1.

Appointing an Engineer
Question
Is it recommended to have in a contract based on FIDIC's Electrical and Mechanical Works Contract an external
expert acting as the Engineer? Or is there no problem in recruiting the Engineer from amongst the Beneficiary (in
our case a "public" authority)? We are signing a contract shortly. The Engineer is according to the Red Book,
Clause 2.4 Part I bound to act impartially. The question is if there is an internal incompatibility in the relationship
to his Employer.

Answer
The basis upon which the 1987 Yellow Book and Red Book is written is that the Engineer is appointed by the
Employer, but that he is independent of both parties - i.e., he is an independent third party. In many cases he is
required to give impartial decisions - in fact under Clause 2.4 of the Yellow Book he is required to act impartially
at all times when exercising his discretion. If the Engineer is an employee of the Employer - e.g., someone from
the Employer's Engineering Division - there is a big risk that he will not be in a position to act impartially.
Although he may be very experienced and capable from a technical point of view, and able to handle all
technical matters, he may not be free to make decisions which involve financial arrangements, etc. in a fair and
impartial manner. It is not impossible, nor unknown, for the Employer to nominate himself or one of his own staff
as Engineer, but it is rare and certainly causes problems. The text of any clauses referring to the impartiality of
the Engineer will probably need revising at some stage, as will the provisions for handling claims and disputes
(Clauses 2 and 50). The principle of using an employee of the Employer as Engineer would be more acceptable
if a Dispute Adjudication Board (DAB) was introduced to replace the principal provisions of Clauses 2 and 50.1
to deal with claims and disputes.