MOU with AIIB

A major agreement was secured between FIDIC and the Asian Infrastructure Investment Bank (AIIB) this month.

Under the terms of the agreement, FIDIC has granted AIIB a non-exclusive license to refer to the nine major FIDIC contracts and use these standard contracts for the next five years.

This will be used for projects they finance, as well as part of the bank’s standard tender documents. The contracts include the latest 2017 Second Edition FIDIC contracts and 1999 editions, which broadly covers various interlinked aspects of international construction and infrastructure.

This agreement with the AIIB represents another significant endorsement of FIDIC contracts by a major international funding organisation. This follows on from similar agreements which have been signed in recent months with the World Bank, Inter-American Development Bank, Caribbean Development Bank and the European Bank for Reconstruction and Development.

FIDIC’s Chief Executive Officer, Dr Nelson Ogunshakin said, “We are delighted to have signed this agreement with the AIIB as it means that FIDIC has now entered into similar agreements with nearly all of the major international funding organisations. This will create more certainty in the market as by adopting the FIDIC contacts on major projects the AIIB is saying that they endorse the fair and balanced approach that these documents offer to parties on major construction contracts.”

He went on to add that, “The AIIB’s endorsement should provide additional comfort to the financial, institutional and private equity investors operating in the global market to adopt the use of FIDIC standard procurement contracts as an effective tool to mitigate the risks associated with investable infrastructure asset class.”

Zheng Quan, Director General for the Strategy, Policy and Budget department at the AIIB said, “We are very pleased that in signing this agreement it will allow the AIIB the opportunity to incorporate FIDIC forms of contract into its suite of standard tender documents which are currently under development for use by the bank’s clients. The use of FIDIC forms of contract will ensure that infrastructure contracts financed by the AIIB are fit for purpose and will be implemented in accordance with best international standards. The AIIB looks forward to further productive collaboration with FIDIC.”

FIDIC President Bill Howard was equally pleased about this new collaboration. “I’m really delighted to see this move by the AIIB. Strengthening FIDIC’s relationships with the banks and the international funding institutions will enhance our efforts to coordinate FIDIC’s engagement with the financial institutions that will benefit the whole industry. Such agreements are good for FIDIC and good for the global infrastructure sector and I look forward to a mutually beneficial relationship with AIIB and all the other multilateral development banks over the coming years.”

FIDIC has also published a briefing note to assist members looking to work with the AIIB. The note has been compiled by FIDIC’s Head of Economic and Strategic Policy, Graham Pontin. It includes valuable information about the AIIB and its mission, an outline of the bank’s project portal, its historical projects and project pipeline, as well as how to access the bank’s project and procurement information and how to get involved.