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Construction Law/PINK BOOK FIDIC 2010

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Question
we are dealing Highway project will you please explain with example for  clause 12.3 (a) (iii)This change in quantity directly changes the cost per unit quantity of this item by more than 1%

Answer
Dear Imran

Thanks for the question and again sorry for the late response as I am very busy these days. I will try to explain the contents of sub clause 12.3 a (iii). This is the third condition which must be fulfilled in order to find a new rate for an item of work. I will explain by this example.

Suppose the quantity of a BOQ item is 10000 units and its rate is Rs. 100 per unit. The cost of this item comes to be 10000* 100 = Rs. 1,000,000. Now suppose the quantity increased to 10200 units. The new cost of this item will now be Rs. 10200* 100 = 1020,000. If we check this cost for the Boq quantity the cost per unit comes to 1020000/ 10000 = 102. This means that the cost per unit have increased from Rs. 100 to Rs. 102 which is 2%. this increase in cost per unit is more than 1% and therefore this condition is satisfied. If other conditions are also satisfied than a new rate will be worked out for this item.

looking at the example we can clearly see that this does not satisfy condition stated in a (i)as the change in quantity is less than 25%. So this example is not qualified for a change in rate as this does not meet all the conditions.

Hope this answers your question.

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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