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Prolongation Cost Claim Heads

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626 views23 pages

Prolongation Cost Claim Heads

Uploaded by

M Sidina
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 PDF, TXT or read online on Scribd
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UNDER THESE 10

CONDITIONS
PROLONGATION
COST CLAIM
HEADS CONSTRUCTION CONTRACTS MANGEMENT
BY

arithi
EOT COST CLAIMS

lamp
I
Prolongation costs are incurred when a
construction project is delayed beyond its original
completion date due to reasons such as unforeseen
site conditions, changes in project scope, or delays
caused by other parties.

Intro These costs can be significant and are typically


claimed to compensate the contractor for the
additional expenses incurred due to the extended
project duration. The heads under prolongation

i
costs include:

parith
lam
I
SLIDE #1
Overheads are indirect costs that cannot
be directly attributed to a specific activity
but are necessary for the overall operation
of the business.

1. Examples: Salaries, Rent, Insurance


OVERHEAD charges, Repairs & Maintenance to
RECOVERY Building, Professional Fees, Duties &
Taxes, Telephone Expenses, Power and
Fuel, Legal Expenses, Stationery & Printing

arithi
p
Expenses, Tender Fees Etc

lam
I
SLIDE #2
Salaries and wages of site and office
staff retained for the extended period.

2. Additional costs for project


management, supervision, and
SITE STAFF
administrative staff.

arithi
lamp
I
SLIDE #3
Wages and salaries of laborers and
tradespeople working directly on the

3. project during the extended period.

DIRECT
MANPOWER Costs associated with hiring additional
manpower if necessary.

arithi
lamp
I
SLIDE #4
Rental or depreciation costs of
machinery and equipment used on the

4. project site.

PLANT &
MACHINERY Maintenance and operational costs for
the extended duration.

arithi
lamp
I
SLIDE #5
Costs of maintaining site facilities such

5. as offices, accommodations, and


utilities (electricity, water, etc.).
SITE FACILITIES
- RUNNING
EXPENSES Expenses for site security and safety
measures.

arithi
lamp
I
SLIDE #6
6. Costs associated with the delayed
release of retention money, including
DELAYED
RELEASE OF financial costs and impacts on cash
RETENTION flow.

arithi
lamp
I
SLIDE #7
7. Costs related to extending insurance
INSURANCES/ policies, bonds, and bank guarantees
BONDS/BANK due to the prolonged project duration.
GUARANTEES

arithi
lamp
I
SLIDE #8
Expenses incurred to expedite the
8. project completion, such as overtime
ACCELERATION pay, additional resources, and
COST expedited material deliveries.

arithi
lamp
I
SLIDE #9
Claim for the loss of profit due to the
9. breach of contract by the other party,
LOSS OF leading to project delays or
PROFIT terminations.

arithi
lamp
I
SLIDE #10
Additional costs incurred due to the
10. increase in prices of materials, labor,
PRICE and other resources over the extended
ESCALATION project duration.

arithi
lamp
I
SLIDE #11
11. Financial losses resulting from
LOSSES ON advances paid to suppliers for materials
SUPPLIER or services that were not delivered or
ADVANCES utilized due to project delays.

arithi
lamp
I
SLIDE #12
12. Costs associated with machinery,
IDLING OF equipment, and labor standing idle due
RESOURCES to project delays or disruptions.

arithi
lamp
I
SLIDE #13
Financial impact of bank guarantees
13. invoked due to delays or non-
INVOKED BANK performance, including penalties and
GUARANTEES charges.

arithi
lamp
I
SLIDE #14
14. Claims for pending running account
PENDING bills that have not been paid by the
PAYMENT client.

arithi
lamp
I
SLIDE #15
15. Costs incurred for legal proceedings
LEGAL and consultations related to the claims.
EXPENSES

arithi
lamp
I
SLIDE #16
16. Compensation for the loss of future
LOSS OF business opportunities and profits due
BUSINESS - to the delayed or disrupted project.
PROFIT

arithi
lamp
I
SLIDE #17
16.
RECOVERABLE Claims for variations in taxes amounts
VARIATIONS IN that are recoverable from the client.
TAXES

arithi
lamp
I
SLIDE #17
17.
RENTAL Costs of renting machinery detained by
CHARGES FOR the client beyond the agreed period.
MACHINERIES

arithi
lamp
I
SLIDE #18
18.
LOSS OF
RELATIONSHIP Impact on the contractor's
WITH BANKS relationships with banks due to the
DUE TO BG invocation of bank guarantees.
INVOCATIONS

arithi
lamp
I
SLIDE #19
19. Expenses for preparing and
CLAIM documenting the claims, including
PREPARATION consultancy fees.
CHARGES

arithi
lamp
I
SLIDE #20
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CONSTRUCTION CONTRACTS MANAGEMENT


BY

arithi
lamp
I

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