On May 7, 2019, the International Federation of Consulting Engineers (FIDIC) released a new form of contract for tunneling and underground works called the “Conditions of Contract for Underground Works (2019 Emerald Book)”, which was drafted in collaboration with the International Tunneling and Underground Space Association (ITA-AITES).
The new Emerald Book is based on the Second Edition of the Conditions of Contract for Plant and Design-Build, 2017 (the Yellow Book 2017), and reflects the fundamental principle of FIDIC Contracts, which is balanced risk allocation between the parties. It also includes several new concepts regarding the risks particular to underground construction works which derive from the geological, hydrogeological and geotechnical properties of the ground, and as well as from the uncertainty of the ground behavior. As a consequence, unique contractual risks appear in relation to the applicability of construction, time and cost.
In that regard, the Emerald Book includes and addresses the following issues:
- Disclosure of available geological and geotechnical information.
- Inclusion of “Unforeseeable Physical Conditions” clause.
- A flexible mechanism for remuneration according to ground conditions.
- Time for completion is mainly influenced by ground conditions, as well as with the cost of excavation and lining works.
- Risk allocation.
- The “Geotechnical Baseline Report (GBR)” which is the contractual source of risk allocation, in which any subsurface physical conditions not addressed will be deemed unforeseeable.
The Emerald Book is expected to be widely used in energy, transport and urban infrastructure projects. Although the interests of the parties may vary in each project, the Emerald Book is also expected to be an important guide in relation to the risk allocation for time and cost.
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