Experts Mull FIDIC Membership at Forum

By Natalya Smolentseva

The St. Petersburg Times

Published: October 24, 2012 (Issue # 1732)

Possible Russian participation in the International Federation of Consulting Engineers (FIDIC) was the main item on the agenda at a roundtable discussion at the ITAR-TASS press center in St. Petersburg last Wednesday.

Russia’s recent entry into the WTO has made integration into the world engineering market a priority, and gaining membership of FIDIC would be a significant step forward for the country’s engineering sphere.

The biggest international organization in the field of construction consulting, FIDIC unites 94 national associations around the world. FIDIC’s forms of international contracts are the most widely used in the global consulting engineering industry, and include World Bank projects. Russia is one of the few states that don’t support the FIDIC system.

Enrico Vink, managing director of FIDIC, spoke at the discussion about the benefits membership of the organization would bring Russia, including the advantages of using FIDIC-approved independent engineer-consultants.

“There are a lot of engineers in the world who can design whatever you want. But after graduating from engineering institutes they still need to educate themselves in order to understand all the broadening business issues including management and supervision,” said Vink, explaining the difference between a planner engineer and an engineer-consultant. These specialists can work as technical advisors on the financial part of a project to reassure sponsor organizations that everything is going according to plan, or as independent experts in court to ascertain whether any technical mistakes have been made during the realization of a project, thereby they can be of use at various stages of the realization of a contract.

“The majority of national consulting systems mostly pay attention to one part of the contract, whereas FIDIC contracts are considered to be more balanced,” he added.

A number of companies with positive experience of working with FIDIC contracts also participated in the discussion. Denis Kachkin, managing partner of the Kachkin & Partners law firm, said that FIDIC contracts are indispensable when foreign banks are involved.

“The use of FIDIC contracts today causes some difficulties for two basic reasons: Firstly, the contracts require adaptation to the Russian legal system, and secondly, the use of these contracts in Russia requires professionals who will be able not only to write the contract but also bring it to realization,” said Kachkin.

The problem of adapting FIDIC contracts to the Russian legal system was highlighted by all speakers.

“As long as there are no changes on the federal level, all projects will be subject to examination in accordance with Russian law,” said Stanislav Logunov, director of the St. Petersburg Center of State Expertise.

The process of shifting responsibility for examination of the projects from state structures to private business has already started.

“If the customer is ready to take responsibility not only for the period of realization, but for the whole life cycle of the construction, the renunciation of obligatory expertise is possible,” Logunov said.

“Only through the use of FIDIC contracts can we bring dialogue with foreign partners to another level,” said Alexander Odinokin, a representative of the Okhta Social and Business Center. He also commented on the difficulty of finding engineer-consultants competent both in the international and Russian construction sectors.

The main purpose of consulting is minimization of the charges and implementation of the contract by both sides. Answering a question about the cost of such consulting services, Vink was evasive, but Logunov said that according to his international experience it is typically around 2-3 percent of the total cost of a project.

Members of FIDIC are also required to adhere to the FIDIC charter on the ethical norms and professional behavior of consultant-engineers, guaranteeing high standards of education for specialists.

The question of forming a professional institute of engineer consulting in Russia that could be formalized into a national association with membership in FIDIC was also raised at the discussion.