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Prolongation Cost PDF - Password - Removed
Prolongation Cost PDF - Password - Removed
Dear S irs,
Reference is made to the above subject and in continuation to our letter date 13th August
2007, and as per contract conditions clauses “53.1- 53.3 “of contract conditions, we
hereby submit our detailed substantiation of our financial cost Impact of time extension
claim as follows :
B a s ic Data :
** Prolongation C o sts for the Delay Period (207 Calendar D ays) are:
Page 1 of 5
D- Escalation formula due to extended time = A ED 687,500
E- Direct Cost Impact due to late release of power supply & monthly
running power supply cost = A ED 1,500,000
We trust you will find the above to be in order and we assure you of our continuing co
operation and best endeavours at all times.
Page 2 of 5
1. Head Office Overheads and Profit:
This claim has been calculated in accordance with Hudson’s formula. We shall have
to retain key staff and resources on site for an additional period of 207 calendar days
depriving us of making a contribution to head office overheads and profit had it been
free to demobilize and leave the project timeously. Our final claim shall be
determined on completion of the project based upon relevant previous trading
results.
As a result of the said 207 calendar days delays, the financial drawdown of monies
is extended and delayed. Accordingly, we are incurring additional financing charges
by virtue of the fact that interest charges on our overdraft are accruing for this
delayed and extended drawdown.
20,527,755.68 *8.0% *0.55 *(5 Feb 08 - 7 Jul.07) / 365 days = AED 514.712.38
Page 3 of 5
3. Finance Charges on Delayed R elease of Retention:
As a result of said delays we shall incur financing charges by virtue of the fact that
release of the retention monies will similarly be delayed. The finance charges are
calculated at the currently prevailing overdraft rates of 8.0 % on A ED (as per Bank
charges) and will be recalculated and adjusted based on prevailing rates at the time
of issuance of the (a) Taking-Over Certificate and (b) Subsequent Final Certificate.
At this stage, the Retention limit has only been calculated on our Works and
excludes Retention on Nominated Sub-Contractors.
Amount of Retention:
Financing Charges on delayed release of retention monies due to said delays are:
We reserve our rights to claim and be financially reimbursed all claims that we may
receive from our Nominated Sub-Contractors, which will be forwarded on to you for
consideration under separate covers.
The following sums are claimed pursuant to Clause 53 of the General Conditions of
Contract:-
Page 4 of 5
We trust you will find the above to be in order and we assure you of our continuing co
operation and best endeavours at all times.
Project Manager
Page 5 of 5
Associated Constructions & Investments Co. llc
ASCON
5B+G+39 RESIDENTIAL, COMMERCIAL and OFFICE TOWER ON PLOT C2
JUMEIRAH LAKE TOWERS, DUBAI for Messrs STAR GIGA ESTABLISHMENT
Contractor’s Entitlement to an Interim Extension of Time and the Associated Costs, Loss and Expense
DELAY EVENT Nr. 5 - NOMINATION OF SUB-CONTRACTORS AND PC SUMS
1. CONTRACT PARTICULARS
ASCON
5B+G+39 RESIDENTIAL, COMMERCIAL and OFFICE TOWER ON PLOT C2
JUMEIRAH LAKE TOWERS, DUBAI for Messrs STAR GIGA ESTABLISHMENT
Contractor’s Entitlement to an Interim Extension of Time and the Associated Costs, Loss and Expense
DELAY EVENT Nr. 5 - NOMINATION OF SUB-CONTRACTORS AND PC SUMS