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Construction Law/Escalation on New items


Dear Sir,
Hope you are fine. i am working as Quantity Surveyor  in Pakistan and facing problem regarding escalation.Bid of our project was approved for civil works in 2007. According to tender documents contractor is entitled for escalation on labor and diesel on the total work done of an IPC(interim payment certificate).

After 5 years in 2012 Electrical BoQs were revised. An addendum were also included in the revision of Electrical BoQs. All items in addendum were new items and contractor was submitted rate analysis of these items on the prevailing market rates.

Revised Electrical BoQs were included as addendum in electrical works in the original BoQs and were approved on May 05, 2012 by the competent authority. In the revised electrical BoQs, the contractor submitted rate analysis on the prevailing market rates with revised electrical BoQs and consultant also verified the same. As the addendum items were based on the prevailing market rates which are not tender rates.

1.the question is can contractor eligible for escalation claim on the addendum items work done ?

2. if contractor eligible for escalation on addendum items work done which base rate applies(base rate at the time of tender 2007 or base rate at the time of approval of addendum 2012)?

3.what is common engineering Practice for the above?

Best Regards,
Syed Afzaal Shah.

Dear Afzaal,

You ,himself has written that as per Contract Document,the Contractor is entitled for escalation on labor and diesel on the basis of total work done of the IPCs. Now in 2012, there is change in electrical work only through addendum.Generally any revision /change are through variation and not through addendum.Now answers of your Qs:

1.If there is provision of escalation in the original contract or in the addendum,then the contractor is entitled for have not mentioned the conditions of your contract whether it based on red book 1987 or 1999 or MDB harmonized Edition.Is there price adjustment formula exists in the contract document?
2.If there is provision of price adjustment in the Contract, base rates of May 2012 will be applicable for electrical items of work.
3.As per Prudent practice,adjustment shall be there and basic rates for revised electrical items will be of May 2012.

If you feel any further clarification,you may directly contact to my personal following e-mail


Engr. Arshad Mahmood

Construction Law

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Arshad Mahmood


I may answer to the questions relating to FIDIC 4th as well as FIDIC 2010 MDB Harmonized version,price adjustment ,Variations,Eot and Cost claims,EPC Contract,Bidding Document,consultancy Contracts,certification,Standard Forms, Dispute resolution; and others pertaining to Contract implementation.


Contract management and Contract Administration, using FIDIC Conditions of 4th Addition as well as Fidic 1999 Red, Yellow and Silver Books including MDB Harmonized Edition 2010. Particularly in the area of Procurement of Contracts, Certification,Price Adjustment, variations,disputes management, EoT and Cost Claims; and other contractual issues arises from time to time during currecy of the Contracts.

Member -Pakistan Engineering Council Member -Pakistan Engineering Congress Member -FIDIC Organisation

Joint Venture and Consortium Agreements for Pakistan Engineering Council,Pakistan

BSc Civil Engineering; Basic Management course; Hydro power Projects; and various other on Job Trainings

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Commendation Certificate for the excellent management qualities and dedication at Ghazi Barotha Hydropower Project; and Certificate of Excellent work performed during Survey Camp.

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Water and Power Development Authority (WAPDA),Associate Consulting Engineer(ACE) and National Engineering services Pakistan(Pvt.) Limited (NESPAK)

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