Notes · Case study · Land access
When “handed over” isn't lawful access
The Engineer certified 97% of the corridor as “handed over” — but the people on it had not been compensated, so it was not lawfully available to build on. A case study in how environmental and social obligations (IFC PS5) become a condition precedent to access, and how the delay became the Employer's.
An anonymised case study — organisations and dates generalised.
The rule: compensation before possession
On a FIDIC Design-&-Build railway, the contract incorporated the IFC Performance Standards as binding obligations — in particular PS5, on land acquisition and involuntary resettlement. PS5 fixes the order of events for any land the project needs: a compliant Resettlement Action Plan, then compensation of the affected people at full replacement cost, and only then may the Employer take possession and hand the land over, with the Engineer verifying. In other words, compliant compensation is a condition precedent to valid handover — and the duty sits with the Employer, not the Contractor.
What went wrong
The Employer ran the sequence out of order — commencing land acquisition without compliant plans and without compensating at full replacement cost, leaving the project non-compliant with PS5. It was not a hidden failure: the Employer’s own independent E&S adviser flagged it three times; an independent monitor later recorded that 467 of 2,193 project-affected people on this section remained uncompensated; and the project’s lender directed a suspension of land acquisition and vegetation clearance until compliant plans were in place.
Certified — but not lawfully available
Land the Engineer certified as “handed over” — some 97% by length — was not lawfully available to build on. A joint site verification recorded 121 physical obstacles on the critical earthworks fronts: intact and part-demolished structures, and un-relocated graves. The Contractor was legally prohibited from working in uncompensated areas, and the resulting suspension pushed critical earthworks into the rainy season.
Whose delay is it?
The failure to complete PS5-compliant compensation before handover deprived the Contractor of effective access under Sub-Clause 2.1, giving rise to delay attributable to the Employer under Sub-Clause 8.4. The Engineer attributed the delay instead to the Contractor’s finances. The answer to that is simple: no contractor, whatever its finances, could lawfully have proceeded on non-compliant land. The entitlement was proven with a full Time Impact Analysis — a 485-day extension of time.
Certified “handed over” is not the same as lawfully available access. The money was never the cause — the Employer’s own non-compliance was.