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Construction Law/FIDIC 87 Clause 47.2


We would like to receive your comment on the following.

In accordance with Clause 47.2 (Reduction of Penalty) of the Conditions of Contract,

“If, before the Time for Completion of the whole of the Works or, if applicable any Section, a Taking-Over Certificate has been issued for any part of the Works or of a Section, the penalty for delay in completion of the remainder of the Works or of that Section shall, for any period of delay after the date stated in such Taking-Over Certificate, and in the absence of alternative provisions in the Contract, be reduced in the proportion which the value of the part “so certified” bears to the value of the whole of the Works or Section, as applicable.  The provisions of this Sub-Clause shall only apply to the rate of penalty and shall not affect the limit thereof.”  

Assuming that the total length of a Sewerage Network Pipe is 1,000 Mtrs including 50 manholes thus costs Dhs. 625,000/- and a TOC has been issued for 400 Mtrs of pipes including 20 numbers of manholes which costs Dhs250,000/- However on the same date the amount certified through Interim Payment Certificate is Dhs. 475,000/-   

Is the penalty on the network to be reduced on the basis of the certified value of the TOC, or on the value certified in the interim payment certificate? In other words does the word "so certified" in the above clause refer to the amount certified in TOC or the amount certified in the Interim Payment Certificate?

Your comment for the above will be appreciated.

Kind Regards

Ninan M.M, Quantity Surveyor,
JV III Infrastructure Supervision,

Dear Ninan,

The idea of partial taking over certificates is that the Employer can occupy and use that part of the works.  If the pipe is a single line, then the Employer might not be able to occupy and use a completed section, so I would prohibit taking over of parts of the pipeline.  

However, to answer your question.  The reduction in penalties is based on the value of the ToC, not the value of IPC.  'so certified' refers to the section certified as complete for purposes of the ToC.  Consider the works in the IPC.  They could refer to excavated trenches with no pipes or unconnected untested pipes without manholes and backfill.  Obviously this work cannot be occupied and used by the Employer, so there is no reduction in damages for the difference between the value in the ToC and the value in the IPC.

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Peter M. Elliott


First response to queries regarding extensions of time, variations orders, site instructions and payment using FIDIC and other forms of Conditions of Contract, based on English Law, and derivatives only. Anyone who needs advice about EoT should download and study the SCL Delay & Disruption Protocol before submitting a question.


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