Jeddah, 27 March 2016
Dentons led the discussion on FIDIC contracts at the recent Big 5 Saudi Arabia conference. Now the largest event of its kind in the Kingdom, the Big 5 attracts more than 1200 construction industry specialists to Jeddah.
Despite challenging market conditions across the region, the Kingdom's US$ 732 billion construction industry is projected to remain strong as the government continues to roll out major infrastructure development programmes. The adoption of FIDIC-based agreements for government-led projects, such as the Haramain Rail and the Mecca Metro projects, has been a welcome development for international players.
Providing insights into the interaction between FIDIC and local law in Saudi Arabia, Dentons partner and Head of Construction in the Middle East, Andrew Jones, said "Adopting a localised version of the FIDIC contracts will encourage parties to review and negotiate the terms. It should provide contractors with more comfort regarding their contractual rights and their risk profile." However Jones also noted that specific amendments will be required to ensure contract terms comply with Saudi Arabian law.
Agreeing with Jones, Dentons Jeddah-based partner Anas Akel added "There will be certain provisions in local law, as well as local norms, that signing up to a FIDIC contract will not be able to overcome." However both agree that the increased adoption of FIDIC-based agreements has helped to allay contractors historical concerns regarding unfavourable terms for major projects.
Major infrastructure projects, such as the planned metro works and health facilities investment, help to deliver a certain amount of economic diversification which is a key driver for Saudi Arabia.
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© Press Release 2016