Saudi construction officials back FIDIC contracts

Application of FIDIC contracts would protect rights of local contractors and serve as a reference point for dispute resolutions

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RELATED ARTICLES: Construction the most corrupt industry in Arab countries | Rising costs threaten Saudi real-estate market | KSA construction sector critiqued for poor quality standards The application of FIDIC contracts in Saudi Arabia could solve as much as 80% of the country’s contracting sector problems, the head of the Contracting Committee at Jeddah Chamber of Commerce and Industry (JCCI) has said. Abdullah Rudwan, in a report by Zawya, said that the application of FIDIC contracts could preserve the rights of local contractors and serve as a reference for differences arising from the implementation of contracts. The International Federation of Consulting Engineers (FIDIC) is an international standards organisation that is most referred to for its FIDIC family of contract templates. He further added that the Council of Ministers had given a 180-day period, expiring in November, for the completion of the new FIDIC-compliant system, which is to be supervised by the Ministries of Commerce, Finance and Labor. Just 200,000 of the total 2.17 million workers employed in the contracting sector are Saudi, according to data released by the National Committee of Contractors, said Mohamed Al-Sa’ad, an investor in the sector. Furthermore, the number of commercial registers of the contractors stands at 280,000, of which 138,000 contractors are registered in the commercial and industrial chambers. The rate of the categorized contract firms is estimated at 0.01 percent of the total contractors, Al-Sa’ad stated. Al-Sa’ad also spoke in favor of following the global practise of creating a fund aimed at providing loans to contractors as a measure against the absence of finance facilities that led to defaulting cases. Mohamed Al-Yami , member of the contracting committee in the Eastern Region Chamber of Commerce and Industry (ERCCI) supported the implementation of the FIDIC formula due to its global application. The system equitably protected the rights of all concerned parties, and ensured the principle of compensation, specifically helping in situations where price differences existed in building materials. Contracting firms had begun receiving their financial dues from government departments, he added, and timely completion of paperwork play a huge role in the same. FIDIC is charged with promoting and publishing standard forms of contracts for works and clients, consultants, sub-consultants, joint ventures and representatives, together with related materials such as standard pre-qualification forms, added the Zawya report.

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