An evaluation of the adequacy of the most commonly used pro forma contracts within the South African mining construction industry

Since the year 2000 the South African mining industry has experienced enormous growth with the awarding of mining construction contracts amounting to billions of Rands. Despite the surge in the procurement of mining goods and services no common or uniform pro forma contract is used by the mining sector. Thus far various pro forma contracts are utilised by the different South African mining houses for the procurement and execution of construction projects of which the International Federation of Consulting Engineers (FIDIC), the General (GCC) and (NEC) are the most notable. The adequacies of these pro forma contracts have been questioned in the past but thus far no guideline or direction towards the most suitable pro forma contract has been suggested. The aim of the paper is to evaluate and make specific recommendations with regards to the adequacy of the most commonly used pro forma contracts within the South African mining construction industry. This research follows a comparative approach whereby the various contractual provisions contained in each pro forma contract are compared across the three pro forma contracts. Supporting the comparative study a survey was done among four of the major mining houses in South Africa. The primary purpose of the survey was to assess the adequacy of each pro forma contract as viewed and experienced by the various mining houses. This ultimately contributed towards the aim of the research project, namely to investigate the differences between the FIDIC, GCC and NEC pro forma contracts with regard to the provided contractual provisions and also the adequacy of the three pro forma contracts with regard to mining construction projects. The results concluded that all three pro forma contracts are, in general, suitable to the mining construction industry with specific contractual provisions better defined in some than in other. However, the non-adherence to specific contractual provisions could have a negative impact on the project outc- - omes and it remains the responsibility of senior management to ensure that sufficient internal capacity exist to manage the respective pro forma contracts.