Construction Law/Escalation


Dear Sir,
A.I am preparing escalation for my project, its a schedule contract,I have prepared escalation for the following items, Labour,Cement,POL,Steel,Bricks, Sir i want to add up the following items as well,1.(bitumen),2(IT cables), but i don't have format for preparing against such items, could u please guide me how to prepare escalation for the said items.
B. Can we claim escalation on steel products, or it will b just on the reinforcing steel? Thankz in Advance.

Dear Mr. Noman Aman,
Thank you for your question.
I have following to say on your two questions A and B as follows
A. I am not clear what type of contract has been used in the contract being pursued by you. The normal approach in general for adding any item for escalation in the specified list is to first have its weight-age at tender stage by comparing its total value with the quoted price. This part is then reviewed with every interim payment certificate on the basis of indices published by an independent body in the country. Coming to your specific question regarding IT cables, we have to revise its cost part at tender stage with percentages of copper material for which bodies like London Metal Exchange (LME) provide costs indices at regular interval. You have to get more details from website.
B. You can consider all steel products will go through the same price increase trend as the reinforcing steel and may consider its quantum as  a part of it
I hope this answers your question and if not please come back with a supplementry question with more details.
Liaqat Hayat

Construction Law

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Liaqat Hayat


I can answer questions based on FIDIC 4 and FIDIC 1999 [design-build] with particular reference to time extension , price adjustment and disputes. I am in particular more inclined for response to points pertaining to how claims should be framed and put up in case of technical or other contractual shortcomings. Regarding procurement matters I have spent over 5 years as procurement specialist for highway authority and dealt with numerous claims and disputes in the capacity of "The Engineer" .

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