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The Indian construction industry operates under a range of standard forms of contracts, with the Central Public Works Department (CPWD) form being predominant in public sector projects. Meanwhile, the FIDIC Red Book (2017 edition) has gained popularity for both domestic and internationally financed infrastructure contracts, particularly where the Employer provides the design.
The Indian construction industry frequently uses:
- 📌 CPWD Contracts for public sector works
- 📌 FIDIC Red Book (2017) for EPC/infrastructure projects, especially with international financing
This article presents a comparative analysis between the two frameworks, with a focus on:
- ✅ Dispute Resolution
- ✅ Risk Allocation
- ✅ Payment Provisions
- ✅ Extension of Time (EOT)
It also reflects the latest updates from the CPWD Works Manual 2019 and the FIDIC Red Book 2nd Edition (2017).
1. Dispute Resolution: Two Paths to Justice in Construction Contracts
In any construction project, disputes are not a matter of “if”—but “when.” The question is, how prepared are you to resolve them? In India, the CPWD contract structure and the internationally adopted FIDIC Red Book offer two distinctly different philosophies of dispute resolution. One emphasizes internal resolution and post-facto arbitration, while the other builds a proactive, multi-tiered system to resolve disputes as they arise.
Let’s unpack the two approaches, clause by clause—and see what they really mean on site.
🏛️ CPWD Contracts: Department-Led Dispute Settlement
CPWD contracts are based on government processes and institutional hierarchy. Dispute resolution unfolds in two main stages—Dispute Redressal Committee (DRC) and Arbitration—outlined in Clause 25 of the General Conditions of Contract (GCC) and further clarified in the CPWD Works Manual 2019, Chapter 5.24.
🔹 Step 1: Dispute Redressal Committee (DRC)
Clause 25(i):
“If the contractor considers any work demanded of him to be outside the requirements of the contract… he shall promptly, within 15 days, request the decision of the Engineer-in-Charge in writing…”
Clause 25(ii):
“If the contractor is not satisfied with the decision of the Engineer-in-Charge, he may within 15 days request the constitution of a Dispute Redressal Committee (DRC)…”
- The DRC is usually a three-member panel constituted by the department.
- It must provide a decision within 60 days, extendable by 30 days with mutual consent (Manual 2019, Clause 5.24.1).
- Its recommendation is not binding, but considered seriously before arbitration.
✅ Key Insight: The DRC offers a low-cost, department-friendly forum for resolving early-stage disputes—but its impartiality is often questioned by contractors, as its members are usually appointed by the employer itself.
🔹 Step 2: Arbitration
Clause 25(iii):
“Subject to the provisions of Clause 25(ii), all disputes arising shall be referred to arbitration… in accordance with the Arbitration and Conciliation Act, 1996…”
- The clause becomes active only after LOI is issued.
- Tribunal constitution depends on the claim value:
- ₹20 crore or less → Sole Arbitrator (appointed by DG/Chief Engineer)
- Above ₹20 crore → Three Arbitrators, each party nominates one, and the two nominate the presiding arbitrator
- All arbitrators must be retired or serving engineers, not below Chief Engineer level (Manual 5.24.2).
- No explicit clause requires amicable settlement or mediation before arbitration.
⚠️ Limitation:
- CPWD does not provide an independent standing dispute board (like FIDIC’s DAAB).
- Disputes often remain unresolved until completion, then escalate to arbitration—delaying final payments and prolonging contractor uncertainty.
🌍 FIDIC Red Book 2017: Layered, Structured, and Neutral
FIDIC believes in resolving disputes before they explode. That’s why it builds a four-tiered system into the contract, promoting dispute avoidance, timely resolution, and neutrality at every level.
🔹 Stage 1: Engineer’s Determination
Clause 3.7.4 (FIDIC 2017):
“The Engineer shall make a fair determination in accordance with the Contract, taking due regard of all relevant circumstances. The Engineer shall consult with both Parties in an endeavour to reach agreement.”
- The Engineer must act neutrally, not as an agent of the Employer.
- This determination is binding unless a Notice of Dissatisfaction (NoD) is issued within 28 days (Clause 3.7.5).
- The Engineer plays a crucial role in avoiding formal disputes early.
✅ Contrast: In CPWD, the Engineer-in-Charge is an extension of the Employer and is not required to act impartially.
🔹 Stage 2: Dispute Avoidance/Adjudication Board (DAAB)
Clause 21.1 & 21.4:
“The DAAB shall be appointed jointly by the Parties… The DAAB shall issue its decision within 84 days after receiving the reference.”
- DAAB is a standing body, appointed at the beginning of the project.
- Can assist proactively (informal dispute avoidance) or adjudicate disputes.
- Its decision is binding unless an NoD is issued—then the matter progresses further.
✅ Practical Benefit: DAAB can give fast, expert decisions—preventing small problems from becoming large legal battles.
🔹 Stage 3: Amicable Settlement
Clause 21.5:
“Within 28 days after a Notice of Dissatisfaction… the Parties shall attempt to settle the dispute amicably before arbitration.”
- A formal, contractually mandated cooling-off period.
- Encourages final negotiation before legal escalation.
✅ Tip: Often, the threat of arbitration is enough to get both parties to settle here.
🔹 Stage 4: Arbitration
Clause 21.6:
“Unless settled amicably, the dispute shall be finally settled by international arbitration… in accordance with the rules stated in the Contract Data (e.g., ICC or UNCITRAL).”
- This is the final step—only reached after Engineer, DAAB, and amicable negotiation are exhausted.
- Parties may select the seat, language, and governing rules in Contract Data.
⚖️ Side-by-Side Comparison: CPWD vs FIDIC
| Feature | CPWD Contracts | FIDIC Red Book 2017 |
|---|---|---|
| Initial Determination | Engineer-in-Charge decision (Clause 25(i)) | Engineer’s fair determination (Clause 3.7.4) |
| Impartiality of First Reviewer | No requirement; acts as Employer’s rep | Must act neutrally |
| Intermediate Forum | DRC (Clause 25(ii)); not standing; employer-appointed | Standing DAAB (Clause 21.1); jointly appointed; independent |
| DAAB Decision Timeline | ~60–90 days for DRC recommendation | 84 days for DAAB decision (Clause 21.4) |
| Binding Nature of Decisions | DRC: Not binding | DAAB: Binding but not final (Clause 21.4.3) |
| Amicable Settlement Phase | Not contractually required | Mandatory 28-day window (Clause 21.5) |
| Final Stage | Arbitration under Indian Arbitration Act, 1996 (Clause 25(iii)) | International Arbitration (Clause 21.6) |
| Arbitrator Appointment | Department appoints sole arbitrator or panel with engineer qualifications | Rules per Contract Data (e.g., ICC/UNCITRAL); parties have more control |
🎯 Implications for the Indian Construction Industry
- CPWD’s system is designed for public sector governance, offering internal resolution and cost-effective arbitration. However, its effectiveness depends on the impartiality of the department—and that’s often questioned.
- FIDIC’s model, with clear roles, timeline-bound processes, and independent adjudication, is better aligned with complex, time-sensitive infrastructure projects.
- In PPPs, metro projects, or internationally financed infrastructure, FIDIC’s DAAB and early resolution mechanisms help prevent disputes from dragging through the courts or draining contractor cash flows.
- There’s growing recognition that early dispute resolution = smoother delivery. Some Indian authorities are already adapting FIDIC-like provisions into their contracts, especially for large EPC works.
2. Risk Allocation: Who Holds the Hot Potato?
Risk in construction contracts isn’t just about guessing what might go wrong—it’s about agreeing in advance on who pays the price when it does. The philosophy and structure of risk allocation in CPWD contracts versus the FIDIC Red Book 2017 show two vastly different mindsets: one rooted in traditional government practices and the other in modern, balanced risk-sharing.
🏛️ CPWD Contracts: Implicit, Dispersed, and Mostly on the Contractor
CPWD contracts don’t present a dedicated “Risk Allocation” section like FIDIC. Instead, risk is spread across several clauses, each hinting at who bears responsibility for various problems. Let’s look at the core risk elements with actual clause support:
🔹 Performance Guarantee – Clause 5.2
“Performance Guarantee shall be obtained from the successful bidder… [and] shall be 5% of the contract amount…”
— CPWD Works Manual 2019, Clause 5.2
This ensures the contractor carries upfront financial risk to guarantee performance. It’s a standard risk-shifting tool to protect the Employer.
🔹 Security Deposit – Clause 5.5
“The security deposit shall be collected by deductions from the running bill as well as final bill as per provisions of the GCC.”
— CPWD Works Manual 2019, Clause 5.5
A further retention mechanism to secure against poor workmanship or delay. Refund conditions are strict and follow defined SOPs.
🔹 Compensation for Delay – Clause 2 (via 5.16.1)
“The compensation under Clause 2 is to be operated by following due procedure and proper application of mind.”
— CPWD Works Manual 2019, Clause 5.16.1
Clause 2 permits levy of up to 10% compensation on the contract value for delays attributable to the contractor. The onus to prove non-fault lies on the contractor.
🔹 Extension of Time – Clause 5.16
“For EOT and rescheduling of milestones, provisions as per GCC shall be followed.”
— CPWD Works Manual 2019, Clause 5.16
EOT is possible—but only as “time only” relief, not financial. Even Employer delays don’t automatically translate into cost compensation.
🔹 Price Escalation – Clause 10CC (in GCC)
Although not in the manual text, Clause 10CC (referenced in CPWD contracts) allows for price variation claims under defined indices and duration, primarily for works over 12 months.
🔹 Force Majeure? Yes—But Not by Name
While there is no explicit “force majeure” clause, CPWD practice allows time extensions for uncontrollable events. However, no cost compensation is allowed unless perhaps awarded through arbitration.
🔹 Site Conditions? Contractor Beware.
There is no clause offering protection for unforeseen physical conditions (like in FIDIC Sub-Clause 4.12). Contractors are presumed to have examined the site fully and priced accordingly.
🟨 Summary of CPWD Approach:
- Risks are contractor-heavy and scattered across several clauses
- EOT = time only, not cost
- No relief for unforeseen ground conditions
- Delay by department? Only documented EOT, not prolongation cost
- Heavy reliance on Performance Security, LDs, and SOP enforcement
🌍 FIDIC Red Book 2017: Intentional and Balanced Risk Allocation
FIDIC takes a principled approach to risk: allocate it to the party best able to manage it, and write it down explicitly. This promotes fairness, clarity, and better pricing.
🔹 Employer’s Risks – Clause 17.3
Clearly spells out risks that the Employer must bear:
- Late drawings
- Adverse site conditions
- Unforeseen events caused by government actions
- War, terrorism, etc.
Contractors are entitled to EOT + cost for these.
🔹 Exceptional Events – Clause 18.1
FIDIC’s version of Force Majeure includes:
- Natural disasters
- Epidemics
- Acts of God
“If an Exceptional Event delays the execution… the Contractor shall be entitled subject to [compliance] to an extension of time and, if the event affects performance of an obligation, cost.”
The clause creates measured, fair relief—time and sometimes money—depending on the nature and effect of the event.
🔹 Unforeseeable Physical Conditions – Clause 4.12
“If the Contractor encounters adverse physical conditions which were unforeseeable… the Contractor shall give notice… and be entitled to EOT and Cost.”
This clause offers substantial protection to the contractor when nature throws a curveball.
🔹 Variations and Claims – Clauses 13 & 20
FIDIC requires that any change initiated by the Employer that causes delay or additional cost must be compensated—through a structured claims process. Unlike CPWD, there’s no waiver-based culture.
🔹 Delay Damages – Clause 8.7
Yes, FIDIC allows the Employer to impose Delay Damages if the contractor is at fault—but:
- The amount is pre-agreed (not arbitrarily assessed)
- There is always scope for time extension before imposition
⚖️ Risk Allocation Comparison Table
| Risk Type | CPWD (Clauses) | FIDIC (Clauses) |
|---|---|---|
| Delay by Employer | Clause 5.16 – EOT only | Clause 20.2, 8.4 – EOT + Cost |
| Force Majeure | No formal clause; EOT possible | Clause 18 – EOT + sometimes Cost |
| Unforeseen Site Conditions | Not recognized | Clause 4.12 – EOT + Cost |
| Delay Damages | Clause 2 – up to 10% | Clause 8.7 – liquidated & capped |
| Price Escalation | Clause 10CC (if applicable) | Only if included in Contract Data |
| Risk Clarity | Dispersed in multiple clauses | Structured & clause-specific |
🎯 Takeaway for the Indian Construction Sector
- CPWD’s model, while administratively robust, tends to shift a majority of performance, delay, and site-related risks to the contractor without adequate recourse for cost compensation.
- FIDIC’s framework provides contractual fairness through clear definitions and claim pathways. It allows both parties to price the work more transparently and manage deviations without conflict.
📌 If India’s public sector were to adopt even partial FIDIC-style risk allocation, it could enhance participation, improve pricing accuracy, and reduce disputes.
3. Payment Clauses: Who Pays, When, and With What Strings Attached?
In construction, money is momentum. If payments flow on time, projects run. If they stall, the site stalls, morale dips, and the contractor ends up firefighting with vendors, workers, and banks. So how do CPWD and FIDIC treat payments? Let’s take a look at both, clause by clause—with our boots on the ground and eyes on the text.
🏛️ CPWD Contracts: Reliable but Red-Taped
CPWD’s payment provisions are functional but deeply bureaucratic. They’re safe, structured, and designed for accountability—but at the cost of speed and contractor rights.
🧾 Clause 5.18 – Payment Procedure
This clause lays the groundwork for the payment system.
“The time schedule for payment of bills shall be as per GCC provisions.”
Clause 5.18.1, CPWD Works Manual 2019
While the timeframes are not strictly defined in the Manual itself, they refer back to the General Conditions of Contract (GCC), which specify timelines for processing Running Account (RA) and Final Bills.
🏦 Clause 5.18.3 – All Payments via PFMS
“Public Financial Management System (PFMS)… shall be used for sanction preparation, bill processing, payment, receipt management…”
Clause 5.18.3
All CPWD payments flow through PFMS—ensuring digital trail and control. Sounds efficient? It is, but PFMS depends on fund availability, departmental approvals, and uploaded measurement records.
📉 Clause 5.18.4 & 5.18.5 – TDS and GST Deductions
Contractors should expect the following deductions:
- Income Tax (Section 194C, IT Act)
- GST deduction at source
- Security Deposit (Clause 5.5): Deducted from every bill—up to 10% of the contract value
🧰 Mobilization & Secured Advances
⚙️ Clause 5.8 – Mobilization Advance
“Provision of mobilization advance may be kept in the tender documents… applicability shall be clearly indicated in Schedule ‘F’.”
Clause 5.8, CPWD Works Manual
- Usually up to 10% of contract value
- Paid against Bank Guarantee
- Interest charged (typically 10%)
- Recovered proportionately from RA bills
This is discretionary—only for “capital intensive” or “specialized” works, and must be mentioned upfront in the tender.
🧱 Clause 5.10 – Secured Advance
“Advance made on the materials brought at site of work… Conditions in SOP 5/19.”
Clause 5.10
This lets contractors claim advance on materials like steel or cement—but not for perishable items. Again, a Bank Guarantee is a must, and recovery is gradual.
📅 Final Bill and Interest for Delay
When the work wraps up, your last big hope is the Final Bill. But if that takes time, CPWD offers one small consolation prize:
“Interest at 7.5% per annum is payable if final payment is delayed beyond time limits.”
(As per SOP referenced under Clause 5.18 & GCC)
Official target timelines for Final Bill (from GCC):
- ₹0–₹45 lakhs: 2 months
- ₹45 lakh–₹2.5 crore: 3 months
- Above ₹2.5 crore: 6 months
But here’s the catch: this interest isn’t automatic. Contractor must formally claim it—and often chase the accounts team for months.
🚫 No Right to Suspend Work for Non-Payment
Perhaps the biggest contractor pain point in CPWD:
There is no clause granting the contractor the right to suspend or stop work if payment is delayed.
Even if you’re not paid for 3 months, you’re still expected to keep the project going. The logic? CPWD is government-backed; you’ll be paid eventually. But that doesn’t help your cash flow when your labour and vendors are demanding payment.
🌍 FIDIC Red Book 2017: The Contractor’s Cashflow Ally
Now, let’s see how the FIDIC Red Book (Clause 14) addresses the same points—but with a more contractor-friendly, commercial approach.
📜 Clause 14.3 – Interim Payments
Contractor submits a Statement at the end of each month.
Engineer certifies within 28 days.
Employer pays within 56 days of Statement receipt.
This strict chain keeps payments predictable and empowers the contractor to plan financially. Compare that to CPWD’s loosely enforced timelines.
💰 Clause 14.8 – Interest on Late Payment
“The Contractor shall be entitled to financing charges compounded monthly on any amount unpaid.”
Rate: base lending rate + 3%
This isn’t a request—it’s a right. The contractor includes these charges in their next Statement if payment is late. Powerful stuff.
✋ Clause 16.1 – Suspension for Non-Payment
FIDIC isn’t afraid to give contractors leverage:
If payment isn’t made within 42 days after the due date, and no remedy is offered within 14 days of notice, the Contractor may:
- Suspend work
- Recover costs + profit
If it continues, Clause 16.2 allows termination, with compensation for the Contractor.
🔍 Side-by-Side Snapshot
| Feature | CPWD (Clause No.) | FIDIC Red Book 2017 |
|---|---|---|
| Monthly Bills | RA Bills (5.18.1) | Statement + IPC (14.3) |
| Payment System | PFMS (5.18.3) | Defined time-bound payments |
| Interest on Delay | 7.5% (only Final Bill) | Base + 3% (Clause 14.8) |
| Mobilization Advance | Optional (5.8), with 10% interest | Standard, defined in Contract Data |
| Secured Advance | Clause 5.10 | Included via Sub-Clause 14.2 |
| Right to Suspend | ❌ Not provided | ✅ Clause 16.1 |
| Retention | Clause 5.5 | Clause 14.9 (with release milestones) |
🎯 Final Word: Predictability vs Process
- CPWD provides safe, secured payment mechanisms, but the system leans heavily toward control over flexibility. There’s no urgency or consequence in case of delayed payments—and contractors carry the financial stress.
- FIDIC, by contrast, offers clear timelines, enforceable rights, and a system that recognizes time as money. It builds trust—and protection—into the very fabric of the contract.
In essence:
CPWD trusts its legacy. FIDIC trusts its process.
4. Extension of Time (EOT): Time Is Money… or Is It?
Delays are inevitable in construction. From monsoon surprises to delayed approvals, something always throws the schedule off track. The key question is: When delays happen, who absorbs the cost of time lost?
Let’s explore how CPWD and FIDIC Red Book 2017 approach EOT—and how they differ in terms of procedure, fairness, and financial impact.
🏛️ CPWD Contracts: Time Relief, But Wallet Pain
CPWD contracts recognize that delays can happen—but they are strict about not rewarding the contractor financially, even if the delay was caused by the department.
✅ Clause References:
- Clause 5.16 – “Extension of Time (EOT)”
- Clause 5.15 – “Hindrance Register”
- Clause 2 – “Compensation for delay” (Liquidated Damages)
- Clause 5.16.1 – “Milestone-wise extension”
1. When Delay Strikes: What Should a Contractor Do?
When faced with a delay beyond their control (e.g., site not handed over, drawings issued late), the contractor must:
“…give notice in writing to the Engineer-in-Charge with details of the delay and the reasons therefor.”
— CPWD Works Manual 2019, Clause 5.16
The hindrance must be documented. While older contracts relied on a Hindrance Register, the 2019 Manual clarified that this is no longer mandatory for post-2019 contracts:
“The requirement of maintaining a Hindrance Register has been discontinued.”
— CPWD Works Manual 2019, Clause 5.15
Instead, contractors are expected to log delays via formal communication—letters, emails, and site meeting records.
2. Who Grants the EOT?
Once the contractor applies for an EOT:
- The Engineer-in-Charge reviews the hindrance claims.
- The matter is forwarded to the Competent Authority (e.g. Superintending Engineer or Chief Engineer).
- The authority grants or rejects the EOT through a formal letter.
This is backed by Clause 5.16.1:
“The Engineer-in-Charge shall forward the case for grant of extension of time to the competent authority… If justified, the competent authority shall grant extension of time and suitably reschedule the milestones.”
3. Cost Compensation? Not in This Clause
Even if the delay is 100% the Employer’s fault, EOT only provides time—not money.
Clause 5.16.1 continues:
“Such extension of time shall be without prejudice to the right of the department to recover compensation for delay… unless such extension is granted without levy of compensation.”
— CPWD Works Manual 2019
And here’s the real twist: in practice, when EOT is granted, the contractor is often asked to sign an undertaking stating they will not claim any compensation related to the delay.
So you’re given time, but told not to ask for loss-of-profit, idle machinery, or site overheads. If you want compensation, your only option is to file a claim and go to arbitration—often long after the project is completed.
4. Contractor Delays = Penalties
Under Clause 2, if the delay is found to be due to the contractor, CPWD can impose compensation for delay (i.e., liquidated damages):
“The contractor shall pay compensation… at the rate of 0.5% per week of delay… provided always that the total amount of compensation for delay to be paid under this condition shall not exceed 10% of the tendered value.”
— CPWD GCC, Clause 2
In other words, LDs are harsh if you’re at fault, but if the Employer delays you, no compensation is due to you unless you go the legal route.
🌍 FIDIC Red Book 2017: Time and Money, If Deserved
The FIDIC Red Book 2017 introduces a much more structured and contractor-friendly system for managing delays.
It not only allows Extension of Time, but also supports cost claims, where appropriate.
✅ Clause References:
- Clause 8.5 – “Delays Caused by Authorities”
- Clause 8.6 – “Rate of Progress”
- Clause 8.7 – “Delay Damages”
- Clause 20.2.1 – “Claims for Payment and/or EOT”
- Clause 3.7 – “Agreement or Determination”
1. Step 1: Notice Within 28 Days
If the contractor experiences delay from any cause that may entitle an EOT, they must:
“Give notice to the Engineer describing the event or circumstance as soon as practicable, and not later than 28 days after the contractor became aware…”
— FIDIC Clause 20.2.1
This notice is a condition precedent—fail to send it in time, and the claim could be rejected outright.
2. Step 2: Submit Full Claim Within 42 Days
After giving notice, the contractor must:
- Submit details, calculations, and evidence for the claim within 42 days
- The Engineer must consult both parties and make a fair determination under Clause 3.7
“The Engineer shall consult with each Party to reach agreement. If no agreement is achieved, the Engineer shall make a fair determination.”
— FIDIC Clause 3.7.3
The Engineer must act neutrally, even though appointed by the Employer—a significant departure from CPWD’s internal hierarchy model.
3. What You Can Get: Time, Cost, or Both
Depending on the nature of the delay, FIDIC allows:
| Type of Delay | Entitlement |
|---|---|
| Late drawings, approvals, access | EOT + Cost (Clause 8.5 + 20.2.4) |
| Unforeseeable site conditions | EOT + Cost (Clause 4.12) |
| Force Majeure (Exceptional Events) | EOT (Cost in specific cases, Clause 18) |
| Contractor’s own delay | Delay Damages apply (Clause 8.7) |
This setup encourages fair treatment and early resolution, unlike CPWD’s reactive, post-project model.
4. Delay Damages – Transparent and Predefined
Under Clause 8.7:
“If the contractor fails to complete the works… the contractor shall pay delay damages… at the rate stated in the Contract Data.”
— FIDIC Clause 8.7
- The rate is pre-agreed (e.g. USD/day or ₹/day)
- There’s a maximum cap, often 10% of contract price
- The contractor knows exactly what’s at stake—and can plan accordingly
5. Real-Time Adjustments
FIDIC expects delays to be dealt with during the project, not accumulated for debate after completion. This keeps:
- Milestones updated
- LD exposure managed
- Relationships more collaborative
📊 Side-by-Side: CPWD vs FIDIC on EOT
| Feature | CPWD Contracts | FIDIC Red Book 2017 |
|---|---|---|
| Delay Notification | Required, no strict timeline | Must notify within 28 days (Clause 20.2.1) |
| Detailed Claim | Written application, reviewed by EIC | Full claim within 42 days (Clause 20.2.4) |
| Review by | Engineer-in-Charge & Competent Authority | Engineer (impartial determination, Clause 3.7) |
| Employer-Caused Delay | EOT only (no cost) | EOT + Cost (Clause 8.5, 20.2.4) |
| Exceptional Events | EOT only (no cost) | EOT + possible cost (Clause 18) |
| LD for Contractor Delay | Clause 2: 0.5%/week, up to 10% | Clause 8.7: pre-agreed, capped amount |
| Undertaking to waive claims? | Often required for EOT | No such requirement |
| Right to Cost for Prolongation? | Only via post-project claims/arbitration | Built into the contract framework |
| Timing of EOT decisions | Often delayed or finalized post-completion | Resolved during the contract period |
🎯 What It Means on the Ground
- Under CPWD, time is extended, but the financial burden is absorbed by the contractor, unless they go to arbitration.
- Under FIDIC, delay and cost relief are both addressed within the contract, saving time, legal fees, and bad blood.
Let’s say your drawings arrive three months late:
- CPWD: You’ll get a time extension—but you cover the idle site overheads yourself. You might get reimbursed years later, via arbitration.
- FIDIC: You get a time extension and cost compensation (if you followed the notice procedure), within the same contract process.
So while CPWD gives you time to finish, FIDIC gives you time and the budget to survive it.
Conclusion
CPWD contracts, rooted in Indian public sector traditions, provide a time-tested, bureaucracy-aligned system that works well for cost-conscious governance. However, they tend to offload substantial risk onto contractors and limit contractual remedies, especially regarding cost claims for delays or unforeseen conditions.
On the other hand, the FIDIC Red Book 2017 offers a more balanced and internationally aligned framework, emphasizing early resolution of disputes, clear risk allocation, and timely payment protections.
For the Indian construction sector to improve project delivery, hybrid models or FIDIC-adapted contracts with Indian customizations may provide the best of both worlds—international clarity with local adaptability.
References
- CPWD Works Manual 2019
- CPWD General Conditions of Contract (latest GCC)
- FIDIC Red Book 2nd Edition (2017)
- Arbitration & Conciliation Act, 1996 (India)
- Government of India Procurement Guidelines