Paul Taylor considers how the restricted role of the engineer could change in the current economic climate
Dubai’s construction market has suffered significant slowdown in recent weeks and months, with suspension and cancellation of some of the most prestigious projects in the region having been widely reported. The situation has been increasingly difficult for many contractors and consultants. Liquidity and cash-flow dominate the boardroom agendas, nevertheless, many projects are still progressing, albeit at a less frenetic rate than previously and with revised programmes and budgets. It is clear that issues such as non-payment have dented confidence and reputations. It is therefore crucial that those projects move forwards on a sensible, reasonable and transparent basis.
However, one of the inherent problems of the past has not been addressed and will continue to cause difficulties – that is, the role and impartiality of the engineer.
The most widely used form of construction contract in this part of the world is the FIDIC form, either the 1987 or new 1999 version. As a form of contract drafted and promoted by the one of the world’s largest engineering representative bodies, it is entirely to be expected that the engineer under that contract form holds a key role, crafted to allow professional and impartial decisions to be made with integrity.
However, such has been the erosion of that theoretical position, that many in the industry now see the engineer as nothing more than an extension of the employer’s organisation and accordingly, all decisions are viewed as have been influenced or instructed by the employer.
The original FIDIC contract intended engineers to be impartial when making any decisions, however, over time with a series of employer-instigated amendments, this role has been altered and the engineer is now required to seek employer approval before making any decisions of substance, particularly in relation to extension of time, additional costs, valuation and claims. Moreover, certain functions have been transferred across in some cases to the project manager or employer’s representative, leaving the independent engineer little more than a toothless tiger. In addition, the fact that engineers are employed and paid by the employer and the fact that they presumably wish to continue to be employed, means they have a very different role to those with more cyclical jobs.
In this climate of non-payment and non-certification, moving the role of engineers beyond their current position, confidence and credibility could be a major factor in restoring the balance that those who drafted the FIDIC contracts intended.
It could be argued that these concerns about the role of the engineer have been recognised by FIDIC and the introduction of dispute adjudication boards and replacement of traditional engineer’s decisions in the standard forms are evidence of that change of mindset. However, as long as employers continue to fetter the engineer’s discretion by insisting on a variety of scenarios in which he cannot act without express approval, the engineer will continue to be viewed in certain quarters as nothing more than a puppet on a string.
A step in the right direction might be to hand back to the engineer the role that was originally intended under most standard forms of contract and try to rebuild trust and confidence in the role of the engineer. In the current market, a credible certified payment certificate from an impartial engineer would seem very much more persuasive in unlocking payment issues and ultimately would be very much more convincing if the matter ever ended up before a judge or arbitrator.
But then, that scenario pre-supposes that those employers who are obliged to make such payments are also happy to release or relax the current controls that they have over the engineer under the heavily amended contract forms that at presently used. Changing that mindset is perhaps the starting point of the whole exercise.
By Paul Taylor is a partner in HBJ Gateley Wareing in Dubai