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Construction Law/Financial charges ob delayed payment

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Question
Dear Sir
I refer to FIDIC 2010 MDB harmonized edition Sub-Clause 14.8 regarding Financial charges on delayed payment; does this sub-clause is also applicable on delayed payment of Moblization Advance?

Mohammad Aqeel Ahmad

Answer
Dear Aqeel

Thanks for the question. I would try to answer your question as I understand it. In FIDIC 2010, under sub Clause 14.2 Advance Payment is a due payment to be made to the Contractor. In Sub Clause 14.7, the first installment of the advance payment has been mentioned in the payment to be made by the Employer to the Contractor. Under Sub Clause 14.8, the Contractor is entitled to receive financial charges if he does not receive payments in accordance with Sub Clause 14.7. So the answer to your question is yes.

I would like to add that the intent of mentioning the first installment of Advance Payment separately is because this installment is generally requested by the Contractor when there is no other payment due. This also confirms that answer to your question is in affirmative.

I hope this answers your question. If you need any further clarification then please feel free to ask.

Regards

Abdul Majid Khan  

Construction Law

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Abdul Majid Khan

Expertise

I am interested in questions related to time Extension, Liquidated Damages,variations, price adjustments,payments, disputes and Dispute Board under FIDIC IV, FIDIC 1999 and FIDIC 2006 Harmonized Documents.

Experience

I have been heading the Construction Management Division and Contract Divisions of National Engineering Services Pakistan (PVT) Limited, NESPAK, the largest Consulting Engineering Firm in Pakistan, for more than seven years and two years respectively. I have also worked as "The Engineer" on a number of projects. I have been working in Saudi Arabia for about seven years on a road projects. Additionally I worked as Arbitrator and am member of few Dispute Boards in individual capacity on Asian Development Bank funded projects.

Organizations
Inland and in Middle East. I have worked with National Engineering Services Pakistan (Pvt) Limited (NESPAK)as my Employer for more than 27 years in Pakistan. In Saudi Arabia I worked for Rashid Engineering, Consulting Engineers during 80s. After retirement I provided advisory services to NESPAK on technical and contractual matters to its various divisions and lately I was appointed as Advisor to Managing Director NESPAK on Technical and Contractual matters. Currently I work as Free Lance Contract Specialist on Fidic Form of Contracts.

Education/Credentials
I am a graduate with a B.E (Civil Engineering) degree. My year of graduation is 1970.

Awards and Honors
A few appreciation Letters and Honorariums during my service in NESPAK. I remained member of Administrative Committee and Board of Management of NESPAK. I had been part of the Management Committee in the absence of Managing Director.

Past/Present Clients
Most of the Clients used to be Government Departments, Corporations and Authorities. In Saudi Arabia the Client was Ministry of Communications. As Arbitrator and Dispute Board (DB) member, I provide services to various Government Departments and Contractors.

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