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Appendix F: Preparation of Interim Payment Certificates

1. The document provides guidance on preparing interim payment certificates for internationally tendered contracts that include payments in both foreign and local currencies. 2. It outlines how to calculate payments for measured works, nominated subcontractors, varied works, materials on site, changes in legislation, changes in cost, retention money, and the return of retention money. 3. The final section provides a sample format for an interim payment certificate showing the breakdown of amounts in foreign and local currencies.

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190 views4 pages

Appendix F: Preparation of Interim Payment Certificates

1. The document provides guidance on preparing interim payment certificates for internationally tendered contracts that include payments in both foreign and local currencies. 2. It outlines how to calculate payments for measured works, nominated subcontractors, varied works, materials on site, changes in legislation, changes in cost, retention money, and the return of retention money. 3. The final section provides a sample format for an interim payment certificate showing the breakdown of amounts in foreign and local currencies.

Uploaded by

Eticala Rohith
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as RTF, PDF, TXT or read online on Scribd
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APPENDIX F

Preparation of Interim Payment Certificates

General

An internationally tendered contract can be expected to provide for payments both in foreign currency
and local currency. The ratio between foreign and local currency payments will be fixed in the
Contract for the measured works. However, there will inevitably be a number of additional items and
adjustments, where the ratio between currencies will differ from that applicable to the bulk of the
currency.

The final appearance of the “top sheet” of the Interim Payment Certificate will depend on the
preferences of the Employer and the Engineer. For example, it may be preferred that the “top sheet”
provides separate columns showing the amounts included in the Contract (previous amounts), totals
this month and total amounts to date. A horizontally drawn A3 sized document would be appropriate.

Payments to Nominated Subcontractors (including Provisional Sums)

A separate calculation sheet will need to be prepared for the payments due to nominated
subcontractors. This calculation sheet includes the percentage on-cost due to the Contractor. It is
possible that the ratio between foreign currency and local currency will differ from that fixed for the
Works.

Payment of Varied Works

The Employer and the Engineer will need to decide if payment for varied works shall be included in
the general evaluation of the Works or shown separately. It is likely that there will be a unique ratio
between foreign currency and local currency. Further, if the Employer has a restricted budget, he may
require that the amounts expended are highlighted under this separate heading.

Valuation of Materials on Site

Since this item refers to the valuation of Materials on Site, it will be necessary to measure the
amounts of Materials actually on Site at the end of the measurement period. The Contractor has to
demonstrate that the Materials comply with the requirements of the Contract. Values for site
manufactured Materials have to be negotiated.

Adjustment for Changes in Legislation (Sub-Clause 13.7)

Increases or decreases in Cost arising from Changes in Legislation are limited to those costs arising
from a change in the Laws of the Country. Consequently the adjustment will be valued entirely in
local currency.

Adjustment for Changes in Cost (Sub-Clause 13.8)

Increases or decreases in Cost may arise from increases/decreases in the value of both foreign and
local indices. The adjustment will therefore be made in both foreign and local currencies. Standard
practice is to apply the fixed currencies ratio given in the Contract. There are a number of possible
variants. In many instances suitable local indices may not be available. Consequently changes in cost
of local labour and local materials may be evaluated against actual payrolls and invoices, leaving only
the foreign adjustment to be calculated by the use of formula proposed by FIDIC.
Deductions for Retention Money

The amount of retention to be deducted is calculated by applying the percentage given in the
Appendix to Tender until the limit of the Retention Money is reached.

Return of Retention for the Works or Sections or Parts

Once a Taking-Over Certificate is issued, a portion of the Retention is to be returned. The Engineer is
entitled to withhold certification of the estimated cost of outstanding work until it has been completed.
The calculation of the amount to be returned in respect of Sections or Parts is a little more
complicated than the whole of the Works as indicated in the following table.

Whole of the Section of the Part of the


Works Works Works
% % %

Amount of Retention Money 100 100 100


Repayment due on Taking-Over 50 40* 40*
Balance 50 60 60
|
Repayment due on expiry of the |
Defects Notification Period for a |
Section - 40* -------------------------
| Payable only when
| parts comprise a
| whole section
Repayment due on expiry of the |
Defects Notification Period for the |
whole of the Works 50---------------------------

* These portions are calculated by dividing the estimated contract value of the Section or part
by the estimated final Contract Price.
Summary of release of retention money

1. Parts
1.1 An initial 40% is due on taking-over.
1.2 A second 40% is due once all the parts comprising a Section are complete and taken
over. Thereafter refer to 2.2 below.
1.3 The remaining 20% is included in the provisions of 2.3 below.

2. Sections
2.1 An initial 40% is due on taking-over.
2.2 A second 40% is due once the Defects Notification Period for the Section expires.
2.3 The remaining 20% for all Sections is due once the Defects Notification Period for
the last Section expires.

3. Whole
3.1 The first 50% is due on taking-over.
3.2 The second 50% is due once the Defects Notification Period for the whole of the
Works expires.
PROJECT TITLE CONTRACT NO......................

INTERIM PAYMENT CERTIFICATE No.......... FOR MONTH/YEAR...................

CONTRACTOR (Name)

Foreign Local
Currency Currency

Measured Works

Add Payment to Nominated Subcontractors


Add Payment of Varied Works
Add Payment of Claims
Add Valuation of Dayworks
Add Valuation of Materials on Site
Add Changes in Legislation Cl. 13.7
Add Changes in Cost Cl. 13.8

Subtotal (1)

Deduct Retention Money (Limit ...%)

Subtotal (2)

Add Return of Retention Money

Subtotal (3)

Add Advance Payment

Subtotal (4)

Deduct Repayment of Advance

Subtotal (5)

Deduct Amounts Previously Certified

Amounts now certified for payment

Certified ............................ Submitted by .........................

Title/Position .......................... Title/Position ..........................

Date ........................... Date ........................................

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