Construction Industry, Contract Administration

Practical Aspects of Greenfield Projects in St. Petersburg

by Karina Chichkanova

In recent years St. Petersburg has earned a reputation as an investment center with numerous greenfield projects. Greenfield projects involving the construction of industrial and sports facilities, transportation infrastructure, and residential developments, are underway. In the auto industry alone, four assembly plants have been built recently or are under construction (Toyota, Hyundai, General Motors, Nissan), and component and parts suppliers have a number of greenfield projects in progress. St. Petersburg has also established a technical-innovational type special economic zone, where a number of greenfield projects relating to the creation of innovative products are underway.

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Construction Industry, Construction Law

Decennial Liability and Latent Defects Contractors’ and Developers’ Liability in Dubai

By Lisa Dale & Steven Hunt
Since the advent of Dubai’s construction boom circa 2002, fuelled by the relaxation of restrictions on property ownership by foreign nationals, thousands of new residential property units have been completed by developers and handed over to their new owners for occupation. This relatively recent phenomenon of home ownership on any significant scale has heightened the need for both contractors and developers to understand their potential legal exposure to home owners when defects begin to appear in the properties that they have either constructed or sold to them. …

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Construction Industry, Project Management

Pre Construction Stage in Projects

At this stage the project brief should be finalised, a preferred option agreed and the detailed design should be delivered within the identified parameters of cost, time and quality. Clear definition of the project is necessary in order to attain a successful outcome.
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Preconstruction encompasses the development of the detailed design, formulation of the tender documentation, undertaking the tender process and concluding the contract documentation. The choice of procurement route will determine how much of these stages overlap but by the start of this stage, a number of issues will have been addressed and actions taken, including the following:
Feasibility completed
LSC support for preferred option attained
Alternative site secured, disposals agreed
Surveys and statutory requirements concluded
Statutory authorities, utilities information concluded including consultation with the planning offices
Development cost plan prepared
Project team appointed. This should include main contractor representation as soon as is practical.
Project execution plan and programme established
Statutory Obligations
It is the duty of the design team to effect compliance with a statutory control and attain the appropriate consents e.g. consents for planning, Building Regulations, means of escape. Planning approvals can be a complex process and may require the appointment of specialist consultant to assist in attaining a successful approval.
Value Engineering
This is a process of examining the function of a building to ensure that it is delivered in the most cost effective way. It involves reviewing the design proposals at each stage of the design process to analyse whether client objectives have been achieved without over design or specification and at minimum cost. In major and complex projects this process may be best facilitated by a specialist in this field. In less complex projects this can be lead by the project manager.

At this stage the project brief should be finalised, a preferred option agreed and the detailed design should be delivered within the identified parameters of cost, time and quality. Clear definition of the project is necessary in order to attain a successful outcome. …

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Contract Administration

The curse of the bespoke amendment

by Philip Adams

I am increasingly fascinated by the extent to which clients and to a certain extent their lawyers, feel compelled to amend standard forms of contract, especially, bearing in mind the involvement of such organisations in the initial drafting. Next time you look at the Fidic Red Book for example, take a look at the ‘acknowledgements’ as these make for very interesting reading.

The ‘acknowledgements’ state that the drafts were reviewed by many persons and organisations, and that their comments were ‘duly studied by the Update Task Group and, where considered appropriate, have influenced the wording of the clauses.’ …

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Construction Industry

Building material firms adjust to price fluctuations

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Construction sector in the UAE witnessed a massive drop in costs during the past 12 months. Prices of most materials dropped by more than half compared to 2008.

Producers and distributors said they experienced a difficult year as reduced cost coupled with falling demand led to severe drop in revenues.

Most affected were ready-mix companies. Many of them had to cut their production by more than 50 per cent and send several staff on leave in order to reduce operational cost. …

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Construction Industry, Construction Law

Arbitrator Disclosures – Now Everyone Gets to Play

by Andrew Ness

U.S. courts in recent years have imposed stricter obligations on individuals sitting as arbitrators to disclose to the parties fully any facts or circumstances that may give rise to doubts about their impartiality or independence. As a result, the arbitrators’ mantra has become “disclose, disclose, disclose.” Indeed, it has become fairly common in arbitrations under U.S. law to see arbitrators making continual disclosures throughout the arbitral process as to every minor event that could possibly be seen as questionable – such as receiving a phone call from an old college friend who happens to be a partner at the same large firm as is representing one of the parties, even though the old friend is in a different city and different practice area entirely, and has no connection whatever to the pending arbitration. Under a recent change in American Arbitration Association (AAA) Construction Industry Rules, the parties and their counsel now get to play the disclosure game as well.

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Construction Industry, Construction Technology, Contract Administration

You’re Creeping Me Out – Design Creep under the FIDIC Silver Book

by Sarah Thomas

In the wake of the current downturn, employers will increasingly look for greater budget certainty under EPC or Turnkey contracts. This is where the contractor undertakes all tasks – design, construction, management etc – so that, upon completion, the employer merely needs to ‘turn the key’ and operation of the plant or building can begin immediately. The whole point is that the contractor assumes price risk in return for relative autonomy over how he delivers the project – provided of course he meets the employer’s output requirements. But often employers want not just price certainty but also to retain control over design approval and how the project is actually delivered. This can lead to claims of ‘design creep’ by the contractor when he perceives that the employer is trying to introduce design improvements under the guise of reviewing the contractor’s documents.

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Construction Industry, Construction Law

Flexible Arbitration Filing Fees Introduced by AAA

by Andrew Ness

While arbitration is often touted as being a less expensive alternative to litigation, the initial cost of initiating arbitration has always been considerably more expensive than filing in court. Typical filing fee in a U.S. court is a few hundred dollars, while administering authorities typically have filing fees in the thousands of dollars. The American Arbitration Association (AAA), self-described as “world’s leading provider of conflict management and dispute resolution services,” is known for its high filing fees that get progressively greater as the amount in dispute rises. But the AAA will now be providing claimants some relief on that front.

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Construction Industry, Construction Law, Contract Administration

Issues involved in Taxation of Construction contracts

by Sujjain Talwar

There is a lot of mystery regarding taxation of Construction activities in India. The mystery starts from the fact that a Construction contract involves both labour and material and hence, both Service tax and Value Added tax is levied on one transaction.

The process becomes more complex depending upon a number of factors such as the Scope of work, the nature of the contract, whether the contract includes any further sub-contracting, whether individual prices have been specified for each part of the scope of work and whether the contract involves off-shore and on-shore activities etc.
Let us first consider the Indirect taxes applicable on a Construction contract. As already stated above, a Construction contract involves both labour and materials. Hence, a Construction contract is liable to both Service tax and Value Added tax.

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