Construction Law/prolongation Cost

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Question
What is Prolongation Cost?

Answer
Dear Faheem,

Your question is general and does not show the specific scenario for prolongation cost.As per my understanding, once an extension of time has been awarded, the intention of most construction contracts is for the contractor to be reimbursed for the additional costs which have resulted from the employer-responsible delays. Basically, this involves a comparison between the contractor’s actual costs incurred and what the contractor’s costs would have been, had there been no delay occurred.

It is very important to keep in mind that compensation for prolongation should not be paid for anything other than work actually done, time actually taken up or loss and/or expenses actually suffered by the Contractor. In other words, the compensation for prolongation caused other than by variations is based on the actual additional cost incurred by the Contractor. The main objective is to put the Contractor in the same financial position it would have been if the Employer Risk Event had not occurred.

Hope it will help you.

Regards
Engr. Arshad Mahmood

Construction Law

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Arshad Mahmood

Expertise

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.

Experience

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.

Organizations
Member -Pakistan Engineering Council Member -Pakistan Engineering Congress Member -FIDIC Organisation

Publications
Joint Venture and Consortium Agreements for Pakistan Engineering Council,Pakistan

Education/Credentials
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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