You are here:

Construction Law/Financial Charges on Late Release of Retention


Dear Florin!

We are Contractor and working under FIDIC EPC 1999. Contract started on 08 April 2013. "Some circumstances lead the delay of overall project by 2 yrs.  The Employer granted us EOT for 1 yr only (in Dec 2015). Say Original Contract Finish date was 08 Oct 2015. Now, new finish date is fixed as 08 Oct 2016. My question is half of The Retention Money which was to be released on 08 Oct 2015 at TOC. I have 3 Question. (1) Is the Contractor entitled to receive Financial Charges on late release of half of the Retention Money.
(2)  Say Contract Amount is 100 m Rs. and Limit of Max Retention Money is 5% of the Contract Amount i.e 5 m Rs. On 08 Oct 2015, 88% of Total Retention Money (4.4 m Rs) was deducted in AIP's. Is the Contractor entitled to claim delay in releasing of that 88% Retention Money. starting from 09 Oct 2015.  
(3)  The Employer has granted 1 yr EOT while 1 yr has not been granted. In other words 50% delay days are admitted on the default of the Employer. On this base, can Financial Charges of late release of Retention Money be claimed starting from mid of the extended period. What amount should be the principal amount 4.4 million or 5 million.
For information plz note , that in n Dec 2015, full 5% Retention Money was reached so no further Retention Money is being Deducted in coming AIPs.


Thank you for your question.

1. I am not sure I understand the entitlement you are referring to, as I have the feeling you were expecting to receive 50% of the Retention Money at the original date when the Taking Over was due, i.e. at 8 October 2015.

But as per Sub-Clause 14.9 [Payment of Retention Money], the first half of the Retention Money is returned to the Contractor, only "when the Taking Over Certificate has been issued".

If you get an extension of time, regardless how long, the moment when you can get back the first half of the Retention Money is also postponed until TOC is issued.

Hence as long as that first half of the Retention Money has been released upon issuance of the TOC, there is late release, hence no entitlement to any Financial Charges.

2. Again, I am not sure I fully understand the question, but again, no Retention Money are to be released until TOC is issued, at 8 October 2016, or at any other date.

3. Please see above, I do not see any late release of the first half of the Retention Money.

Please read these answers and re-analyse your situation. In case I did not correctly understood the case, please come back with a clearer description and will gladly help.

Hope that helps.

Construction Law

All Answers

Answers by Expert:

Ask Experts




Questions related to Civil Engineering Contracts, using FIDIC or other Conditions of Contract, concerning Procurement procedures and documents (pre-qualification, tendering and contracting) and Services/ Works Contracts implementation matters including Determinations, Payments, Time Extensions, VOs, Claims/Disputes. Additionally, questions related to dealing with International Financing Institutions. Can also answer questions in Romanian. Can not answer improperly formulated questions.


Over 20 years of experience in the field of design, works supervision, construction, management of aid funds and technical assistance for various types of contracts implementation, including severe conflictual contractual situations leading to Claims and disputes. Claims/ Contract management, Disputes adjudication, Arbitration.

Member of Romanian Professional Association of Roads and Bridges; Listed on President's List of Adjudicators of Romanian Association of Consulting Engineers Former member of the Disputes Resolution Board Foundation (DRBF) of United States – nominee on DRBF President’s Disputes Board Members List and of DRBF Chapter for Eastern Europe Former member of Polish Association of Consulting Engineers (SIDiR) – nominee on SIDiR President’s Disputes Board Members National List Member of “” volunteers pool Member of the "Constructions Disputes Resolution Services” International Panel of Construction ADR Specialists" of United States

- Graduate in 1994 the Construction Institute - Graduate of several FIDIC,Procurement and other courses - Graduate of first Disputes Board Members Mentoring Scheme ( - FIDIC Accredited Adjudicator

Past/Present Clients
- Several State organisations/Ministries , such as Ministry of Transport, National Admistration of Roads, Ministry of Regional Development (former Ministry of European Integration), Public Works and Housing, Central Contracting and Financing Unit in Romania and also in Turkey, Croatia and Macedonia - Numerous Western based private consultancy companies - full CV and other relevant information available at

©2017 All rights reserved.

[an error occurred while processing this directive]