standard form of contract proposed for projects within a BOT or similar type venture. Among other things, such form may need to be adapted to take account of the special, if not unique, characteristics of each project, as well as the requirements of lenders and others providing financing. Nevertheless, such changes do not do away with the need for a standard form. These Conditions of Contract for EPC/Turnkey Projects are not suitable for use in the following circumstances: If there is insufficient time or information for tenderers to scrutinise and check the Employer s Requirements or for them to carry out their designs, risk assessment studies and estimating

If construction will involve substantial work underground or work in other areas which tenderers cannot inspect. If the Employer intends to supervise closely or control the Contractor s work, or to review most of the construction drawings. If the amount of each interim payment is to be determined by an official or other intermediary. FIDIC recommends that the Conditions of Contract for Plant and Design-Build be used in the above circumstances for Works designed by (or on behalf of) the Contractor.

SAMPLE FORM LETTER OF BID [All italicized text and any enclosing square brackets is for use in preparing the form and should be deleted from the final product.]

Date: ICB No.: Invitation for Bid No.: To:

We, the undersigned, declare that:

(a) We have examined and have no reservations to the Bidding Document, including Addenda issued in accordance with Instructions to Bidders (ITB) . [Number]

(b) We offer to execute in conformity with the Bidding Document the following Works

(c) The total price of our Bid, excluding any discounts offered in item (d) below is

(d) The discounts offered and the methodology for their application are:

..

(e) Our bid shall be valid for a period of

.. days from the date fixed for the bid submission

deadline in accordance with the Bidding Document, and it shall remain binding upon us and may be accepted at any time before the expiration of that period;

(f) If our bid is accepted, we commit to obtain a performance security in accordance with the Bidding Document;

(g) We, including any subcontractors or suppliers for any part of the contract, have or will have nationalities from eligible countries, in accordance with ITB .[Number];

(h) We, including any subcontractors or suppliers for any part of the contract, do not have any conflict of interest in accordance with ITB .[Number ];

(i) We are not participating, as a Bidder or as a subcontractor, in more than one bid in this bidding process in accordance with ITB [Number], other than alternative offers submitted in accordance with ITB .[Number];

We, including any of our subcontractors or suppliers for any part of the contract, have not been declared ineligible by the Bank, under the Employer s country laws or official regulations or by an act of compliance with a decision of the United Nations Security Council;

(j) We are not a government owned entity [or ]

We are a government owned entity but meet the requirements of ITB

..[Number];

(k) We have paid, or will pay the following commissions, gratuities, or fees with respect to the bidding process or execution of the Contract: Name of Recipient Address Reason Amount

[If none has been paid or is to be paid, indicate none .]

(l) We understand that this bid, together with your written acceptance thereof included in your notification of award, shall constitute a binding contract between us, until a formal contract is prepared and executed; and

(m) We understand that you are not bound to accept the lowest evaluated bid or any other bid that you may receive.

(n) We hereby certify that we have taken steps to ensure that no person acting for us or on our

behalf will engage in bribery.

Name: Signed: in the capacity of: Duly authorized to sign the bid for and on behalf of: Dated on .day of .., .

LETTER OF ACCEPTANCE

[All italicized text and any enclosing square brackets is for use in preparing the form and should be deleted from the final product.]

[Name and address of the Contractor] This is to notify you that your Bid dated .[Date] for execution of the . [Name of the Contract and identification number, as given in the Contract Data] for the Accepted Contract Amount of the equivalent of ..[Amount in numbers and words] [Name of currency], as corrected and modified in accordance with the Instructions to Bidders, is hereby accepted by our Agency.

You are requested to furnish the Performance Security within 28 days in accordance with the Conditions of Contract, using for that purpose one of the Performance Security Forms included in the annexes to the Particular Conditions. Authorized Signature: Name and Title of Signatory: Name of Agency: CONTRACT AGREEMENT This Agreement made the day of .., Employer ), of the one part, and .of ., between ..of ..(hereinafter the .(hereinafter the Contractor ), of the other part:

Whereas the Employer desires that the Works known as . should be executed by the Contractor, and has accepted a Bid by the Contractor for the execution and completion of these Works and the remedying of any defects therein,

The Employer and the Contractor agree as follows:

1. In this Agreement words and expressions shall have the same meanings as are respectively assigned to them in the Contract documents referred to.

2. The following documents shall be deemed to form and be read and construed as part of this Agreement. This Agreement shall prevail over all other Contract documents. (i) the Letter of Acceptance (ii) the Letter of Bid (ii) the addenda Nos (if any) (iv) the Particular Conditions - Part A (v) the Particular Conditions - Part B (vi) the General Conditions (vii) the Specification (viii) the Drawings, and (ix) the completed Schedules,

3. In consideration of the payments to be made by the Employer to the Contractor as indicated in this Agreement, the Contractor hereby covenants with the Employer to execute the Works and to remedy defects therein in conformity in all respects with the provisions of the Contract.

4. The Employer hereby covenants to pay the Contractor in consideration of the execution and completion of the Works and the remedying of defects therein, the Contract Price or such other sum as may become payable under the provisions of the Contract at the times and in the manner prescribed by the Contract.

In witness whereof the parties hereto have caused this Agreement to be executed in accordance with the laws of on the day, month and year indicated above.

Signed by: (for the Employer) Signed by: (for the Contractor) DISPUTE BOARD AGREEMENT

[All italicized text and any enclosing square brackets is for use in preparing the form and should be deleted from the final product.]

[For a one-person DB]

Name and details of Contract Name and address of Employer Name and address of Contractor Name and address of Member

Whereas the Employer and the Contractor have entered into the Contract and desire jointly to appoint the Member to act as sole Member who is also called the DB .

The Employer, Contractor and Member jointly agree as follows:

1. The conditions of this Dispute Board Agreement comprise the General Conditions of Dispute Board Agreement , which is appended to the General Conditions of the Conditions of Contract for Construction MDB Harmonised Edition published by the Fdration Internationale des Ingnieurs-Conseils (FIDIC), and the following provisions. In these provisions, which include amendments and additions to the General Conditions of Dispute Board Agreement, words and expressions shall have the same meanings as are assigned to them in the General Conditions of Dispute Board Agreement.

2. [Details of amendments to the General Conditions of Dispute Board Agreement, if any. For example: In the procedural rules annexed to the General Conditions of Dispute Board Agreement, Rule is deleted and replaced by: ...... ]

3. In accordance with Clause 6 of the General Conditions of Dispute Board Agreement, the Member shall be paid as follows: A retainer fee of plus a daily fee of .per calendar month, ..per day.

4. In consideration of these fees and other payments to be made by the Employer and the Contractor in accordance with Clause 6 of the General Conditions of Dispute Board Agreement, the Member undertakes to act as the DB (as member) in accordance with this Dispute Board Agreement.

5. The Employer and the Contractor jointly and severally undertake to pay the Member, in consideration of the carrying out of these services, in accordance with Clause 6 of the General Conditions of Dispute Board Agreement.

6. This Dispute Board Agreement shall be governed by the law of

SIGNED by: for and on behalf of the Employer in the presence of

Witness: Name: Address: Date:

SIGNED by: for and on behalf of the Contractor in the presence of

Witness: Name: Address: Date:

SIGNED by: The Member in the presence of

Witness: Name: Address: Date: DISPUTE BOARD AGREEMENT

[All italicized text and any enclosing square brackets is for use in preparing the form and should be deleted from the final product.]

[For each member of a three-person DB]

Name and details of Contract Name and address of Employer Name and address of Contractor Name and address of Member Whereas the Employer and the Contractor have entered into the Contract and desire jointly to appoint the Member to act as one of the three persons who are jointly called the DB [and desire the Member to act as chairman of the DB].

The Employer, Contractor and Member jointly agree as follows:

1. The conditions of this Dispute Board Agreement comprise the General Conditions of Dispute Board Agreement , which is appended to the General Conditions of the Conditions of Contract for Construction MDB Harmonised Edition published by the Fdration Internationale des IngnieursConseils (FIDIC), and the following provisions. In these provisions, which include amendments and additions to the General Conditions of Dispute Board Agreement, words and expressions shall have the same meanings as are assigned to them in the General Conditions of Dispute Board Agreement.

2. [Details of amendments to the General Conditions of Dispute Board Agreement, if any. For example: In the procedural rules annexed to the General Conditions of Dispute Board Agreement, Rule deleted and replaced by: ] ..is

3. In accordance with Clause 6 of the General Conditions of Dispute Board Agreement, the Member shall be paid as follows: A retainer fee of plus a daily fee of per calendar month, per day.

4. In consideration of these fees and other payments to be made by the Employer and the Contractor in accordance with Clause 6 of the General Conditions of Dispute Board Agreement, the Member undertakes to serve, as described in this Dispute Board Agreement, as one of the three persons who are jointly to act as the DB.

5. The Employer and the Contractor jointly and severally undertake to pay the Member, in consideration of the carrying out of these services, in accordance with Clause 6 of the General Conditions of Dispute Board Agreement.

6. This Dispute Board Agreement shall be governed by the law of

SIGNED by: for and on behalf of the Employer in the presence of

Witness:

Name: Address: Date:

SIGNED by: for and on behalf of the Contractor in the presence of

Witness: Name: Address: Date:

SIGNED by: The Member in the presence of Witness

Name: Address: Date:

PERFORMANCE SECURITY Demand Guarantee

[ All italicized text and any enclosing square brackets is for use in preparing the form and should be deleted from the final product. ]

. [Bank s name, and address of issuing branch or office] Beneficiary: Date: . .[Name and Address of Employer]

Performance Guarantee No.:

..

We have been informed that .[Name of Contractor] (hereinafter called the Contractor ) has entered into Contract No. [Reference number of the contract] dated .with you, for the execution of .. [Name of contract and brief description of Works] (hereinafter called the Contract ). Furthermore, we understand that, according to the conditions of the Contract, a performance guarantee is required.

At the request of the Contractor, we ..[Name of Bank] hereby irrevocably undertake to pay you any sum or sums not exceeding in total an amount of [Amount in figures] ( .. ) [Amount in words, see 1], such sum being payable in the types and proportions of currencies in which the contract Price is payable, upon receipt by us of your first demand in writing accompanied by a written statement stating that the Contractor is in breach of its obligation(s) under the Contract, without your needing to prove or to show grounds for your demand or the sum specified therein.

This guarantee shall expire, no later than the day of , .. [see 2], and any demand for payment under it must be received by us at this office on or before that date.

This guarantee is subject to the Uniform Rules for Demand Guarantees, ICC Publication No. 458, except that subparagraph (ii) of Sub-article 20(a) is hereby excluded.

Signature(s):

1 The Guarantor shall insert an amount representing the percentage of the Contract Price specified in the Contract and denominated either in the currency(cies) of the Contract or a freely convertible currency acceptable to the Employer. 2 Insert the date twenty-eight days after the expected completion date. The Employer should note that in the event of an extension of the time for completion of the Contract, the Employer would need to request an extension of this guarantee from the Guarantor. Such request must be in writing and

must be made prior to the expiration date established in the guarantee. In preparing this guarantee, the Employer might consider adding the following text to the form, at the end of the penultimate paragraph: The Guarantor agrees to a one-time extension of this guarantee for a period not to exceed [six months] [one year], in response to the Employer's written request for such extension, such request to be presented to the Guarantor before the expiry of the guarantee.

PERFORMANCE SECURITY Performance Bond

as Surety By this Bond ..as Principal (hereinafter called the Contractor ) and (hereinafter called the Surety ), are held and firmly bound unto as Obligee (hereinafter called the Employer ) in the amount of ., for the payment of which sum well and truly to be made in the types and proportions of currencies in which the Contract Price is payable, the Contractor and the surety bind themselves, their heirs, executors, administrators, successors and assigns, jointly and severally, firmly by these presents.

Whereas the Contractor has entered into a written Agreement with the Employer dated the . day of .., .. , for in accordance with the documents, plans, specifications, and amendments thereto, which to the extent herein provided for, are by reference made part hereof and are hereinafter referred to as the Contract. Now, therefore, the Condition of this Obligation is such that, if the Contractor shall promptly and faithfully perform the said Contract (including any amendments thereto), then this obligation shall be null and void; otherwise, it shall remain in full force and effect. Whenever the Contractor shall be, and declared by the Employer to be, in default under the Contract, the Employer having performed the Employer's obligations thereunder, the Surety may promptly remedy the default, or shall promptly:

(a) complete the Contract in accordance with its terms and conditions; or

(b) obtain a Bid or bids from qualified Bidders for submission to the Employer for completing the Contract in accordance with its terms and conditions, and upon determination by the Employer and the Surety of the lowest responsive Bidder, arrange for a Contract between such Bidder and Employer and make available as work progresses (even though there should be a default or a succession of defaults under the Contract or Contracts of completion arranged under this paragraph) sufficient funds to pay the cost of completion less the Balance of the Contract Price; but not exceeding, including other costs and damages for which the Surety may be liable hereunder, the amount set forth in the first paragraph hereof.

The term Balance of the Contract Price , as used in this paragraph, shall mean the total amount payable by Employer to Contractor under the Contract, less the amount properly paid by Employer to Contractor; or

(c) pay the Employer the amount required by Employer to complete the Contract in accordance with its terms and conditions up to a total not exceeding the amount of this Bond. The Surety shall not be liable for a greater sum than the specified penalty of this Bond. Any suit under this Bond must be instituted before the expiration of one year from the date of the issuing of the Taking-Over Certificate. No right of action shall accrue on this Bond to or for the use of any person or corporation other than the Employer named herein or the heirs, executors, administrators, successors, and assigns of the Employer. In testimony whereof, the Contractor has hereunto set his hand and affixed his seal, and the Surety has caused these presents to be sealed with his corporate seal duly attested by the signature of his legal representative, this day ..of , .. .

SIGNED ON: By:

on behalf of: ..in the capacity of: . . on behalf of: .in the capacity of: .. . .

In the presence of: SIGNED ON: By:

In the presence of: ADVANCE PAYMENT SECURITY Demand Guarantee

[All italicized text and any enclosing square brackets is for use in preparing the form and should be deleted from the final product.]

[Bank s name, and address of issuing branch or office] Beneficiary: .[Name and Address of Employer]

Date:

..

Advance Payment Guarantee No.:

..

We have been informed that ..[Name of Contractor] (hereinafter called the Contractor ) has entered into Contract No. [Reference number of the contract] dated ..with you, for the execution of [Name of contract and brief description of Works] (hereinafter called the Contract ). Furthermore, we understand that, according to the conditions of the Contract, an advance payment in the sum .. [Amount in figures] ( .. ) [Amount in words] is to be made against an advance payment guarantee.

At the request of the Contractor, we .[Name of Bank] hereby irrevocably undertake to pay you any sum or sums not exceeding in total an amount of .[ Amount in figures] ( .) [Amount in words, see 1] upon receipt by us of your first demand in writing accompanied by a written statement stating that the Contractor is in breach of its obligation under the Contract because the Contractor used the advance payment for purposes other than the costs of mobilization in respect of the Works.

It is a condition for any claim and payment under this guarantee to be made that the advance payment referred to above must have been received by the Contractor on its account number ..at [Name and address of Bank].

The maximum amount of this guarantee shall be progressively reduced by the amount of the advance payment repaid by the Contractor as indicated in copies of interim statements or payment certificates which shall be presented to us. This guarantee shall expire, at the latest, upon our receipt of a copy of the interim payment certificate indicating that eighty (80) percent of the Contract Price has been certified for payment, or on the .day of , [see 2] whichever is earlier. Consequently, any demand for payment under this guarantee must be received by us at this office on or before that date.

This guarantee is subject to the Uniform Rules for Demand Guarantees, ICC Publication No. 458.

Signature(s):

..

1. The Guarantor shall insert an amount representing the amount of the advance payment and denominated either in the currency(ies) of the advance payment as specified in the Contract, or in a freely convertible currency acceptable to the Employer. 2 Insert the expected expiration date of the Time for Completion. The Employer should note that in the event of an extension of the time for completion of the Contract, the Employer would need to request an extension of this guarantee from the Guarantor. Such request must be in writing and must be made prior to the expiration date established in the guarantee. In preparing this guarantee, the Employer might consider adding the following text to the form, at the end of the penultimate paragraph: The Guarantor agrees to a one-time extension of this guarantee for a period not to exceed [six months][one year], in response to the Employer's written request for such extension, such request to be presented to the Guarantor before the expiry of the guarantee.

RETENTION MONEY SECURITY Demand Guarantee

[All italicized text and any enclosing square brackets is for use in preparing the form and should be deleted from the final product.]

[Bank s name, and address of issuing branch or office] Beneficiary: Date: . ..[Name and Address of Employer]

Retention Money Guarantee No.:

..

We have been informed that [Name of Contractor] hereinafter called the Contractor ) has entered into Contract No. ..[Reference number of the contract ] dated with you, for the execution of .. [Name of contract and brief description of Works] (hereinafter called the Contract ).

Furthermore, we understand that, according to the conditions of the Contract, when the TakingOver Certificate has been issued for the Works and the first half of the Retention Money has been certified for payment, payment of [Insert the second half of the Retention Money or if the amount guaranteed under the Performance Guarantee when the Taking-Over Certificate is issued is less than

half of the Retention Money, the difference between half of the Retention Money and the amount guaranteed under the Performance Security ] is to be made against a Retention Money guarantee.

At the request of the Contractor, we .[Name of Bank] hereby irrevocably undertake to pay you any sum or sums not exceeding in total an amount of . [Amount in figures] ( .. ) [Amount in words, see 1] upon receipt by us of your first demand in writing accompanied by a written statement stating that the Contractor is in breach of its obligation under the Contract because the Contractor used the advance payment for purposes other than the costs of mobilization in respect of the Works.

It is a condition for any claim and payment under this guarantee to be made that the payment of the second half of the Retention Money referred to above must have been received by the Contractor on its account number at . [Name and address of Bank].

This guarantee shall expire, at the latest, 21 days after the date when the Employer has received a copy of the Performance Certificate issued by the Engineer. Consequently, any demand for payment under this guarantee must be received by us at this office on or before that date.

This guarantee is subject to the Uniform Rules for Demand Guarantees, ICC Publication No. 458.

Signature(s):

1. The Guarantor shall insert an amount representing the amount of the second half of the Retention Money or if the amount guaranteed under the Performance Guarantee when the Taking-Over Certificate is issued is less than half of the Retention Money, the difference between half of the Retention Money and the amount guaranteed under the Performance Security and denominated either in the currency(ies) of the second half of the Retention Money as specified in the Contract, or in a freely convertible currency acceptable to the Employer.

F PARENT COMPANY GUARANTEE

Brief description of Contract: Name and address of Employer:

. (together with successors and assigns).

We have been informed that (hereinafter called the Contractor ) is submitting an offer for such Contract in response to your invitation, and that the conditions of your invitation require his offer to be supported by a parent company guarantee. In consideration of you, the Employer, awarding the Contract to the Contractor, we [Name of parent company] irrevocably and unconditionally guarantee to you, as a primary obligation, the due performance of all the Contractor s obligations and liabilities under the Contract, including the Contractor's compliance with all its terms and conditions according to their true intent and meaning.

If the Contractor fails to so perform his obligations and liabilities and comply with the Contract, we will indemnify the Employer against and from all damages, losses and expenses (including legal fees and expenses) which arise from any such failure for which the Contractor is liable to the Employer under the Contract.

This guarantee shall come into full force and effect when the Contract comes into full force and effect. If the Contract does not come into full force and effect within a year of the date of this guarantee, or if you demonstrate that you do not intend to enter into the Contract with the Contractor, this guarantee shall be void and ineffective. This guarantee shall continue in full force and effect until all the Contractor s obligations and liabilities under the Contract have been discharged, when this guarantee shall expire and shall be returned to us, and our liability hereunder shall be discharged absolutely.

This guarantee shall apply and be supplemental to the Contract as amended or varied by the Employer and the Contractor from time to time. We hereby authorise them to agree any such amendment or variation, the due performance of which and compliance with which by the Contractor are likewise guaranteed hereunder. Our obligations and liabilities under this guarantee shall not be discharged by any allowance of time or other indulgence whatsoever by the Employer to the Contractor, or by any variation or suspension of the works to be executed under the Contract, or by any amendments to the Contract or to the constitution of the Contractor or the Employer, or by any other matters, whether with or without our knowledge or consent.

This guarantee shall be governed by the law of the same country (or other jurisdiction) as that which governs the Contract and any dispute under this guarantee shall be finally settled under the Rules of Arbitration of the International Chamber of Commerce by one or more arbitrators appointed in accordance with such Rules. We confirm that the benefit of this guarantee may be assigned subject only to the provisions for assignment of the Contract.

Date:

.Signature(s):

BID SECURITY Bank Guarantee

[All italicized text and any enclosing square brackets is for use in preparing the form and should be deleted from the final product.]

..[Bank s name, and address of issuing branch or office] Beneficiary: Date: .. ..[Name and address of Employer]

BIid Guarantee No.: We have been informed that ..[Name of the Bidder] (hereinafter called the Bidder ) has submitted to you its bid dated .(hereinafter called the Bid ) for the execution of ..[Name of contract] under Invitation for Bids No. ( the IFB ).

Furthermore, we understand that, according to your conditions, bids must be supported by a bid guarantee.

At the request of the Bidder, we [Name of Bank] hereby irrevocably undertake to pay you any sum or sums not exceeding in total an amount of [Amount in figures] ( .) [Amount in words] upon receipt by us of your first demand in writing accompanied by a written statement stating that the Bidder is in breach of its obligation(s) under the bid conditions, because the Bidder:

(a) has withdrawn its Bid during the period of bid validity specified by the Bidder in the Form of Bid; or

(b) having been notified of the acceptance of its Bid by the Employer during the period of bid validity, (i) fails or refuses to execute the Contract Agreement or (ii) fails or refuses to furnish the performance security, in accordance with the ITB.

This guarantee will expire: (a) if the Bidder is the successful Bidder, upon our receipt of copies of the contract signed by the Bidder and the performance security issued to you upon the instruction of the Bidder; and (b) if the Bidder is not the successful Bidder, upon the earlier of (i) our receipt of a copy of your notification to the Bidder of the name of the successful Bidder; or (ii) twenty-eight days after the expiration of the Bidder s bid.

Consequently, any demand for payment under this guarantee must be received by us at the office on or before that date.

This guarantee is subject to the Uniform Rules for Demand Guarantees, ICC Publication No. 458.

Signature(s):