In order to improve the efficiency of the application of FIDIC in Vietnam, Mr. Nguyen Thu Trang made a case study on Can Tho Bridge Construction Project. The objective of his study were to: (1) analyze the advantages and disadvantages of using FIDIC as a standard contract; and (2) propose recommendations for improvements.
Conclusion
The applications of FIDIC conditions of contracts for projects using ODA in Vietnam are:
- as a basis for the competent agencies of Vietnam's research, and
- update current regulations to gradually access the international practices, as well as to complete the domestic policies to make them applicable in a feasible way.
Although there are some disadvantages, in overall, FIDIC conditions of contract are clear and it demonstrates fairness to both parties, especially for contractors compared with provisions of current contract in Vietnam.
Recommendations
For improvements of FIDIC
The process of negotiating and signing contracts for ODA projects in Vietnam today is shown in the figure below.
The proposed procedure of negotiating and signing contracts is shown in the figure below.
The following contents must be specified during the contract negotiation through the Particular Conditions of Contract:
- Two parties must identify the time(s) for inspecting the overall progress. If the Contractor does not meet the required progress at such specified inspection times, then countermeasures must be taken.
- If the Engineer opined that such countermeasures submitted by contractor are not satisfactory, or the violation of progress of Contractor after being fined the maximum rate specified in the contract, the Engineer has the right to request the Employer to transfer a part of the contract or the whole contract to another contractor. If the cost transferred to the new contractor is higher than that in the contract of the contractor to be replaced, the replaced contractor has to bear such cost.
- In order to ensure strict management of quantities in the contract, construction diaries must be accurate, specific and confirmed by the Engineer, so that, when disputes arise, their solution will be based on such diaries.
The Employer need to provide sufficient basis to convince the Sponsor to agree when reviewing the contract
For improvements of Vietnamese Regulation of Contract
Currently, the Decree No. 48/2010/NĐ-CP dated 07 May 2010 issued by the Prime Minister applied in all projects under Government’s Budget. Comparison of some Clauses between FIDIC and Decree 48 showed in the table below.
Some recommendations to improve the implementation contract under this Decree:
- Responsibility of Employer: need to specify in detail and perform strictly during contract implementation.
- Variation Procedure: The Executing Agency (Ministry) needs to expand the authorization to IA and Engineer on this issue to shorten the process.
His thesis abstract is copied and posted.
Abstract
Official Development Assistance fund (ODA) has brought a major change for transportation infrastructure system in Vietnam, starting in the early '90s. Rural transport systems, provincial roads and national highways, expressways, major bridges has really brought a new face for the transportation system, connecting and promoting the economic development of many regions nationwide.
The management and effective use of these funds are the issues that the Government always attaches importance because it not only brings economic and social efficiency, but also to create credibility with donors as ODA loans to low interest rates with aimed at "Development Assistance".
