CONTRACT CONDITIONS ANALYSIS, REDRAFTING AND COMPARISONS

Project:- Berth 9,10 & 11, MPSEZ

EFFORTS BY: NAGENDRA PATEL (UC-1707) ROSHAN PRAJAPATI (UC-2007)

Project Introduction
Name of Project: - BERTH 9, 10 & 11, MPSEZ

Name of Contractors: - Simplex

Infrastructure Ltd. Type of Project: - Marine Project Type of Tender: - Item- Rate Tender Civil cost of Project: - 280 Crores Contract Period: - 18 months [471 days]

Project Introduction
Maintenance Guarantee Period: - 5 years from

completion of Project Date of Award of Contract: - 23rd April 2010 Starting date of construction: - 10th June 2010 Estimated completion date: - 10th December 2011 Total length of Berth:-771.2 mtr. Total width of Berth:-37.65 mtr. Area developed for back up yard: - 86080 sq.m

CONDITION-I
Risk and Responsibility

CONDITION-I
ORIGINAL CLAUSE The subcontractor agrees to indemnify and hold harmless the contractor against loss or threatened loss or expense by reason of the liability or potential liability of the contractor for or arising out of any claims for damages. AMBIGUITY An indemnity clause requires that one party indemnify the other, in the event that certain expenses are incurred. This clause can significantly increase the exposure in the extent of an unexpected event or breach of the contract.

CONDITION-I
REDRAFTED CLAUSE The subcontractor will not agree to indemnify and hold harmless the contractor against loss or threatened loss or expense by reason of the liability or potential liability of the contractor for or arising out of any claims for damages. AS PER FIDIC CONDITION The Contractor shall not subcontract the whole of the Works. The Contractor shall be responsible for the acts or defaults of any Subcontractor, his agents or employees, as if they were the acts or defaults of the Contractor. It is not mentioned regarding the indemnification of the sub-contractor.

CONDITION-II
Communication

CONDITION-II
ORIGINAL CLAUSE The Contractor shall, unless it is legally or physically impossible, execute and complete the works and remedy defects therein in strict accordance with the contract to the satisfaction of the Engineer. The contractor shall comply and adhere to the Engineers instructions on any matter, whether mentioned in the contract or not, concerning the works. The Contractor shall take instructions only from the Engineer (or his delegates). AMBIGUITY The contractor may suffer a loss, if he has started the work not specified in the contract only on the basis of oral instructions of the engineer, and finally does not get approval by the Employer.

CONDITION-II
REDRAFTED CLAUSE The Contractor shall, unless it is legally or physically impossible, execute and complete the works and remedy defects therein in strict accordance with the contract to the satisfaction of the Engineer. The contractor shall comply and adhere to the Engineers instructions on any matter, whether mentioned in the contract or not, concerning the works. The Contractor shall take instructions only from the Engineer (or his delegates). In case of execution of any work commenced only on oral instructions of the Engineer which is not specified in the contract, the Contractor shall immediately start the work on the basis of the instructions and he shall get approval of the Employer in written within 7 days. AS PER FIDIC CONDITION Not mentioned in FIDIC.

CONDITION-III
Delegation by the Engineer

CONDITION-III
ORIGINAL CLAUSE All communications from Engineers Representative shall have the same effect as though given by the Engineer. The Engineer shall however retain the authority to disapprove any work, materials or Plant in the event of the Engineers Representative failing to do so or revoke the decisions / instructions issued by the Engineers Representative.

AMBIGUITY Engineer is not taking responsibility of the decisions taken by Engineers representative.

CONDITION-III
REDRAFTED CLAUSE All communications from Engineers Representative (Delegated persons), to whom duties have been assigned or authority has been delegated; shall have the same effect as though given by the Engineer. The Engineer shall however retain the authority to disapprove any work, materials or Plant in the event of the Engineers Representative failing to do so. AS PER FIDIC CONDITION However also, 1. Unless otherwise stated in the delegated persons communication relating to such act, it shall not relieve the Contractor from any responsibility he has under the Contract, including responsibility for errors, omissions, discrepancies and non-compliances; 2. Any failure to disapprove any work, Plant or Materials shall not constitute approval, and shall therefore not prejudice the right of the Employer to reject the work, Plant or Materials; and 3. If the Contractor questions any determination or instruction of a delegated person, the Contractor may refer the matter to the Employer, who shall promptly confirm, reverse or vary the determination or instruction.

CONDITION-IV
Right of Access

CONDITION-IV
ORIGINAL CLAUSE The Contractor shall afford every facility for and every assistance in obtaining the right to access for the Engineer or any of his representative at all reasonable times to the Site and to all workshops, places where materials or plant are being manufactured, fabricated or prepared. AMBIGUITY If the contractor is not manufacturing the materials or parts of the work which are being used, and he is using the materials manufactured by some other manufacturers, it is not stated that who will arrange for the permission to inspect the manufacturing facility by the Engineer, if at all it is required.

CONDITION-IV
REDRAFTED CLAUSE The Contractor shall afford every facility for and every assistance in obtaining the right to access for the Engineer or any of his representative at all reasonable times to the Site and to all workshops, places where materials or plant are being manufactured, fabricated or prepared. If materials, plant or parts of works are manufactured, fabricated or prepared in places not belonging to the Contractor, the Contractor shall organize necessary permissions from the owners of such facilities for the Engineer to inspect such places or plants where materials are manufactured, fabricated or prepared. AS PER FIDIC CONDITION The Contractor shall bear all costs and charges for special and/or temporary rights-of-way which he may require, including those for access to the Site. The Contractor shall also obtain, at his risk and cost, any additional facilities outside the Site which he may require for the purposes of the Works.

CONDITION-V
Insurance

CONDITION-V
ORIGINAL CLAUSE The Contractor shall provide, in the joint names of the Employer and the Contractor, insurance cover from the Commencement Date to the end of the Defects Liability Period, in the amounts and deductibles as stated below and the contract data, for the following. (a) Loss of or damage to the Works, Plant and Materials. (Minimum full replacement costs and additional 15% costs); (b) Loss of or damage to Contractors Equipment and other things at site (minimum full replacement costs). (c) Loss of or damage of property and personnel (other than the Works, Plant, Materials and Equipment in connection with the Contract); i.e. Third Party Insurance; and (d) Personal injury or death. (I.e. Workmen compensation policy)

CONDITION-V
AMBIGUITY The insurance cover up to the end of defect liability period is not required. After completion of the project to the defect liability period, no plan, machinery or equipments are involved; there is no need of increasing the cost unnecessarily. There is not clear statement regarding the execution of work in the absence of proper insurance cover.

CONDITION-V
REDRAFTED CLAUSE The Contractor shall provide, in the joint names of the Employer and the Contractor, insurance cover from the Commencement Date to the end of the project, in the amounts and deductibles as stated below and the contract data, for the following. Whenever defects occur during the defect liability period additional insurance shall be taken for the period of repair work. (a) Loss of or damage to the Works, Plant and Materials. (Minimum full replacement costs and additional 15% costs); (b) Loss of or damage to Contractors Equipment and other things at site (minimum full replacement costs). (c) Loss of or damage of property and personnel (other than the Works, Plant, Materials and Equipment in connection with the Contract); i.e. Third Party Insurance; and (d) Personal injury or death. (i.e. Workmen compensation policy) AS PER FIDIC CONDITION It is as per the original clause. But, it is not mentioned regarding