FIDIC-ITA Task Group 10

Presentation of Task Group 10, Contract Form for Tunnelling and Underground Works

• Two votes• Why a specific Contract Form?• Which aspects require particular attention?• What is ITA-AITES?• Who is Task Group 10?• When will the Contract Form be ready?

World Urban Population 1950 (UNICEF)red: >75% urban, yellow: >50% urban, blue: >25% urban

World Urban Population 2000 (UNICEF)

World Urban Population 2050 (UNICEF)From 1950 to 2050 the world’s population will grow from 3 to 9 billion.

In the same time, urban population will grow from 1 to 7 billion!

Why a specific Form of contract for Underground Works?

• Underground is a growing market:– Energy– Transportation– Urban infrastructure– Space shortage in cities

Risk allocation

R := Ee x pe

R=Risk; Ee= Effect of an event; pe=probability of the event

Risk allocation

• R := De x pe

• Bid requires an estimate of the risk

• Underground works are related to risks that are difficult, if not impossible, to estimate

• In order to cover all risks reasonably, the price and therefore the cost of investment will inevitably rise.

• The allocation of risk to one party is uneconomic.

Risk allocation

100% Employer 100% Contractorfair = economic

Cost

Why a specific Form of contract for Underground Works?

• Underground is a growing market:– Energy– Transportation– Urban infrastructure– Space shortage in cities

• Underground is different from other works in terms of risk management and allocation

Which aspects require particular attention?

1. Each risk shall be allocated to the party that is fittest to control it, in order to get best value for money.

2. Information to contractors on ground conditions (careful investigation, full disclosure).

3. Production cost depends on ground behaviour during excavation, not on physical characteristics of the ground.

4. Construction time may vary according to ground conditions. To be considered in the definition of time for completion.

5. Expensive equipment means high investment by the contractor and therefore high time related costs.

6. Best practice!

(ita-aites.org)

• International Tunnelling and Underground Space Association• Founded in 1974, today 71 member Nations and 310 affiliate

or corporate members• Recognized by the UN• Structured +/- like FIDIC (though smaller)• Working Group 03, “Contractual Practices”• Contacts with FIDIC since the 1990’s• Agreement reached on a joint objective• Next World Tunnel Congress: Dubrovnik, Croatia, 22.-28.5.15

Task Group 10 “Contract Form for Tunnelling and Underground Works”

• 3 members from FIDIC:– Jim Maclure (United Kingdom)– Gösta Ericson (Sweden)– Hannes Ertl (Austria)

• 4 members from ITA-AITES:– Andres Marulanda (Colombia)– Charles Nairac (France)– Matthias Neuenschwander (Switzerland), Chair– Martin Smith (United Kingdom/Corea)

• FIDIC CC tutor: Zoltan Zahonyi

Task Group 10 time line (subject to verification)

• Kick-off meeting: 9/30/2014• Proposal of approach to FIDIC/ITA: January 2015• Limited Review Draft: Autumn 2016• Final Review Draft: 6 months after receiving comments• Legal review commissioned by FIDIC CC• Test Edition• First Edition (2 years after test edition): approx. 2019• User’s Guide

Thank you for your kind attention and for contributions to the work of TG10!