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Construction Law/TOC date and Price Adjustment on Punch List Items


Assalam O Alikum Sir!

I am working at an irrigation project at DIK PK executed under EPC FIDIC 1999. We have Price ajustment Clause as per PEC documents. It is like direct reimbursement of difference in Base Price and Current Price as per quantity consumed. The Employer is WAPDA and Works are almost completed and process of TOC is underway. There are some items like gravel road, boundary pillars, distance markers, sign borads, signals, dowels at some places, opertor's huts etc which are under execution while canals have been operated and water is being utilized by farmers. My first question is

(1) what shall be the date of TOC. It will be the start of releasing water in canals or (ii)it will be the date when all works mentioned above will be completed actually at site. or (iii)it shall be the date when canals runs at full capacity for some period and then inspected jointly and declared that no major damages observed?

(2)  If TOC is issued while some items mentioned above remains under execution in DLP; then Price Adjustment shall be payable for Basic materials mentined in contract & used in completing those punch list items or Price Adjustment is not payable after TOC?

Dear Ishaq Bhatti

Thanks for the question and very sorry for the late response.

Sub Clause 48.1 is reproduced as under:

"Taking-Over Certificate
When the whole of the Works have been substantially completed and have satisfactorily passed any Tests on Completion prescribed by the Contract, the Contractor may give a notice to that effect to the Engineer with a copy to the Employer, accompanied by a written undertaking to finish with due expedition any outstanding work during the Defects Liability Period. Such notice and undertaking shall be deemed to be a request by the Contractor for the Engineer to issue a Taking-Over Certificate in respect of the Works. The Engineer shall within 21 days of the date of delivery of such notice, either issue to the Contractor, with a copy to the Employer, a Taking-Over Certificate, stating the date on which, in his opinion, the Works were substantially completed in accordance with the Contract, or give instructions in writing to the Contractor specifying all the work which, in the Engineer's opinion, is required to be done by the Contractor before the issue of such Certificate. The Engineer shall also notify the Contractor of any defects in the Works affecting substantial completion that may appear after such instructions and before completion of the Woks specified therein. The Contractor shall be entitled to receive such Taking-Over Certificate within 21 days of completion, to the satisfaction of the Engineer, of the Works so specified and remedying any defects so notified."

Please note that the whole process of TOC starts with a notice from the Contractor stating that the whole of the Works have been completed and....................The contractors sometimes make this request early before actual completion in order to avoid LDs otherwise he will always make such a request when only certain snags are remaining  which does not give rise to a situation where Price adjustment is needed. As this is the underlying principle of issuing the TOC, No price adjustment is allowed after issuance of TOC.

You should have a look at your situation and if there is any thing new then you can come with a follow up question.


Abdul Majid Khan  

Construction Law

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Abdul Majid Khan


I am interested in questions related to time Extension, Liquidated Damages,variations, price adjustments,payments, disputes and Dispute Board under FIDIC IV, FIDIC 1999 and FIDIC 2006 Harmonized Documents.


I have been heading the Construction Management Division and Contract Divisions of National Engineering Services Pakistan (PVT) Limited, NESPAK, the largest Consulting Engineering Firm in Pakistan, for more than seven years and two years respectively. I have also worked as "The Engineer" on a number of projects. I have been working in Saudi Arabia for about seven years on a road projects. Additionally I worked as Arbitrator and am member of few Dispute Boards in individual capacity on Asian Development Bank funded projects.

Inland and in Middle East. I have worked with National Engineering Services Pakistan (Pvt) Limited (NESPAK)as my Employer for more than 27 years in Pakistan. In Saudi Arabia I worked for Rashid Engineering, Consulting Engineers during 80s. After retirement I provided advisory services to NESPAK on technical and contractual matters to its various divisions and lately I was appointed as Advisor to Managing Director NESPAK on Technical and Contractual matters. Currently I work as Free Lance Contract Specialist on Fidic Form of Contracts.

I am a graduate with a B.E (Civil Engineering) degree. My year of graduation is 1970.

Awards and Honors
A few appreciation Letters and Honorariums during my service in NESPAK. I remained member of Administrative Committee and Board of Management of NESPAK. I had been part of the Management Committee in the absence of Managing Director.

Past/Present Clients
Most of the Clients used to be Government Departments, Corporations and Authorities. In Saudi Arabia the Client was Ministry of Communications. As Arbitrator and Dispute Board (DB) member, I provide services to various Government Departments and Contractors.

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