INTRODUCTION

A number of the Multilateral Development Banks (MDBs) have for many years adopted
the FIDIC Conditions of Contract for Construction as part of the Standard Bidding
Documents which the MDBs require their borrowers or aid recipients to follow. In
using the FIDIC Conditions it has been the regular practice of the MDBs to introduce
additional Clauses in the Conditions of Particular Application (or “Particular
Conditions”) in order to amend provisions contained in the FIDIC General Conditions.
These additional clauses in many cases have standard wording which has to be
repeated whenever procurement documents are being prepared for a new project.
Furthermore, the provisions in bid documents, including the additional clauses
contained in the Particular Conditions, varied between the MDBs, and this created
inefficiencies and uncertainties amongst the users of the documents, and increased
the possibilities for disputes.

These problems were recognised by the Heads of Procurement (HOPs) of the MDBs
as significant, as were the benefits of standardisation. In response, the HOPs resolved
to harmonise their bid documents on an international basis, by making use of the
FIDIC General Conditions. For this purpose, the HOPs further resolved that there
should be a modified form of the FIDIC Conditions of Contract for Construction, 1st
Edition 1999, in which the General Conditions would contain the standard wording
which previously has been incorporated by MDBs in the Particular Conditions.

FIDIC also recognised the major benefits to the users of the contracts of
harmonisation and the inclusion in the General Conditions of the main common
changes required by Particular Conditions in MDB contracts. Accordingly, the
Federation was pleased to work with the HOPs to produce this MDB Harmonised
Edition of the 1999 Conditions for MDB financed contracts.

It is believed that the modified, or harmonised document, will simplify use of the FIDIC
Conditions of Contract not only for the MDBs and their borrowers, but also for others
involved with project procurement, such as consulting engineers, contractors and
contract specialists working on MDB financed projects.

Use of the harmonised conditions should significantly reduce the number of additions
and amendments to be included in the Particular Conditions. Nevertheless, most
projects will have special requirements which will necessitate some specific changes.
This harmonised document therefore contains provision for Particular Conditions, as
has become the practice in other FIDIC documents. This MDB Harmonised Edition
also includes sample forms for Contract Data (Particular Conditions - Part A),
Securities, Bonds, Guarantees and Dispute Board agreements.

In general, this harmonised document follows earlier FIDIC risk sharing principles for
the types of contract for which they were prepared. In most cases, the amendments
which have been made to produce the MDB Harmonised Edition of the FIDIC General
Conditions for Construction are those arising from the requirements of the MDBs,
except for some minor changes of an editorial nature.

However, in the case of the dispute provisions contained in Clauses 20.2 to 20.8 and
in the associated Appendix, the opportunity has been taken to make other