FIDIC Conditions of Contracts A kind of International Language for Communication

1. Experience of EU Funded Projects in Estonia by Using FIDIC Conditions of Contracts and National Procurement Law • Lembit Talli • Head of Department • Pre-investment and Environmental Studies • E- mail: Lembit.Talli@sweco.ee; • Address: Sõpruse puiestee 145, 13417 Tallinn • SWECO Projekt AS

2. Experience of EU Funded Projects in Estonia by Using FIDIC Conditions of Contracts and National Procurement Law • FIDIC Conditions of Contracts • A kind of International Language for Communication • Employers, Engineers and Contractors • Administrators, Managers and Lawers • Different Countries and Nationalities • Most practicable knowledge of Tendering and Contracting • A System of Commonly Understood Conditions • Used Intenationally as well as Nationally

3. Experience of EU Funded Projects in Estonia by Using FIDIC Conditions of Contracts and National Procurement Law • The content of Current Presentation: • A brief look into an Estonian practice of EU funded infrastructure projects, based on a • Personal practice and observations • Public Services of Estonia • European Commission • International and National Consultancy

4. Experience of EU Funded Projects in Estonia by Using FIDIC Conditions of Contracts and National Procurement Law • EU funding in Estonia • EU Phare Programme • Framework Agreement signed in December 1991 • New pre-accession instruments Since 2002 • ISPA and SAPARD • After accession (2004) • Structural Funds, Cohesion Fund

5. Experience of EU Funded Projects in Estonia by Using FIDIC Conditions of Contracts and National Procurement Law • Stages of EU funding procedures • Centralised System • Decentralised System • Public Procurement

6. Experience of EU Funded Projects in Estonia by Using FIDIC Conditions of Contracts and National Procurement Law • Examples of projects implemented: • Vormsi WWTP and Sewage system (Phare CBC, FIDIC Red) • Pandivere water protection area (Phare CBC, FIDIC Red) • Paide, Rakvere, Rapla water supply (Phare National, FIDIC Orange) • Keila WWTP (Phare CBC, FIDIC Red) • Jõgeva WWTP (Phare CBC, FIDIC Red) • Kuressaare Sewage and water supply (Phare CBC, FIDIC Red) • Rakvere Sewage and water supply (Phare CBC, FIDIC Red) • Tartu tunnelcollector (ISPA) • Viljandi ja Narva WWTP (ISPA) • Kuressaare, Pärnu, Valga WWTP (Phare National) • Kuressaare Yacht Harbour (FIDIC Red) • Keila Paldiski road (R 19) (FIDIC Orange) • Sillamäe radioactive tailings bond (FIDIC Orange, Yellow, Short Form) • Hazardous waste management – Tallinn, Vaivara (FIDIC Red); • Etc.

7. Experience of EU Funded Projects in Estonia by Using FIDIC Conditions of Contracts and National Procurement Law • National Procurement Law: • First public Competition – 1927 • First Public Procurement Act – 1934 • No Public Procurement – up to 1995 • First Modern National Procurement Law – 1995 (effective 1996)

8. Experience of EU Funded Projects in Estonia by Using FIDIC Conditions of Contracts and National Procurement Law • Public Procurement Procedures at present • Public Procurement Act – 1-st May 2007 • (Amended 28 March 2008) • Government Regulations • Minstry of Finance – responsible • State Public Procurement Register and Tenders Electronic Daily (TED) • (https://riigihanked.riik.ee) • Public Procurement Office • Public Procurement Appeal Committee

9. Experience of EU Funded Projects in Estonia by Using FIDIC Conditions of Contracts and National Procurement Law

10. Experience of EU Funded Projects in Estonia by Using FIDIC Conditions of Contracts and National Procurement Law

11. Experience of EU Funded Projects in Estonia by Using FIDIC Conditions of Contracts and National Procurement Law • Practice of the use of FIDIC: • FIDIC Conditions of Contracts are widely used in Estonia • The importance of availability of FIDIC Documents in Estonian is growing • It must be noted that the translation was a difficult task. Commonly used terms in construction business in Estonia (in Estonian )do not necessarily fit to those of FIDIC. There is some time needed for harmonization.

12. Experience of EU Funded Projects in Estonia by Using FIDIC Conditions of Contracts and National Procurement Law • Problems encountered: • Collected within a very short period just in order to compile this presentation) • General little knowledge about FIDIC CC • Decentralised implementation system of infrastructure projects – Employer (Local Municipality) has got task to compile procurement documents once per 5-6 year • Lack of training and especially training in Estonian • Lack of National competent expertise • High cost of available competent expertise • Contradictions between FIDIC CC and National legislation or other regulations • Bad understanding of sharing of responsibilities within the procurement and contract procedures • No analysis of links between FIDIC CC and local legislation • The role of Engineer, Employer’s Representative Employer and Employer’s Project Manager not clear • No experience of DAB

13. Experience of EU Funded Projects in Estonia by Using FIDIC Conditions of Contracts and National Procurement Law • More specific issues: • The role of owners’ supervision is important. In case of Red Book its role according to the contract quite limited because of Cohesion Fund Regulations • Works (usually) are not completed in time – The Employer is not competent to use or apply FIDIC Conditions of Contract in this case = The Contractor “overplays” the case • The owners’ supervisor (FIDIC Engineer) is the only hope of the Employer… But sometimes there is the lack of full trust of the Engineer • By using FIDIC General Conditions one must be very careful in drafting the Special Conditions and the Appendix – the experts are interpreting certain FIDIC clauses differently • The VAT Act is not in line with the FIDIC Contracts idea and contents

14. Experience of EU Funded Projects in Estonia by Using FIDIC Conditions of Contracts and National Procurement Law • Practical steps for the near future: • Translation of FIDIC documents • How FIDIC CC fit with local legislation • Training in Estonian

15. Experience of EU Funded Projects in Estonia by Using FIDIC Conditions of Contracts and National Procurement Law • Role of National Member: • EAACEC - Estonian Association of Architectural andConsulting Engineering Companies • More activities to promote, to train trainers, to establish national experts’ lists, etc. • Introduction and availability of FIDIC Documents • Arrangement of training • Establishment of Expert Panel • Esonian experts participating at international trainings

16. Experience of EU Funded Projects in Estonia by Using FIDIC Conditions of Contracts and National Procurement Law • Beginning of EU funding in Estonia since 1991 • 1992 – 1996 Ministry of Finance, Foreign Assistance Department, Desk Officer for the UNDP, EC Phare Cross- Border Co operation and Multi-Country (Regional) Programmes, Bilateral Co-operation with USA and GB; • 1996 – 2000 EC Phare CBC PIU Baltic States, Project Manager in Estonia (East-West Consulting Ltd. Belgium); • 2000 – 2005 EC Delegation/Representation in Estonia, Task Manager for EC Phare Environment, Transport and Energy, Cross-Border Co- operation, ISPA; • 2005 – today SWECO Projekt AS, Head of Department, Pre-investment and environmental studies

17. Experience of EU Funded Projects in Estonia by Using FIDIC Conditions of Contracts and National Procurement Law • Thank You!