BuildLaw Issue 38 December 2019 | Page 12

Introducing the fidic emerald book
by claudia russell, christine worthington, victoria peckett and ian mccann
Earlier this year FIDIC released its new “Emerald Book” – Conditions of Contract for Underground Works. This addition to the FIDIC suite seeks to fill a gap amongst standard forms as a specialist contract for use on underground projects, including tunnelling works. We provide an overview of the key features of the Emerald Book below.
A new approach to risk allocation
The Emerald book sets out a distinctive approach to risk allocation designed specifically with underground projects in mind. In particular:
• Risk allocation is based on a Geotechnical Baseline Report (“GBR”) and a Schedule of Baselines and Geotechnical Data Report (“GDR”).
• The intention is that Employer should carry out significant investigations prior to tendering the works to obtain as much information as possible regarding subsurface risk (including water risks).
• Foreseeable risks (i.e. those risks identified in the GBR) are allocated to the party best placed to manage them.
• The Employer takes the risk associated with conditions worse than those set out in the GBR, but also gets the benefit where conditions are more favourable than those set out in the GBR – the Time for Completion time can be shortened and the Contract Price reduced.
• The Contractor assumes the risk of delivering the works where conditions are as per those expected in the GBR – the Contractor designs the works in accordance with the GBR and the Employer’s Requirements.
• Anything outside the scope of GBR is deemed to be Unforeseeable, entitling the Contractor to additional time/money.
• The Contractor is required to complete and maintain a Contract Risk Register and prepare and maintain a Contract Risk Management Plan (concepts familiar from the NEC suite of Contracts) – recognition that much can go wrong in projects of this nature.
Excavation and lining works
• Specific provision is made for excavation and lining works:
• These works are recognised as being a key part of the Works themselves, and difficult to accurately scope out/quantify at tender stage.
• These works are therefore paid for on a remeasurement basis - rates and prices are set out in the Bills of Quantities.
• These are divided into Fixed rate items, Time related rate items and Quantity related rate items.
• These rates also allow a mechanism for valuation of prolongation costs in the event of Unforeseeable subsurface conditions being encountered.
Payment and performance security
• The Contract provides for an Advance Payment Guarantee as well as Performance Security being delivered by the Contractor. Advance payments are likely to be necessary where high value plant is to be paid for up front.