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Construction Law/Traffic and Safety Arrangement

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Question
I am a project manager and working in JICA funded road project in Sri Lanka.
My question is

The Engineer send me a letter indicating that due to poor traffic and safety arrangement, she will deduct some amount from every Payment Certificate.  

The applicable condition of Contract is FIDIC 2005 version. But i could not not find any percentage or any procedure in the Contract Document relevant to deduct cost due to poor traffic and safety arrangement.
Also there is no any relevant BOQ item in this regard.

Please let me know , what engineer can do for this.


Thank U

Chandana

Answer
Thank you Chandana for your question.
First of all I presume that you are using MDB harmonized edition since yours is a bank funded project.
As per clause 3.1 (engineer's duty and authority), if the work is carried out in an unsafe condition, the engineer can issue an instruction to rectify (even if it requires addition to contract price) and the contractor should abide by it in view of reducing the risk.
As per clause 4.8, the contractor is responsible for certain level of safety. He should include the cost of safety measures in his price (even if it is not shown as a line item in preliminaries)
As per clause 5.15, the contractor is responsible for the maintenance and upkeep of approach roads. His cost should be inclusive of making a new approach road if required.

The engineer can deduct money citing the above clauses. But before deducting any amount on this account, the engineer should have recorded her observation by sending instruction to contractor and notified her intention that if the contractor fails, she would make the traffic arrangements at the risk and cost of contractor. Simply deducting money from every payment certificate is allowing the contractor to work in an unsafe condition and take financial advantage on account of this. This attitude dilutes and voids the very purpose of the contractual provisions. In fact as per contract, the employer is not responsible for any claim arising out of this poor traffic arrangement. By deducting money, the engineer is indirectly making the employer responsible and bound to make the traffic arrangements with the money deducted from the contractor.
There is no standard percentage set for this. Since it is safety related, if contractor fails, the engineer should get it done from third party and deduct the actual costs from the contractor.
Safety is a fundamental requirement. It need not necessarily be explicitly mentioned as separate line item. If there is no line item / it is not part of preliminaries, the contractor can very well factor the cost related to safety in all other line items.

Hope this clarifies.
--r sivaraman

Construction Law

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R.Sivaraman

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