FIDIC Workshop WS 12, Beijing Conference

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FIDIC Workshop WS 12, Beijing Conference

• Design Build Operate
• a new Contract
• Wednesday, 7th September 2005
• Dipl.-Ing., Dipl.-Wirt.-Ing. Axel-V. Jaeger, EC
  Member NEK Ingenieure, Berlin, Germany

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FIDIC DBO ( Definition )

• The Design Build Operate approach
• combines design, construction, long term plant /
  
• facility operation and maintenance into a single
  
• contract, with one legal entity, known as the
• Contractor.

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FIDIC DBO Format

• green field scenario
• a sequence of Design Build Operate
• brown field scenario
• a sequence of Operate Design - Build

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CONDITIONS OF CONTRACT
published 1999
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FIDIC DBO Motivation

• Time Schedule Advantages
• Financial Compliance
• Single Point of Responsibility
• Allocation of Project Risk
• Fitness for Purpose

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Design Build Operate Organisation
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DBO FLOW CHART(Typical Sequence of Principle
Events)
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DBO FLOW CHART ( TIMELINE PART 1 )
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DBO FLOW CHART ( TIMELINE PART 2 )
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FIDIC DBO Independent Auditor

• Appointment of an Independent Auditor is a
  common practice globally for compliance with
  Quality Assurance procedures . ( Performance
  Criteria )
• It is required to assess the Contractors
  Performance in carrying out the Contract, and
  also to examine the Employers Management and
  Monitoring of the Contractor.
• Defects in the performance of both the
  Contractor and the Employer will be identified
  and addressed.

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FIDIC DBO Asset Replacement Fund

• In order to ensure that the condition of the
  Plant in the Works is properly maintained,
  replacement of major items of Plant will be
  required over the Contract Period.
• Therefore capital sums will be need to be
  expended throughout the Operation and Maintenance
  Period.
• This money will be held as an Asset Replacement
  Fund.

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FIDIC DBO Asset Replacement Fund

• Monies provided under the DBO Contract on the
  schedule presented by the Contractor, specifying
  the major items of Plant to be replaced and
  timing and cost of such replacement.
• The following cost are excluded
• Routine maintenance items
• Correction of defects
• Replacement of Plant and Material which have a
  life expectancy of less than (5) to 7 years
• Providing spares between scheduled dates for
  major plant replacement
• Replacement of Plant and Materials not
  identified in the schedule of major plant items

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FIDIC DBO Maintenance Reserve Fund

• The Maintenance Reserve Fund is required to
  provide an incentive to the Contractor to ensure
  that the Works are in proper condition at the end
  of the Operation and Maintenance Period.
• Definition
• A retention of 5 from payments due to the
  Contractor in the last five years of the
  Operation and Maintenance Period, up to a
  contracted ( capped ) amount, to be released
  after issuing the Contract Completion Certificate.

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FIDIC DBO Facility Management Plan

• The Facility Management Plan means the
• operation and maintenance methodology
• submitted by the Contractor with his Tender
• and the requirements are as detailed in the
  Employers Requirements.

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FIDIC DBO Variation / Change Management

• Typically, it is anticipated that the following
  must be provided for i.e.
• Changing load
• Major industry ( arrival / departure )
• Technical obsolescence
• Increased performance standards
• Interaction with networks managed by others
• Changes legislation
• Contractor goes into liquidation
• Failure to meet performance standards

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DBO FLOW CHART ( TIMELINE PART 2 )
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FIDIC DBO Joint Inspection

• The Employers Representative and the Contractor
  shall carry out Joint Inspection on the condition
  of the Works identifying maintenance works,
  replacements and other works.

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FIDIC DBO Final Inspection

• The Contractor shall notify the Employer that
  the Works are complete and ready for Final
  Inspection.
• After issuing the Contract Completion
  Certificate when passing the Final Inspection
  satisfactory the Employer shall be responsible
  for the care, safety, operation, servicing and
  maintenance of the works.

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FIDIC DBO Risks

• One of the advantages of the DBO approach is the
  value for money achieved through effective risk
  allocation.
• The Employers and Contractors risks have to be
  clearly defined.

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DBO FLOW CHART(Typical Sequence of Principle
Events)
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FIDIC DBO CC Questions Word and Content

• Facility Management Plan to assist and advise
  on the management and monitoring of the
  operation and maintenance of the facilities
  provided
• Asset Replacement Fund to ensure proper
  condition of Plant in the Works over the O M
  Period
• Maintenance Reserve Fund to provide an
  incentive to ensure that the Works are in proper
  condition at the end of O M Period
• Independent Auditor issues on compliance process
  in relation to the operation and performance
  criteria
• 5. Which colour for the DBO Conditions of
  Contract golden ?