To:

The Engineer
Mr. Pinaki Roychowdhury
LEA International Ltd. Canada in joint venture with
LEA Associates South Asia Pvt. Ltd , India
Re: Addis Ababa-Dessie-Woldiya Road Rehabilitation Project,
Lot 1: Addis Ababa – Tarmaber Tunnel
Contract 1: Km 14+900 to Km 100+000 and Link from CMC
(Ayat Round about) to Legetafo Bridge

Subject: Employer’s Assessment of Contractor’s EOT and Prolongation Cost Claim

References:
1. Contractor’s letter Ref. No. CRBC/ETH/AT/CM/077/2009 dated July 24, 2009
2. Contractor’s letter Ref. No. CRBC/ETH/AT/CM/099/2009 dated September 16, 2009
3. Engineer’s letter Ref. No. LEA/73064/AT-C1/Engineer/20181 dated December 11, 2009
4. Contractor’s letter Ref. No. CRBC/ETH/AT/CM/151/2010 dated January 4, 2010
5. Engineer’s letter Ref. No. LEA/73064/AT-C1/Engineer/1187A dated January 27, 2010
6. Contractor’s letter Ref. No. CRBC/ETH/AT/CM/164/2010 dated February 12, 2010
7. Engineer’s letter Ref. No. LEA/73064/AT-C1/Engineer/399 dated March 4, 2010

Dear Sirs,

We refer to your letter referred as 7 above through which a recommendation for an extension of
time for the Contractor’s claim head of increase in quantity of different activities as a result of
design changes made for the road length within AACRA limit and Legetafo town is forwarded for
our approval which the Contractor has submitted as per Sub-Clause 44 of the Conditions of
Contract.

In accordance with Sub-clause 2.1 of the Conditions of Particular Application, the Engineer
should seek the specific approval of the Employer before granting extension of time to the
Contractor. Accordingly, we have reviewed your determination and herewith forward our
assessment with respect to the amount of extension of time that it has deemed fair entitlement in
relation to aforementioned claim head.

The Contractor’s Claim submission is summarized as shown below:

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 It. No. Description of Claim EoT Claimed
1 Increase in quantity due to design change 243 Calendar Days
Total EOT Claimed (Incl. rainy season) 243 Calendar Days
Subsequently, we discuss the Contractor’s Claim, Engineer’s Determination and the Employer’s
Assessment of the EOT Claim under each heading of Claim.

1. Contractor’s Claim
1.1. Summary of EOT Request

Through his letter referred as 1 above, the Contractor has claimed for 243 calendar days EOT due
to additional work issued to him through VO-1 and VO-5, which he claimed has increased the
volume of different activities making removal of unsuitable material critical. He initially planned
the activity of removal of unsuitable material to be completed up to February 15, 2010 as per his
approved program. Since this item has increased by 227,225m3, which the Contractor said has
become critical, he has concluded that 145 working days are required for performing this activity
based on the daily output shown in his original work program. Accordingly, the completion date
of this activity is proposed to be November 2, 2010.

However, the Contractor has managed to actually perform 997,026m3 of removal of unsuitable
material up to 30th November 2009 on site against the planned quantity of 831,450 m3. From this,
the Engineer has concluded that the item of removal of unsuitable material will no more be the
critical activity and his claim for EOT based on the criticality of removal of unsuitable material
was rejected.

Following this, the Contractor has once again applied for EOT determination through his letter
referred as 4 above for the same number of days (243 days) on a basis that the item of Granular
Sub-Base (GSB) has become critical. While presenting his justification to the requested
clarification by the Engineer through his letter referred as 5 above, as to how and why he has
changed the sequence of construction, the Contractor replied that he has accelerated the item of
removal of unsuitable material by delaying execution of other activities like select fill type-A,
select fill type-B, GSB, base course, DBM and AC so as to avoid idling of equipment. He has
also stated that by the accelerated progress of the item of removal of unsuitable material, he will
complete it up to end of February 2010, which would ensure enough work fronts for the
subsequent activities. In that respect, the Contractor claimed that the item of granular sub-base
has currently become the critical activity, which shall be completed up to 14th December 2010.

The Contractor further requested for additional days for executing the consecutive activities to
the extent of 23 days for base course, 11 days for DBM and 7 days for asphalt concrete, which
will consequently push the contract completion time to February 6, 2011.

1.2 Basis of Claim

The Contractor has based his claim on Sub-Clause 44.1(a) of the General Conditions of Contract,
which states that “In the event of … the amount or nature of extra or additional work … being
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such as fair to entitle the Contractor to an extension of time for completion of the Works, or any
section thereof, the Engineer shall, after due consultation with the Employer and the Contractor,
determine the amount of such extension and shall notify the Contractor accordingly, with a copy
to the Employer.”

1.3 Contractor’s Calculation of Entitlement

The Contractor tried to calculate his EOT entitlement based on the unexecuted quantity of
Granular Sub-Base, which he said was delayed due to acceleration of removal of unsuitable
material to have sufficient work front for the other activities. The Contractor’s calculation for
EOT is attached as Annex 1.

2. Engineer’s Determination
The Engineer has recommended 189 calendar days extension of time for the Contractor’s claim
based on increased quantity of work, which is instructed to the Contractor through VO-1 and
VO-5. The Engineer has analyzed the claim based on the Contractor’s original work program and
the detailed particulars submitted in this regard and he has put forward the following points as the
basis for his determination:

• After issuing VO-1 and VO-5 the original contract price, which was ETB 867,449,421.12
has increased to ETB 942,751,716.97 with a net increase of the contract price by ETB
75,841,267.77, which is 8.74% of the contract price. From this it is concluded by the
Engineer that as per Sub-Clause 44.1(a) of the General Conditions of Contract, the
Contractor is entitled to extension of time on account of extra work. To this effect, it is
noted by the Engineer that due to the increased amount of the contract price to the extent of
8.74% the Contractor will be entitled to the proportionate extension of time for completion
of the work by 8.74% i.e. 96 days in accordance with Sub-Clause 44.1(a) of GCC.

• However, this approach is not adopted by the Engineer and he has recommended the EOT
based on the Contractor’s justification of criticality of GSB work and the actual time
required for completion of the additional quantity of the work.

• The Engineer has made recommendation by calculating the excess quantity of removal of
unsuitable material that the Contractor executed above his total planned quantity up to
December 2009. After getting the quantity the number of days is found by using the
production rate shown by the Contractor in his work program. By doing so, the Engineer
has tried to get the quantity of GSB, which the Contractor might have delayed by
accelerating the removal of unsuitable material.

• After that, the total balance quantity of GSB, which is the planned quantity by the
Contractor to be executed with effect from January 1, 2010 including that instructed
through VO-1 and VO-5, is calculated. Then, the time required for completing the balance
quantity is found by dividing it with the production rate of GSB.

…/3
 • The time required for completion of the other additional quantities of subsequent activities
is also considered and finally the Engineer recommended 189 calendar days EOT, the
summary of which is shown below.

EOT
Quantity to Daily requested
Item
Description be executed production (working
No.
days)
a b c = a/b
1 Granular Sub-Base 151,640m3 849.60 m3/day 178
2 Additional time required for Base Course 14,134m3 624.6 m3/day 23
3 Additional time required for DBM 43,956 m2 3923.38 m2/day 11
4 Additional time required for AC 43,956m2 5885.1 m2/day 7
5 Additional time required for incidental works 7
6 Sundays 37
7 Public Holidays 9
8 Days for Rainy Season for year 2010 76
7 Time required with effect from January 2010 348 days
Additional time required for completion of the work
beyond the original completion date 189 days
Revised Completion date December 14, 2010

As can be seen from the summary table, the Engineer has recommended 189 calendar days of
EOT, which will push the contract completion time to December 14, 2010. The detail of the
Engineer’s assessment is attached as Annex 2.

3. Employer’s Assessment

We have reviewed the Contractor’s claim in line with the provisions of the Contract and our
assessment is as under.

Even though it is believed that the Contractor needs time for completion of the additional work,
as per Sub-Clause 44.1(a) of the GCC, issued through the two variation orders, we believe the
basis of EOT calculation should be the Contractor’s Sub-Clause 14.1 work program. We are of a
strong opinion that the Contractor would only be entitled to an EOT due to an Employer’s risk
event, on the condition that the total float time available has fully been utilized or the events are
sufficient enough to reduce the total float to below zero and become critical activity.

To this effect, we have assessed the productivity rates of the activities, for those activities whose
quantities have exceeded the original BOQ amount through the VOs, and compared them with
the actual productivity on site of the Contractor. We have noted that the Contractor has better
daily production for some activities on site as compared to the one shown in the work
program. Hence, we note that there is a hidden float in the original Sub-Clause 14.1 work
program of the Contractor for some bills of items.

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We have considered three cases of the applicable productivity rates & amount of work
already executed on 30th November 2009, the period of time applicable for the analysis taken
from the time at which the Contractor filed his EOT request, as shown in Annex 3; namely, using

▪ Production rates of the original Sub-Clause 14.1 work program and planned work planned
to be executed by November 2009 (Table 2 of Annex 3)
▪ Actual production rates on site and actually executed work load by November 2009
(Table 3 of Annex 3)
▪ Combination of the Original and Actual Production rates as well as planned and actually
executed work load by November 2009, whichever that favors the employer (Table 4 of
Annex 3)

The actual production rates of the Contractor, as shown in Table 1 of Annex 3, are taken from
the Contractor’s monthly IPCs, as certified by the Engineer and approved by the Employer for
payment. The table below shows the three cases described above as follows:

Bill Planned Actual MAX

Item Work item Prod/day Prod/day Prod/day
Work Program As Built (C) =
(A) (B) Max (A, B)
41.01 Removal of unsuitable material (m3) 1,571.75 1,846.75 1,846.75
3
42.01(a) Cut and Borrow to fill (m ) 1,447.80 518.67 1,447.80
42.01(g) Select fill Type A (m3) 2,072.20 940.79 2,072.20
3
42.01(b) Select Fill Type B (m ) 669.32 900.03 900.03
3
51.01 Granular Sub-Base layer (m ) 849.60 1,232.93 1,232.93
52.02 Crushed stone base layer (m3) 624.60 677.80 677.80
2
64.01 DBM Course (m ) 3,923.38 2,337.74 3,923.38
2
64.02 AC (m ) 5,885.10 2,238.58 5,885.10

The analysis is based on considering either the planned or actual work executed by 30th
November 2009 to find out the remaining balance of work by the end of that period and applying
the original or Actual productivity rate, whichever applies for the three cases mentioned above, to
determine the amount of time required to complete the balance work from 30th November 2009.
The EOT entitlement will then be determined by comparing the original completion date of the
project, which is 8th June 2010, with the date of completion resulting from the analysis.

We have noted that the first case results in an extended duration of 21 working days for the
activity of removal of unsuitable material. The second case where actual productivity as well as
executed work is used for analysis, an extended duration of 180 working days are required to
complete remaining asphalt works. However, one realizes that this cannot be a basis for EOT
determination because the Contractor’s own default as a result of poor progress of the works
forms the majority of this duration. Finally, taking either of the maximum of planned and actual
values, results in nil duration to be given to the Contractor. However, the Employer has used the
first option to assess EOT entitlement to make a fair assessment of EOT to the Contractor.
…/5
 Planned Duration 30-Nov-09
Original Additional Additional Quantity for Balance Required for Revised
Bill Item Work item
Planned BOQ Quantity due Quantity due Execution (Nov. Quantity by Remaining Completion
Prod/day Quantity to VO-1 to VO-5 2009) Nov. 2009 Works Date
Removal of unsuitable material
41.01 (m3) 1,571.75 933,620 180,345 46,880 831,450.00 329,395.00 209.57 27-Jun-10
42.01(a) Cut and Borrow to fill (m3) 1,447.80 846,960 106,846 58,600 765,920.00 246,486.00 170.25 N/A
42.01(g) Select fill Type A (m3) 2,072.20 1,137,635 34,748 34,960 1,035,120.00 172,223.16 83.11 N/A
42.01(b) Select Fill Type B (m3) 669.32 365,450 21,172 22,386 333,270.00 75,738.48 113.16 N/A
51.01 Granular Subbase layer (m3) 849.60 472,803 9,236 7,415 387,590.00 101,864.05 119.90 29-Mar-10
52.02 Crushed stone base layer (m3) 624.60 285,754 11,374 2,760 219,600.00 80,288.00 128.54 7-Apr-10
64.01 DBM Course (m2) 3,923.38 953,382 30,306 13,650 596,710.00 400,628.00 102.11 12-Mar-10
64.02 AC (m2) 5,885.10 953,382 30,306 13,650 592,140.00 405,198.00 68.85 6-Feb-10

Original Date of Completion = 8-Jun-10

Revised Date of Completion = 27-Jun-10
EOT to be Granted = 21 Working Days

The Employer’s assessment for the Contractor’s entitlement is summarized as follows:

▪ As can be seen from the above table, removal of unsuitable material is the critical activity
on which the EOT entitlement finds its base. Cut and borrow to fill and Select fill type A
and Select fill type B can be done concurrently with removal of unsuitable material as
shown in the Contractor’s original work program.
▪ To complete the subsequent activities, the Contractor needs additional time of 14 days for
Sub-Base, 7 days for Base Course, 14 days for asphalt work and 20 days for incidental
works to hand over, which totally becomes 55 working days as recommended by the
Engineer.

Summary of the Employer’s assessment is as follows:

S. No. Description Days Remark

1 Time required to carry out removal of 21 From Table above

unsuitable material (working days)
Cut and borrow to fill, selected Type-A fill
2 Time required to carry out the consecutive 55 and selected Type-B fill are to be carried
activities (working days) out simultaneously with removal of
unsuitable material
Sub-Total 1 76 Working Days
3 Sundays/Weekly rest days 10 Counting from Calendar
4 Neutral days for rainy season for year 2010 76 From Contractor’s program
5 Public Holidays 0 Counting from Calendar
Sub-Total 2 86
Time required for completion with effect
162 Calendar Days
from 8th June 2010 = Sub-Total (1 + 2)
Revised Completion Date 17th November 2010

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As a result, we have thoroughly assessed the Contractor’s claim under this head of claim and
found that the Contractor is entitled to be granted an extension of time of 162 calendar days. Our
assessment as shown above will result in change of contract completion date from 8th June 2010
to 17th November 2010.

Summary of the Claim

Contractor’s Engineer’s Employer’s

It.
Claimed Issue Request Determination Assessment
No.
1 Increase in Quantity due to
243 189 162
design change (Calendar Days)

Pursuant to our assessment, the Contractor is entitled to an extension of time of 162 Calendar
Days and the revised project completion date will be 17th November 2010. Therefore, please be
advised to convey the determination to the Contractor as promptly as possible for his pursuant
action.

Yours Sincerely,

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ANNEX 1: Contractor’s Calculation of EOT Entitlement

…/8
 Annex 2: - Details of the Engineer’s Assessment

S. Description Unit Quantity Remark

No.
1 Total quantity of Sub-Base layer as Cum 472,803
per pay item 51.01
2 Total quantity of Sub-Base layer Cum 410,030 As per 14.1 work program
planned till Dec. 2009
3 Actual quantity of Sub-base layer Cum 298,256
executed up to December 2009
4 Shortfall in the quantity execution of Cum 111,774 Total slippage up to December,
Sub-base layer 2009
5 Total quantity of removal of Cum 872,310 As per 14.1 work program
unsuitable material planned up to
December 2009
6 Total quantity of removal of Cum 1,005,679
unsuitable material actually
executed up to December 2009
7 Excess quantity of removal of Cum 133,369
unsuitable material actually
executed up to December 2009
8 Number of days saved in the activity Day 84.85 Say
of “Removal of unsuitable material” 85 days
considering daily output of 1571.75
cum per day
9 Quantity of Gravel sub base that Cum 72,216 Considering Contractor’s argument
could not be executed due to that he shifted the GSB resources to
accelerating the progress of the activity of “Removal of
Removal of unsuitable +85 unsuitable material” for keeping the
x849.60(Daily output of GSB) workflow in order
10 Balance quantity of gravel sub base 62,773
planned to be executed with effect
from 1.1.2010 as per work program
11 Additional quantity of Gravel sub Cum 16651
base ordered through VO-1 and VO-
5
12 Total Balance quantity of Gravel sub cum 151,640
base to be carried out by the
contractor with effect from 1.1.2010
excluding the slippage in quantity
for reasons attributable to the
contractor.
13 Number of days required for Working 178.48 say
carrying out the item of Gravel sub days 178 days
base with effect from 1.1.2010 based
…/9
 on the daily output of 849.60
14 Additional number of days required Days
for carrying out the additional
quantity f 14,134 cum of base course
(considering daily output of 624.60
cum as per original work program
15 Additional number of days required Days
for carrying out the additional
quantity of 43,956 sqm of DBM
(considering daily output of 3923.38
sqm as per original work program
16 Additional number of days required days
for carrying out the additional
quantity of 43,956 sqm of AC
(considering daily output of 5885.10
sqm as per original work program
17
18 Sub total Days
19 Add for weekly rest days/Sundays
226x7/6=263 days 263 days – 226
days= 37 days
23 days
11 days
7 days
Additional number of days for
carrying out the incidental works
required for the completion of
additional work in all respects
226 days
37 days Although, the Contractor has been
carrying out the work practically on
all Sundays and days of rest in
accordance with the provisions of
Clause 45.1 of conditions of
Particular Application but the
constructor may claim that he had
to carry out the work on Sundays
and days of rest to cover the back
log for which they are incurring
additional expenditure. As such,
weekly rest days/ Sundays have
been considered for the purpose of
determination of EOT
…/10
20 Add for neutral days for rainy Day 76 days As per work program submitted by
season of year 2010 the Contractor under Clause 14.1,
he had considered net effect for 76
days (neutral days) due to rainy
season every year. As per our
actual assessment of rainy season
for the year 2009, the work
remained affected from 27th June-
2009 to 20th Oct-2009 (115 days )
and the Contractor did not raise any
RFI from 4th July-09 to 5th Oct-09
(94 days) and for balance days, he
raised the FRI’s but work could not
be done due to rains. However, it
cannot be substantiated whether the
work remained stopped during the
rainy season entirely due to rains or
due to any reason attributable to the
Contractor. However, net effect of
rainy season on the progress of
work for the year 2009 is reflected
as under:-
Month % Progress
achieved
April 2009 4.42
May 2009 4.48
June 2009 2.29
July 2009 0.50
August 2009 0.07
September 2009 0.04
October 2009 0.89
November 2009 4.65
December 2009 3.26
Therefore, net effect of rainy
season for year 2010 has been
considered for 76 days as has been
considered by the Contractor for
earlier years in his work program
under Clause 14.1
21 Add Public Holidays as per sub Days 9 days 1. 7th Juanuary-2010
clause 14.7 of COPA (Ethiopian Christmas),
2. 19th January 2010
(Ethiopian Epiphany)
3. 26th February 2010
(Maulid), Birthday of

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 Prophet Mohanmmad
4. 2nd March, 2010 (Victory
of Adwa Commemoration
day
5. 17th April, 2010 (Ethiopian
good Friday)
6. 1st May, 2010
(International Labour day)
7. 5th May, 2010 (Ethiopian
Patriots Commemoration
day)
8. 28th May, 2010 (Down fall
of Dergue)
9. 16th November, 2010 (Id-
UL- Adha)
Note:- Public holiday for 27the
Sep 10 (Finding of true cross)
not being considered because
the same is falling in rainy
season.
22 Time required for completion with Day 348 days
effect from 1.1.2010
23 Additional time required for 189 days
completion of work 348 days- 159
days (from 1.1.2010 to 8.6.2010) =
189 days beyond the stipulated date
of completion
24 Revised Date for the completion of 14.12.2010
work

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ANNEX 3: Employer’s Calculation of EOT Entitlement

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