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FIDIC contracts: analysis of the impact of general and particular conditions on the financial risk management in Romanian infrastructure projects

Author

Listed:
  • Constanta-Nicoleta Bodea

    (Bucharest University of Economic Studies, Romania)

  • Augustin Purnus

    (Technical University of Civil Engineering of Bucharest)

Abstract

Construction projects are characterized by risks and uncertainties mainly due to technical and economic complexity. Risk management is an important tool in making decisions involving the identification and reduction, avoidance or transfer risk and uncertainties consequences of events that occurs during project implementation. For this reason, the objective of the contract between the beneficiary and the contractor is the allocation of risk. The distribution of risk in contracts for the execution of construction works was and is an ongoing challenge faced by parties having a significant impact on the type of contract is used. On the one hand, the beneficiaries tend to transfer to the contractors as many of the project risks and uncertainties, on the other hand, the contractors look to exploit any weakness contract, so as to reduce their impact on the expected profit. One of the most important risks assumed by the contractor by signing the contract which is also increasingly common in the current economic situation is the reduced financial capacity to support the project. A purely legal or purely technical interpretation is not meant to describe the complexity of issues related to implementation of construction projects. For this reason the authors have adopted a multi-disciplinary approach, which includes the legal issues related to the nature of the contract, but also the financial and technical aspects of construction projects. The paper aims to analyze how special contract clauses can influence the implementation of construction projects and in particular the financial management of contractors. The authors propose a model for analyzing the impact of FIDIC contract conditions applied on a case study of five transport infrastructure projects.

Suggested Citation

  • Constanta-Nicoleta Bodea & Augustin Purnus, 2016. "FIDIC contracts: analysis of the impact of general and particular conditions on the financial risk management in Romanian infrastructure projects," Juridical Tribune - Review of Comparative and International Law, Bucharest Academy of Economic Studies, vol. 6(2), pages 165-181, December.
    • Handle: RePEc:asr:journl:v:6:y:2016:i:2:p:165-181
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    References listed on IDEAS

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    1. Catalin-Silviu Sararu, 2014. "The interpretation of administrative contracts," Juridical Tribune (Tribuna Juridica), Bucharest Academy of Economic Studies, Law Department, vol. 4(1), pages 152-156, June.
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    More about this item

    Keywords

    risk; contract; FIDIC; time; cost.;
    All these keywords.

    JEL classification:

    • K12 - Law and Economics - - Basic Areas of Law - - - Contract Law
    • K23 - Law and Economics - - Regulation and Business Law - - - Regulated Industries and Administrative Law

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