Mr. Seamus McCarthy:

Obviously, there are risks associated with projects. To get a fixed-price contract in a greenfield site where parties have nailed down exactly what it is they want to build is relatively simple and a contractor will give a fixed price in respect of that. However, if there are any design changes or if there are site difficulties that were not foreseen, that creates a space for a dispute and for extra claims. Even with a fixed-price contract, it is not the case that the contractor is carrying all of the risks associated with it and it is at his or her expense. It creates space for negotiation and that is where cost overruns creep in.