Leading global law firm Dentons said it led the discussion on Fidic (International Federation of Consulting Engineers) contracts at the recent Big 5 Saudi Arabia conference held in Jeddah.

The largest event of its kind in the kingdom, The Big 5 Saudi attracted more than 1,200 construction industry specialists to the Saudi city.

Despite challenging market conditions across the region, the kingdom's $732-billion construction industry is projected to remain strong as the government continues to roll out major infrastructure development programmes, said a statement from Dentons.

The adoption of Fidic-based agreements for government-led projects, such as the Haramain Rail and the Makkah Metro projects, has been a welcome development for international players.

Providing insights into the interaction between Fidic and local law in Saudi Arabia, Dentons partner and head of construction in the Middle East, Andrew Jones, said: "Adopting a localised version of the Fidic contracts will encourage parties to review and negotiate the terms. It should provide contractors with more comfort regarding their contractual rights and their risk profile."

However, Jones also pointed out that specific amendments will be required to ensure contract terms comply with Saudi Arabian law.

Agreeing with Jones, Dentons Jeddah-based partner Anas Akel said: "There will be certain provisions in local law, as well as local norms, that signing up to a Fidic contract will not be able to overcome."

However, both agree that the increased adoption of Fidic-based agreements has helped to allay contractors historical concerns regarding unfavourable terms for major projects.  

Major infrastructure projects, such as the planned metro works and health facilities investment, help to deliver a certain amount of economic diversification which is a key driver for Saudi Arabia, he added.-TradeArabia News Service