Construction Law/Delayed Payment


i want to ask about sub clause in red book fidic/1999 " Delayed Payments " clause 14/8
my question :
Is the delayed payment according to this clause in its percentage in contract (9%) per year include all compensation of the contractor include  1- indirect , 2- direct overhead .
best regards""

ANSWER: Hi Shadi
No - the 9% is to compensate you for the loss of income.
If the late payment in itself causes a delay to the works then an Extension of Time is the route to recovery of overheads and other losses.
Best regards
Mike Testro

---------- FOLLOW-UP ----------

QUESTION: Thanks about above ,
but my question is :
1- if the issue is only that payment was delayed ( without suspension the works )and the works will be delayed for 3 months  , is the contractor entitled only to the finance charges and the contractor shall pay delay damages to the Employer ??
2- if the issue is that payment was delayed and the contractor  suspension the works , is the contractor entitled only compensation for his Stuff and extension time only without entitled the finance charges ???

Hi Shadi
The two issues have to be treated seperately.
1. Late payment gets 9% on the shortfall
2. Extension of time - for whatever reason including late payment - gets LAD relief and sometimes costs depending on concurrency.
Best regards
Mike T.

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Mike Testro


Anything related to extensions of time and delay analysis.


45 years in the Construction Industry 15 Years as a consultant delay analyst - I now hold myself to be expert in this field.

Society of Construction Law Adjudication Society ex Planning Engineers Organisation

6 articles on the relevance of the India Contract Act 1872 and its relevance to modern construction in India. Waiting Publication

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Currently employed in India by Punj Lloyd as expert delay analyst. Engaged in ongoing arbitrations and EoT claims. Prior an Indepenent consultant in delay analysis.

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