Johannesburg Partners, Tania Siciliano and Danielle Van Der Vaart, and Project Finance Executive, Arnold Sagonda, discuss the advantages offered by FIDIC contracts for infrastructure projects financing in an article published in Infrastructure News.
They outline the key differentiators between FIDIC contracts, which offer a broad suite of internationally recognised agreements, compared to the JBCC contracts that are widely used in South Africa for local building works.
Partner Tania Siciliano explains that some private sector players find FIDIC contracts daunting due to their length and complexity.
“However its detail is precisely what makes it valuable. FIDIC goes further than most contracts in defining where risk lies. That clarity makes it easy to litigate on and for clients to understand where risk is allocated,” said Tania Siciliano.
Partner Danielle Van Der Vaart outlines the advantages for parties involved in large infrastructure projects of using a standardised, globally tested template.
“As a standardised template, FIDIC contracts have been applied and tested globally and are widely trusted. While each country has its own legal and regulatory nuances, these can be addressed by adding project, or jurisdiction-specific clauses, to adapt the standard form to local requirements,” stated Danielle Van Der Vaart.
For his part, Project Finance Executive Arnold Sagonda explains that a growing number of players in the infrastructure space understand the advantages of using FIDIC for their projects.
“The market has matured. Users understand that JBCC doesn’t suit every project, and that FIDIC is the benchmark for large-scale, lender-financed infrastructure,” said Arnold Sagonda.
