Sir,

Pursuant to your above referred letter, my rejoinders are provided as under:

1. The Contractor submitted Interim Payment Application (IPA) No. 17 amounting to
Rs. 1,604,970/- against work done vide letter No. ZKB-Reliable/SKRR dated
April 03, 2018;
2. As the complete evaluation of IPA involves detailed verification of
measurements / quantities, as the contract type is measurement based, so a
considerable time-is required to carry out the same at mega projects involving
multiple scattered activities, therefore, the Contractor in-lieu of the submitted IPA
requested that a provisional payment against work done reflected in IPA No.
17 may be made for maintaining cash flow;
3. Pursuant to the Contractor’s request, a provisional payment of Rs. 300,000,000/-
was made to the Contractor subject to adjustment in verified amount of IPA No.
17. Whereas, the Contractor’s IPA No. 17, after detailed scrutiny, was verified for
a net amount of Rs. 406,651,260/- which was paid to the Contactor after
adjustment of the amount listed in Sr. [3] above;
4. Therefore, the same is clarified here rather emphasized that the partial
provisonal payment amounting to Rs. 300,000,000/- made to the Contractor
was against work done and not as any contra-contractual advance.
5. It is further elaborated here that such provisional on-account payments against a
work done during the currency of the contract are adequately covered under the
contract as all the payments made during the currency of the contract are interim
payments. Regarding which The Engineer may make any correction or
modification in any previous Interim Payment Certificate issued by him. In this
way any amount paid in access is duly adjusted in the IPC. The relevant excerpt
of Clause 60.4 [Correction of Certificates] – GCC is reproduced below for your
reference:
“The Engineer may by any Interim Payment Certificate make any correction or
modification in any previous Interim Payment Certificate which shall have been
issued by him and shall have authority,…………………………[Emphasis added].”

6. The perusal of above discussion clearly transpires that no contra-contractual

payment has been made and all the such provisional payments that are made
during the currency of contract, whichever the case may be, are deemed to be
considered as interim and such, in any case whatsoever, be adjusted against any
subsequent IPC and the same is adequately covered under the Contract.

7. Moreover, in addition to above, this practice is also adopted and clearly reflected
in other contract forms and conditions as well. In this regard, the undersigned
may invite your attention to the Conditions of Contract under Punjab Government
Finance Department Standard Forms of Contract, wherein, the Clause 51
[Payment on intermediate certificate to be regarded as advances] explicitly
provides the definition in support of such provisional payments made against the
work done. The aforesaid Clause has been reproduced in its entirety hereunder,
for your perusal and consideration;

The contractor shall on submitting the bill be entitled to receive a monthly

payment proportionate to the part thereof then approved and passed by the
Engineer-in-charge, subject to the condition laid down in item(s) of the
memorandum, whose certificate of such approval and passing of the sum so
payable, shall be final and conclusive against the contractor. But all such
intermediate payments shall be regarded as payment by way of advance against
the final payment only, and not as payment for work actually done and completed
and shall not preclude the requiring of bad, unsound, imperfect or unskilful work
to be removed and taken away and reconstructed, or re-erected or be considered
as an admission of the due performance of the contract, or any part thereof in
any respect, or the accruing of any claim: nor shall it conclude, determine, or
affect in any way the power of Engineer-in-charge, under these conditions or any
of them as to the final settlement and adjustment of the accounts or otherwise, or
in any other way vary or affect the contract.

The perusal of above establishes the fact that the provisional payment
(considered as advance) is also in line with the Finance Department rules and no
violation of the contract or any rule or regulation has been made in respect of the
same.