Construction Law/Price Escalation


Dear Arshad,
My question is that while calculating price adjustmentin the contract governed by the FIDIC 1988 reprinted 1992 version, PEC law will be enforcible or not which states, "Except POL and Labour,if any adjustable materials is not used in the particular billing period then the ratio of current price and base price for that particular item shall be considered as one".

Plz clarify whether can we certify the escalation of items not used in the particular billing period.

Dear Ahmed,

Please ensure whether the Price Adjustment formula is available in particular conditions in case of your Contract.If it is and in Appendix-C,base cost of indices have been specified,then you should apply the formula uniformly irrespective of the consideration that specified material is used or not in a specific month.However,if such wording of PEC is specified in case of your Contract,then you will consider that ratio equivalent to one, otherwise not.


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

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

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

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