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Civil Engineer, DB Adjudicator, Mediator, Arbitrator

Kunming Zhangjiuhe River Diversion and Water Supply Project

This is a project for construction of water supply tunnels in the mountain in Yunnan Province, China. The contract was based on the FIDIC 4th, 1987, reprinted 1988 with editorial amendments, reprinted 1992 with further amendments, therefore, the parties used optional clauses of dispute resolution, i.e., Dispute Adjudication Board (DAB).

Location:
Yunnan Province, China
Employer:
Kunming Zhangjiuhe River Water Diversion Construction and Water Supply Project Administration Bureau
The Engineer:
Electrowatt-Ghidri
Contractor:
Cooperativa Muratori & Cementisti (CMC, Ravenna, Italy)
Period:
April 2002 – March 2008 (including Defect Liability Period)
Contract:
FIDIC 4th edition, 1987 reprinted 1992 with further amendments

Dr. Toshihiko Omoto was appointed as a Co-Member of a Three-Member DAB.

The whole project is huge to increase the supply of potable water to greater Kunming. It involved construction of dam in the mountains outside Kunming, a giant water pipeline to a new water treatment plant at the outskirts of Kunming, and many additions to the city’s potable water distribution system. Design and construction was assigned to Chinese Bureaus, except for one contract for construction of a tunnel through a mountain. This was awarded to the Italian constructor, CMC of Ravenna. It developed into a troubled contract, largely due to unforeseeable geological conditions.

From commencement of the works in April 2002 till March 2007 of completion of the works, the Board conducted 13 site visits. Due to very large claims, the Board was maintained even after the defects liability period expired in an effort to avoid arbitration. Fortunately, the effort was successful and amicable settlement was achieved on all disputes.

Both the Employer and the Contractor would like to express our deepest gratitude to the DAB members who walked with the parties through the whole project particularly the most difficult stage, guiding the parties to build mutual acceptable procedures to solve possible dispute. With your constant care and encouragement, it is finally possible the two parties amicably reach the final settlement package agreement. Again, we would like to give our sincere thanks and appreciation to the DAB members for your tremendous contribution to the final completion ad a successful closure of the Project.

A letter from the Employer and the Contractor

Copyright © 2020 Toshihiko Omoto

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