Construction Law/Materials unavaible

Advertisement


Question
Dear Sir!

We are a Contractor at a Road Project in Pakistan. General Conditions  of Contract is FIDIC 1987 printed in 1992.

We quoted our rates in the tender keeping in mind that the stone quarries available nearby our project (within 10 Km) and being used from 20 years, will be used by us as well.

But recently supreme court of Pakistan disallowed further material taking from the quarries. The decision is based on mainly to save the natural beauty and wild life.

Problem is that other suitable quarries are at-least  50 km away from this auarry and we have to spend a lot of additional transportation cost. For example previous rate at our site of crushed stone was 7 USD/ cu m but now it is more than 10 USD/ cu m. As a whole this one item has made the Contract at least 20% in loss.

Is there any remedy in the Contract to get this additional cost back from the Employer. Our stance is that we were not in knowledge at the time of bidding that we will be disallowed to take stone from nearby quarry. Plz advice us.

Answer
Dear Ishaq Bhatti,

Thank you for this question.

As it was the actions of the Government, in creating additional legislation, that have created this situation then the Contractor should be entitled to compensation for additional costs incurred. In this respect I suggest your remedy is to be found in sub-clause 70.2 of the FIDIC general terms and conditions.


I trust that this assists you.

Kind regards,
John Dowse  

Construction Law

All Answers


Answers by Expert:


Ask Experts

Volunteer


John Dowse

Expertise

Legal; contract interpretation; quantum; delay analysis. Practitioner in arbitration, adjudication and mediation.

Experience

Thirty-three (33) years experience in building and construction, at all levels both within contracting and consulting organisations. Practising arbitrator, adjudicator, and mediator. Faculty approved trainer for the Chartered Institute of Arbitrators. Lecturer on construction contract forms and dispute resolution practices.

Organizations
Chartered Institution of Civil Engineering Surveyors Chartered Institute of Arbitrators Institute of Directors Society of Construction Arbitrators

Publications
Various UK and International construction and legal publications.

Education/Credentials
LLB (Hons), Pg Dip (Legal Practice), MCInstCES MCIArb MIOD Barrister

©2016 About.com. All rights reserved.