We inform you that GD Granit AD, as the leader of the group of bidders, GD Granit AD Skopje and Rapid Bild DOO Kumanovo, has signed a Contract with the Joint Stock Company for performing energy activities MACEDONIAN ENERGY RESOURCES SKOPJE in state ownership.

Subject of the Contract is Construction of the main gas pipeline section Negotino (Kavadarci) – Bitola.

The Contract value without VAT included is 2.239.000,00 MKD, with a term of execution 36 months.

The Law Firm of the year 2016 – Pinsent Masons from London, trough one of the leading lawyers in the world, regarding construction matters, Mark Harris, Senior Partner, is coming in Skopje on 19 October.

No need of hype, he is not coming to defend or represent someone in court, he is coming together with his colleagues Georgina Reynard, Senior Associate, and Charles Blamire-Brown, Senior Associate, to moderate the first FIDIC Contracts training in Macedonia.

FIDIC is international Federation of engineers – consultants, founded in Geneva in 1913 and is currently represented in 97 countries, 60.000 construction companies and more than 1.500.000 professionals.

FIDIC is responsible for the codification (production) of one of the most utilized standardized form of Contracts regarding international civil construction projects in the world.

In this particular moment, in the world, as most used is the FIDIC contract – 1999 edition, but FIDIC is currently involved in the process of changing the condition of the contracts, and the participants in this training will have the opportunity, first – hand to learn about them.

One of the main goals of FIDIC is making choice and decision based on quality and no lowest price, which is why, in 2011 FIDIC published Guide for selection based on quality and Guide for procurement.

Pinset Masons is Associate FIDIC member and they are official consultants for the European International Association of Contractors. They are big international law firm with over 200 lawyers on three continents, in different jurisdictions and legal systems.

Mark Harris is one of the leading lawyers regarding civil construction matters and infrastructure projects, and one of the best 500 lawyers in England. He has over 25 years of experience in advising investors, contractors and consultants for procurement in Europe, Middle East, Africa, USA, Asia and Australia. He is known as expert for managing and resolving complex disputes. He also has experience in Committees for dispute resolution in international arbitrations, as International Chamber of Commerce in Paris, London Court for International Arbitration and UNICITRAL.

This training is organized by Construction Company Granit Stock Skopje on 20 October in M6 Educational Center in Skopje.

This is introduction training and is ideal for anyone who is involved, anyhow in construction projects in Macedonia, in the region and in internationally. As part of this training, there will also be a workshop, where the theoretical knowledge will be put in practice.

Big infrastructural projects may end with dispute and occasionally their resolution means long and expensive court or arbitrational proceedings, which’s whom final result is lost money and time for all parties.

In today’s world, among the civil construction companies, it is widely accepted the principal of “claim avoidance” instead of “dispute resolution”.  The “Claim avoidance” means hiring professionals for administration and management of contracts and procurement in the process of execution of the Project, and no hiring professional after escalation of the dispute.

One of the most interesting cases of professional administration in FIDIC contract is one of the biggest infrastructural ventures in the world – Panama Canal extension (Time of completion – 11 years, Built Concrete Cubic – 4.4 million, contracting price – 5.25 billion dollars). For this Project it was used FIDIC Contract (popularly known as – yellow book), where the Contractor not just for the construction, but also for the design. The extension of Panama Canal is 80 km, where currently are accounted 5% from the world trade. That is why it is said that this extension enabled doubling the capacity of the channel, because larger ships can use it also.

In the tendering procedure, the battle was between 3 consortiums. The Criteria for Selection of best awarded Bidder was: 55% – technical capabilities and 45% – price. As Best Bidder was selected consortium with leading contractor from Spain.

In the beginning of 2014, during the construction, dispute raised in connection with unexpected expenses in amount of 1.5 billion dollars. The Contractor hold the position that the Employer (Investor) did not make enough geological research on the land under which the extension of the channel should have been built, which in the end resulted with higher expenses for construction of the same. The Employer (Investor) on the other hand hold the position that the Contractor failed to submit sufficient evidence in favor of his claim, but at the same time the Investor declared that he will consider Contractor’s compensation claims because they were submitted in accordance with the mechanisms and conditions of the Contract. At that time, the Employer had already paid to the Contractor an additional 160 million US dollars as additional costs due to elevation in the prices of iron fittings, diesel, cement and labor.

Similar examples can be found in many construction projects like:

·         Three Gorges Dam in China – the biggest dam in the world (Time for completion – 17 years; Price – 22 billion dollars)

·         Tunnel Marmara in Turkey – connection between the Europe and Asia ( Length 47 miles under the sea; Time for completion – 9 years; Price – 4.5 billion dollars);

·         New Trade Center in New York – tallest building in the western hemisphere (Time for completion – 7 years; Price – 3.8 billion dollars);

And mutual for all these projects is that they are all financed by huge investment banks through standardized tip of contracts.

Key for success of these Contracts in international frame is in the balanced approach to the roles, responsibilities and obligation of the contracting parties, as well as the resource allocation and risk management.

One of the specific characteristic of the General Conditions of the Contract is the equality between the parties, which means that during the execution of the works, in case of misbalance of risks between the parties, there are mechanisms in the Contract that can level back the risks

The General Condition of FIDIC Contracts are accepted and harmonized with The World Bank, European Bank for Development and Reconstruction and European Investment Bank.

It is very important that in Macedonia, the biggest construction company, with yearly experience in civil construction and infrastructural projects in the country and abroad, is organizing this training in order to share its knowledge and experience.

Denis Rizaov

L.L.B.

FIDIC Contracts manager&claim manager at Construction Company Granit Stock Skopje

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