International Federation of Consulting Engineers

FIDIC News

July 2010
Online at FIDIC.org/news
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FIDIC
Activities
Managing Innovation programme shows great depth
The FIDIC 2010 New Delhi Conference business programme, speakers,
activities and side events testify to Incredible India's remarkable diversity andachievements.
Mexico celebrated 25th anniversary
Central and Latin American countries move closer to FIDIC following
participation in CNEC-Mexico and pan-American events.
Business

FIDIC
19-22 Sep10

Development
FEPAC Latin America round-table painted a mixed picture
A pan-America round-table held during the CNEC-Mexico 25th anniversarycelebrations highlighted cost-based selection as a severe obstacle.
Practice
Best practice procurement award launched
An international equivalent of the USIC-Switzerland procurement Best PracticeAward is planned.
Contracts
Interactive bidding documents
The multilateral development banks are implementing web-based form fillingsystems to improve the consistency of bidding documents.
Contracts for advanced project delivery
China's drafting of new national contracts and recent Multilateral Development
Bank announcements reflect the growing interest in design-build and turnkey
projects.
Industry

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Representation
Representing FIDIC in Europe
FIDIC has signed a new agreement with the European federation EFCA thatenvisages EFCA representing FIDIC in Europe to achieve greater synergy andefficiencies.

Contracts
CourseQatar
28-30 Sep10

Image
Austria celebrates 150 years of civil engineering
The vital role of engineers was celebrated to mark Austria's 150 years of theformal recognition of civil engineers.

Contracts
Conference
London1-2 Dec10

Principles
Quality
Policy on lowest price-based awards released
In response to European Union Directives, the European federation EFCA has
issued a policy statement urging clients not to use the lowest price option.
Ethics
Anticorruption legislation becomes increasingly global
With anticorruption legislation becoming more severe worldwide, legislatorsand development banks are turning to stronger reporting incentives.
Sustainability
Sustainable building metrics consolidate
The Sustainable Building (SB) Alliance, the World Green Building Council andthe UNEP Sustainable Building and Climate Initiative have signed a MoU todevelop metrics.

CoursesponsorAnnouncements
FIDIC Conferences
FIDIC International Training Programme
Taking stock at a crucial time
Executive Committee focuses on staff, subscriptions and conferences
International cooperation and committee activities reviewed
Canadian association develops networking opportunities
Members announcements

FIDIC
19-22 Sep10

FIDIC - Activities
Managing Innovation programme shows great depth [full item: 116Ac]
The FIDIC 2010 New Delhi Conference (www.fidic2010.org), theconsulting engineering industry's premier event, takes place inIncredible India on 19-22 September. Plenary sessions,seminars and workshops over three days will examine how theconsulting engineering industry is responding to the need forinnovation, how organisations are handling the consequences ofinnovation, and the approaches being developed to ensure that
innovation is managed correctly at all levels, from the projectlevel, through to firms and organisations, up to the industry
level and by society as a whole. With the consulting engineering
industry facing numerous challenges, it is vital that new trends and new tools are
fully understood, and experience shared, to be able to move forward with greater
confidence. A broad range of international speakers from both the private andpublic sectors will share their thoughts and experiences. The business programme
starts with a plenary session Delivering Innovation in Projects to set the scene
with Dr. Srikumar Banerjee, Chairman, Atomic Energy Commission, India, Harrie
Noy, CEO, Arcadis, Netherlands, Heikki Pikkarainen, President Poyry MC, Finland,
Mangu Singh, Director, Delhi Metro Rail, describing how consulting engineers andtheir partners are responding to the need for innovation.
Special conference rates for hotel accommodation have been extended up until
the conference, which takes place in the recently refurbished Vigyan Bhawan thatis strategically located in Lutyens Delhi, one of New Delhi's most beautiful districts
near the President's Estate and India Gate close to the main conference hotels.
Special feature of the conference include a special area devoted to explaining
FIDIC contracts, an extensive Young Professionals programme and a series ofcarefully selected excursions for accompanying persons. The Government of India
is fully engaged, with Smt. Pratibha Devisingh Patil (see photo), President ofIndia, who is renowned for her support of the underprivileged sections of society,opening the conference.

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London1-2 Dec10

Mexico celebrated 25th anniversary [full item: 114Ac]
CourseThe FIDIC Executive Committee participated in thesponsor
CNEC-Mexico 25th Anniversary conference that focussed
on the role of the engineer in infrastructuredevelopment. Newly elected CNEC President Mauricio
Jessurun Solomou (shown on the right in the photo with
Gregs Thomopulos, FIDIC President) spoke warmly of
the close collaboration between FIDIC and its members,
and highlighted the growing opportunities in Latin
America that offered new options for collaboration, amessage that was reinforced by Rene Ureta Quintanafrom Chile, the newly elected FEPAC President. FIDIC
has been working hard to encourage Central and Latin American countries to join,
or in some cases re-join, FIDIC, thereby strengthening industry representation inthis important region. There were positive responses from Argentina, Chile,
Columbia, El Salvador, Paraguay, Peru, and Venezuela and Brazil followed up a
few days later with an application for readmission as a Member Association. Other
proposed new members announced in the 2010 General Assembly Meeting (NewDelhi; 22 September) draft agenda circulated to members in late-July 2010 (seeNews item) were the Joint Consultative Council for the Construction Industry,
Trinidad and Tobago, as an Associate Member and the Uzbekistan Association ofConsulting Engineers as a Member Association.

Business - Development
FEPAC Latin America round-table painted a mixed picture [full item: 69De]
A round-table organised by the pan-American federation FEPAC
reviewed the challenges and strengths of Latin America's
consulting engineering industry during the CNEC-Mexico 25th
Anniversary celebrations in which FIDIC participated (see Newsitem). Rene Urete Quintana (see photo) from Chile, who waselected FEPAC President during the celebrations, reported that
Chile's recent earthquake damage had affected 80% of the
population but there were only 486 deaths, thanks to building
standards. Contrary to what some might expected the local industry had notbenefited since funding had been diverted for the immediate repair of
infrastructure. Angelo Vian, FEPAC President, reported that Brazil envisaged
massive capital investment (USD 900 billion) in the coming years, with USD 600
billion needed to maintain infrastructure. The consulting engineering industry
turnover was increasing by 10% each year in spite of the tendency to selectservice providers on the basis of price, a situation that was repeated in Mexico
according to the CNEC-Mexico President, Dr. John Del Angel Reyes. Mexico hadslipped to 19th best placed country for investment but was expected to return to
9th place with GDP growth of 4%. Notable was the public sector's weakened
ability to build infrastructure, and a proposed National Infrastructure Programme
was stalled. Similarly, legislation in Colombia did not give priority to the quality of
infrastructure projects. In El Salvador, a government deficit increasing to USD 3
billion in 2009 had reduced annual investment by 3.5% as well as the demand for
consulting engineering services. Here too, legislation that sought the lowest
priced bids needed to be changed. In Peru, GDP growth was expected to rebound
to 6% having fallen in 2009 by 1% after a long period of stable economic growth.
A significant number of consulting engineering firms had left Venezuela owing togovernment policies that were accompanied by a 12% inflation rate which was
expected to increase to 30%. The country's 144 consulting engineering firms that
did not depend on oil exports were seriously affected, and two decades would beneeded to recover from the industry's brain drain.

FIDIC
19-22 Sep10

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15-16 Sep10
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Business - PracticeBest practice procurement award launched [full item: 85Pr]

Contracts
CourseQatar
28-30 Sep10

Using procurement procedures that recognise and incorporate
best practice is essential for ensuring project quality. USICSwitzerland awarded its first procurement procedures Best
Practice Award in June 2010 to a local authority for theContracts
procurement of a bypass around the town of Nafels. In its
Conference
citation, USIC noted that the Canton of Glaris, famous for its
LondonLandsgemeindegeschafte direct voting (see photo), had put in place procurement 1-2 Dec10
procedures that ensured selection on the basis of quality. Important were theclarity of the procurement documentation and conformance with industry
guidelines for engaging consulting engineers. Peter Rauch, SWR, Switzerland, who
Coursechaired the award panel has agreed to help FIDIC's Business Practices Committee sponsor
establish an international equivalent. The challenge will be to ensure that bothprivate and public sector clients take part.
Business - Contracts
Interactive bidding documents [full item: 86Co]
The Interamerican Development Bank supported the development of Interactive
Bidding Documents, an Orbeon Forms (www.oberon.com) web-based system toprepare interactive documents. The Asian Development Bank recently agreed toadopt the tool, which is also being evaluated by the African Development Bank.
The application prompts a user with appropriate choices, thus avoiding
redundancy and minimising mistakes, and ends with the generation of a Word or
PDF document. Other advantages are a reduced preparation time, ease of
updating standard clauses and automatic referencing. Authorities wishing to adopt
the tool should consult www.rdm46.webs.com. FIDIC is evaluating possible
applications. Firstly, as a tool to complete contract forms to generate fully
formatted output files that match the layout of the General Conditions of contract.
Secondly, to allow users to prepare fully formated Particular Conditions "stitched"to General Conditions to give a single document with a uniform look and feel.

Contracts for advanced project delivery [full item: 87Co]
The FIDIC Construction Contract, both the standard 1st Edition and the more
recent Multilateral Development Bank (MDB) Harmonised Edition, is widely usedin China for projects funded by international financial institutions. China's
equivalent is the Contract for works of building construction, now in its second
edition (GF-1999-0201), published by the Ministry of Construction and the China
State Administration for Industry and Commerce. There are also modified
versions to suit local conditions and other central ministries publish amended
versions. Public and private sector clients seeking more advanced project delivery
systems use the FIDIC Plant and Design Build Contract and the FIDIC
EPC/Turnkey Contract. With the country catching-up with international bestpractice, design-build and turkey contracts are being prepared. While thesenational contracts would be expected to integrate directly into China's
procurement law, their uptake will depend upon their quality and the balance ofrisk that is adopted. Meanwhile, the MDB's have also recognised the trend toward
the greater use of advanced delivery systems. The European Bank for
Reconstruction and Development announced in 2009 (see PDF) that harmonised
tender documents for design-build were expected in 2010 and the AsianDevelopment Bank (ADB) has standard bidding documents for design-build andturnkey projects (they use the FIDIC Conditions of Contract for Design-Build andTurnkey Contracts, 1st Edition, 1995). FIDIC has also released Particular
Conditions to render the FIDIC Plant and Design-Build Contract equivalent to the
MDB Harmonised Construction Contract (see News item). Discussions are ongoing with the MDB's for a MDB Harmonised design-build contract.

FIDIC
19-22 Sep10

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15-16 Sep10
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1-2 Jun10
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Industry - Representation
Representing FIDIC in Europe [full item: 69Re]
The FIDIC President, Gregs Thomopulos, and Managing Director,
Enrico Vink, attended the annual meeting of the European
federation EFCA, where the FIDIC President and the EFCA
President, Dr Panos Panagopoulos (on the left of the photo, with
Gregs Thomopulos), signed a new cooperation agreement (PDF)
that had been circulated to Member Associations for comment.
The agreement aims to streamline activities in Europe, andenable FIDIC and EFCA to be co-branded, with EFCA representing FIDIC inEurope. It also envisages a closer management of cooperation and a greater
representation for FIDIC, notably with the European Commission. The Managing
Directors meeting on 22 June 2010 agreed that activities will be coordinated via
business and forward plans, with priorities updated by September 2010. Key
items were: joint alerting of issues to be addressed; EFCA's role will relate mainly
to policies and business practice; cross-representation on committees; the joint
planning of meeting with European organisations; detailed reporting at the FIDIC
and EFCA annual general assemblies.
Industry - Image
Austria celebrates 150 years of civil engineering [full item: 51Im]
Austria celebrated the 150th anniversary of the formal recognition of civilengineers, possibly the earliest ever, with a conference in Vienna on 17-18 June2010 as part of several months of special events organised by the Federal
Chamber of Engineers and Architects (BAIK), the professional body whose Federal
Section of the Chartered Engineering Consultants (BSI) together with the AustrianConsulting Association (ACA) represents the country's consulting engineering
industry. Under the theme "Civil engineering - keeps its promise", politicians andmembers of the public alike recognised the role played by engineers in improving
the quality of life. Gregs Thomopulos, FIDIC President, participated on a panel
discussion "Future Trends and Challenges" which was introduced by Josef Robl,
BAIK Vice-President, BSI Chair and ACA President. Dipl.-Ing Robl, speaking at apress conference held during the conference, noted that successful projects reliedon selection of the best consultants, a process which was all too often dominatedby considerations of cost at a time when the demand for infrastructure required
greater innovation. Nevertheless, the industry's future remained bright despite
the current depressed market. The FIDIC President and Dr Panos Panagopoulos,
President of the European federation EFCA, shared their experience of othercountries that were also struggling to overcome depressed budgets. Easing
financial restrictions was seen as crucial to meet the growing global demand forinfrastructure.

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5-6 Oct10
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28-30 Sep10

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Conference
London1-2 Dec10

CoursesponsorPrinciples - Quality
Policy on lowest price-based awards released [full item: 5Qu]
Under European Union (EU) Directives the award of a public sector
service contract must be based on the most economically advantageoustender or the lowest price. Quality based selection procedures where, forexample, the scope of services and price are negotiated, cannot be used.
Current procedures replaced a two-envelope system where the financial offers ofprequalified firms were considered after technical proposals exceeded an 80-point
threshold. To exacerbate the situation, new EU Member States have tended tochoose lowest price as the only award procedure. The European federation EFCA
in a strongly worded policy statement that has been circulated to members forcomment has argued that, under current EU Directives, appropriate quality can
only be achieved if clients preselect consultants on the basis of qualifications, use
the most economically advantageous tender for the award of services, and give
precise descriptions of the criteria used to assess economic advantage. The
statement aims to convince "educated" clients that the cheapest consultant will
provide neither the highest overall value nor the best possible outcome in termsof the total cost of ownership. FIDIC's Quality Based Selection guide that ispresently being updated (see News item) will help reinforce this vital message.
Principles - Ethics
Anticorruption legislation becomes increasingly global [full item: 52Et]
With sanctions under the US Foreign Corrupt Practices Act(FCPA) swelling to USD 1200 million in the first few months of2010 compared to USD 627 million in 2009, more government
enforcement is envisaged in the US Financial Reform Act
adopted on 15 July 2010 (President Obama is seen in the photosigning the Act into law) that would allow employee
whistleblowers to receive up to 30% of fines. Similar stronger
incentives for firms to self-report breaches have been announced for late-2010 for
the World Bank's anticorruption Voluntary Disclosure Programme. This comes at atime when anticorruption legislation is becoming global and development bankdebarment is on the increase (see News item). For instance, the new UK Bribery
Act that comes into effect in October 2010 to replace fragmented legislation
harmonises with, and goes beyond, the FCPA. If trends continue, firms operatinginternationally will have to account for every applicable anti-corruption provision
to ensure that they are conducting business in accordance with all relevant laws,
not just those in their home country. The new UK act also now requires firms tohave in place "adequate processes" such as the FIDIC Integrity Management
System (FIMS) to prevent offences arising from a failure to prevent bribery.
Principles - Sustainability
Sustainable building metrics consolidate [full item: 10Su]
The SB Alliance that groups several green building rating systems has
signed a memorandum of understanding with the World Green Building
Council (WGBC) and the UNEP Sustainable Building and Climate
Initiative (SBCI) to develop common protocols to define methods toreport the energy and greenhouse gas emissions from building operations related
to the built environment. The first in a series of common metrics for buildings will
be a Common Carbon Metric Framework. The US GBC is closely associated with
the LEED rating system that has recently been adopted by GBC Italy, the firstorganisation in the European Union to do so. The cooperation brings together themain rating systems with the UNEP initiative, of which FIDIC is a member, thathas been developing carbon and energy metrics.
Announcements - Events
FIDIC Conferences [full item: 63Ev]
4th Biennial IBA Conference Construction Projects, Brussels, 17-18 Sep 10
FIDIC ASPAC Asia-Pacific 2010 Regional Conference, with FIDIC 2010 New Delhi
FIDIC 2010 New Delhi, 19-22 Sep 10
ICC Arbitral Awards Conference, Dubai, 19-20 Oct 10
FIDIC Contracts Users Conference, London, 1-2 Dec 10

FIDIC
19-22 Sep10

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15-16 Sep10
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1-2 Jun10
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5-6 Oct10
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28-30 Sep10

Contracts
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London1-2 Dec10

CoursesponsorFIDIC International Training Programme [full item: 62Ev]
FIDIC-Cornerstone Contracts Workshop (Contracts), Johannesburg, 15-16 Sep 10
FIDIC-Cornerstone Contracts Workshop (Claims and Disputes), Brussels, 30 Sep1 Oct 10
FIDIC-Tecniberia-Lambal Contracts Intensive Course (Contracts), Madrid, 5-6 Oct
10, in Spanish
FIDIC-ECV Contracts Course (Contracts), Brussels, 11-12 Oct 10
FIDIC-ECV Contracts Course (Contracts), Abu Dhabi 17-18 Oct 10
FIDIC-Cornerstone Contracts Workshop (Contracts), Kazakhstan, 18-19 Oct 10
ICC Arbitral Awards Conference, Dubai, 19-20 Oct 10
FIDIC-ECV Contracts Course (Claims and Disputes), Abu Dhabi, 22-23 Nov 10
FIDIC Contracts Users Conference, London, 1-2 Dec 10

FIDIC
19-22 Sep10

Taking stock at a crucial time [full item: 70Ev]
The FIDIC 2010 Asia-Pacific Contracts Users Conference in Beijing (23-25 June2010) allowed FIDIC contracts drafting task groups and experts with considerable"hands-on" experience to update users on the latest developments, notably a newversion (June 2010) of the Multilateral Development Bank (MDB) Harmonised
Construction Contract (see FIDIC.org/mdb). The event was appropriately timed
since China is planning to introduce design-build and turnkey contracts (see Newsitem). Donald Charrett, MTEC Australia, chaired the session on the MDB Edition,briefly describing the changes incorporated in the latest version. Speakers fromthe Asian Development Bank discussed the Bank's mandatory use of the MDB
Edition for all internationally competitively bid projects it funds. They were
followed by a senior consulting engineer from Japan who described the use of the
MDB Edition for all development projects funded by the Japan International
Cooperation Agency (JICA). Of particular interest was a brief introduction to
JICA's "Checklist for One Sided Contracts" for use with its sample bidding
documents (see JICA). JICA, like FIDIC, believes that risk allocation inconstruction contracts should be balanced, and not one-sided. Other highlights ofthe conference were reports on progress in updating the 1999 FIDIC suite ofmajor works contracts and a final roundup of comments on the Test Edition of the
FIDIC Construction Subcontract, where the aim was to provide an opportunity forusers to share their experience and to express their views on desirable changes.
The next Users Conference is in London on 1-2 December 2010 (see website).
Announcements - Notices

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15-16 Sep10
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1-2 Jun10
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28-30 Sep10

Executive Committee focuses on staff, subscriptions and conferences[full item: 17No]

The FIDIC Executive Committee meeting in Mexico City on 23-24 May 2010 inassociation with the 25th Anniversary of CNEC-Mexico (see News item) focussed
on planning for the Secretariat staff with the General Manager's retirement inearly 2011, new members, the outcome of the deliberations of the Subscriptions
Task Force, the programmes and arrangements for FIDIC conferences, andfinancial reporting. The 2009 auditors' report, to be presented at the 2010
General Assembly Meeting (GAM) in New Delhi on 22 September 2010, indicatinga substantial surplus was accepted and a balanced budget for 2011 agreed. Twostaff positions (a commercial director and a practice manager) would be
advertised immediately and Member Associations (MA) have been informed via adraft GAM agenda (see News item) of the application for readmission of ABCEBrazil and an application for Associate Membership from Trinidad and Tobago.
Three new Affiliate Members were approved (ECV, Keating Chambers and PS
Consulting). The agenda also proposes a minimum annual subscription fee for
MA's (Swiss francs 2000 or the Associate Fee for an association in a country,
whichever is larger, with no deductions). With an exciting programme established
for 2010 New Delhi (see www.fidic2010.org), planning was well underway for the
Tunis 2011 conference and a conference theme for 2012 Seoul was agreed. The
committee structure for the FIDIC 2013 Centenary Conference in Barcelona had
been finalised and ways to promote the event through partner organisations wereagreed. The activities and roles of FIDIC's regional groupings for Arabic speaking
countries, Africa and the Asia-Pacific remained key issues, with initiatives toreinforce and consolidate Secretariats being the priority. A new cooperationagreement with the European federation EFCA was also confirmed (see Newsitem). Meetings during the CNEC-Mexico celebrations with the pan-Americanfederation FEPAC were expected to lead to a reinforced role for FIDIC in central
and Latin America (see News item).

Contracts
Conference
London1-2 Dec10

CoursesponsorInternational cooperation and committee activities reviewed [full item: 18No]
Relations with international organisations and the MultilateralDevelopment Banks (MDB) received the usual close attention at
the FIDIC Executive Committee meeting in Mexico City in May
2010, with UNCITRAL (see News item), participation in World
Federation of Engineering Organization awards and events andfuture meetings with the development banks taking priority.
Bank representatives have been invited to participate in the
FIDIC 2010 New Delhi Conference.
Committee reports indicated a continued high level of activity
with Contracts, Business Practice, Integrity Management, Risk
and Liability, and Sustainable Development task groups currently drafting or
updating several documents including the 1999 Works contracts suite,
Construction Subcontract, Design-Build-Operate Contract Guide, Procurement
Procedure Guide, Joint Venture and Sub-Consultant Agreements, Definition ofServices Guide, Design for Safety Guide, Quality Based Selection brochure, FIDIC
Integrity Management System Guidelines, a limitation of liability policy, Project
Sustainability Management Guidelines, and a climate change industry strategy.
It was agreed that the growing need to regulate licences to amend FIDIC General
Conditions of Contract and to accredit trainers and training suppliers called for thegreater involvement by committees in the form of special panels. Special items
coming before the Executive Committee were the release of a new version (June2010) of the FIDIC MDB Harmonised Construction Contract (see News item),agreement in principle to establish a client "best practice award" (see News item)
and a capacity development sponsorship agreement with Keating Chambers (seeNews item).
Canadian association develops networking opportunities [full item: 19No]
ACEC-Canada has shown how the FIDIC conference offers an ideal opportunity for
Member Associations (MA's) to support member firms' export endeavours.
Specifically, given the Indian government's significant infrastructure investments,
the New Delhi 2010 conference provided unique possibilities for Canadian firms
interested in doing business in India. ACEC-Canada is working with Export
Development Canada and Canada's Department of Foreign Affairs andInternational Trade to arrange exclusive information and networking sessions for
ACEC-Canada member firms attending the conference. Events include an
information seminar Doing Business in India (16.00 -18.00; 20 September 2010)
and an informal networking reception and dinner in cooperation with the CanadianHigh Commission in India on Tuesday evening, 21 September 2010. FIDIC andthe host association CEAI-India is able to help other MA's identify appropriate
times and venues for similar networking opportunities.

FIDIC
19-22 Sep10

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15-16 Sep10
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1-2 Jun10
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5-6 Oct10
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28-30 Sep10

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London1-2 Dec10

Members announcements [full item: 5No]
Updates Task Group; Paris, 18 Aug 2010
Contracts Committee Meeting; Budapest, 24 Aug 2010
Executive Committee Meeting; New Delhi, 16-17 Sep 2010
Directors and Secretaries Meeting; New Delhi, 18 Sep 2010
Presidents Meeting; New Delhi, 19 Sep 2010
FIDIC GAM, New Delhi; 22 Sep 2010
Committee Meetings; New Delhi, 22 Sep 2010

Coursesponsor

MA Letter 03/10: Draft GAM Agenda PDF
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