Construction Law/Prolongation cost
Due building design modification Client(LS contract, FIDIC Red Book) granted EOT to contractor & submit prolongation cost claim. My questions:
1- what are the time relatedcost, task related cost, capital cost? can u elaborate further with concrete examples.
2- What are direct loss/expense & head office overhead? can u elaborate further with concrete examples.
3- If the client did not renew the contract of the consultant (Post contract)what are the repercussion of this action in the project & with the contractor?
Thank you & hope u can help me on this issues.
Time related cost is any expenditure on site that is based on items such as Staff Salaries, Site Office Rental, Vehicles etc.
Task related costs are usually plant items such as Tower Cranes etc.
Capital Cost? never heard of it in this name - maybe you are thinking of reduced cash flow compensation?
Loss and Expense / Head Office overheads is the shortfall of contribution due to the delay in the project. This is usually calculated by use of Hudson or Emden formula. It generates a large cost number but has to go through at least 5 hops before it becomes valid.
If the Client wishes to change a consultant in mid project then there is a mechanism in the contract for this to happen.
Please note that costs are applied within the period of the delay event for the period of time extension.
I hope that helps.