Construction Law/Mob Advance

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Question
Dear Sir!

We are a construction firm and working under EPC FIDIC 1999 in DIK PK. The Contract Clause 14.2 " An interest free Mobilization Advance upto 15% of Contract price will be given to the Contractor on submission of the Guarantee......" The Contractor submitted the Guarantee equivalent to 15%. But the Employer is paying 10% and saying that it is not mandatory to pay full 15%. He is saying it may be upto max 15%.  Sir, we made our all financial planning on 15% Mob Advance. With 10% Mob Advance we will not be able to Mobilize at site as planned. Plz comment, an Employer can do it Contractually?

Answer
Dear sir,
thanks for the question.
The terminology used of 'upto' do provide the Engineer to exercise option of reducing the percentage figure of mob. advance.My feeling is ,however, that this reduction in advance should have been intimated/discussed by employer at time of contract signing so that the contractor could have planned accordingly his cashflow arrangements.What he is paying on other jobs of his?
Regards-liaqat hayat  

Construction Law

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Liaqat Hayat

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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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