Construction Law/Contract Law
I'm highly indebted if you give the answer!the questions arepresented as follow.
A construction contract has been signed between a certain employer & contractor for the construction of dam for water supply purpose & water treatment plant. The total contract price
being ETB 1 Billion out of which ETB 600 Million has been allocated for the construction of the dam; whereas, ETB 400 Million has been allocated for the construction of the plant. The plant is expected to treat 300,000cm water per day. The completion time shall be 800 days. If delay occurs, the parties have agreed to calculate delay damages of ETB 200, 000 per day. The maximum amount of delay damages shall be 10% of the contract price. The dam & the plant have their own sectional completion dates. The dam has been completed on time. The Plant has been completed 300 days after the agreed sectional completion date for causes attributable to the contractor. The plant capacity has, up on completion, been reduced to 250,000 cm/d. The employer has requested the following remedies from the contractor:
1. the payment of delay damages up to 10%of the total contract price;
2.the reduction of the contract price due to reduction of the water treatment plant capacity;
3.Some amount of money i.e. ETB 500 Million for the net loss of water sales (i.e. up to the design life of the dam & the plant say for 50 years) due to reduction of the plant capacity
(by such 50,000 cm/d) based on the MDB-FIDIC (2006);
what will be the answer for employer's requests based on MDB-FIDIC (2006)?
I can only say that the delay penalty shall not be based on the contract price but on the price of the delayed section except if you have a clear statement in the Contract to the contrary.
Actually to really answer your question, please advise on the following:
1- the type of contract - design build or design bid build....etc.
2 - (The plant is expected to treat 300,000cm) . Advise if it is expected or required
3- completion period and Notice to proceed date of each section
4- who decided that the delay :(causes attributable to the contractor)
5- any other info relevant to the reduction of plant production.
6- the statement in the contract about delay penalty
Please provide the above so that I can give my answer without relying on assumptions.