5/7 ye
Amibara Drainage Project
Contract A0P/T/01/QQ
Drainage Work.
Preliminary Report an Contractor's Claims
November 1994ContenLa
I*        IhLrcductiuh
1.1        Scope of this         Report
1.2        hrirf History          of the Contract
I*11   Clink* Presented 
J< General Aspoctn of the Contractor'll C Ini ins
, *
Page No
1-1
1-1
1-1
2.1 
-Si?n» r al
2-1
2.2* 
luai.s
2-1
2.3 
Extension* of
Tiw
2-3
2.1 
oilh i Matters
2-4
3.1 
Claim   Xu 
1   - Late MubL1i*ut Lon Advance
3-1
3*2 
C l.iiai  Nu 
2   - Late Custom* Clearance
3-2
3.3 
c L*i*i No 
3   - w l thho Id hiPe mi sis Lon to 
Aspect . liI Specific CluLms
Coomence the Works
U* I    1 Lam  So    4   - Lack of Possession of Site
3.5      Chile*  No    5   • Heducud Productivity Of Workforce
3.1*    Claim   No    6  * Care of the Works IFloodirift)
J. 7     CiaJ*    Xu    7   - Unforeseen Conditions at
MD1 and SDl
2.8 L’laUk Jn> U - Late Ch.m^es in Design 
Of the Works
J. 1!        Claim No ’j — Chnn^es in Cost. Le^ islat ion 
3.1Q L'ha« No IU- Kentmimng Order against
Novutaivm. of the Contractor1s Veh a*Len
3-4
3-5
3-10
3-12
3-14
3-15
3—17
3-1^
• < Pre Iia.h.u -j CoMclusluns and Actions Required
bl Gael- Cl-*uh 
i.2          Piel lOMinry SuMary 1 + A  b i1 tt f M ,-h l i e r &
1^1
■ ■<• iJ. J
In troduct iuti
of Lius Report
*•
Ui.i report
un initial view of the claims,on Contract ADP/T/01/90
Ln-aniULju kuft'.s presented fay the Contractor, Joint Venture JR-Dywidag, in their cLuu document dated September 1394, and received by the Engineer. Sir M Msibanuld Lid. m October 1991. Some general principles are established for
. dumtiug Lkt claims, and observations made on each so that action is now
i.b'iit if Led for clarification*- from the Contractor or other actions required 
< l.he Engiii'v-r and the Employer.
i ^.scipiehl upon the responses and findingdi detailed evaluation will be ablv 
Lu proceed.
7 dRunar) ul’ oar preliminary view is given.
J. 2 iJrA-f Jh story of thti Contract
IT.. CuntrueL u ... let in September 1991 and the Order to Commence issued on 11 >• tober 199k. Ihu period for completion for the whole of the works is 30 
. dillj7» with .* cGk-plction date of 14 April 1991. There are two sectional ...i ietiun ruqu i reiikents for drainage in the Melka Sadi and Amibara areas
s-icLtiouh 1 and 2 1 which coincide with the completion of the whole of tin* 'l ■ V 1' I. S ■
r
f
Lli- works arc si ill continuing (at November 1994). Manholes, outfalls, and :■ l ; uuture^ sl*l! require to be completed in both lhe Melka Sadi and Amibaru 
•u._.s, ajsd tlir crust ruction of the main drain is outstanding in the Arntbaru 
_i. L. A pnjg.aiuuv allowing programmed and actual
• i -urk is Uiu mi in Figure I. Work is currently suspended u. t.use access is denied to the Contractor by 
di interiu extension of time for the whole of
•I..- Cuntmi toi io 11 January 1995.
J . .7   0 J > 11 Pr vat.4 Jj £ cd
completions         for the main   types on the main   drain
the Afar.
the works has been         granted to I
I     L-'i.iiitriiL i ^.rt I...!- presented his claims in his documentation:
"Conti    I    or1      s    Assessment    of    his    Entitlement    to    Extension    of    Time    and Cluia for Additional Payment" dated September 1994
.i. - suua-»ry \ulumr supported by a volume of appendices. Much of the ho.     j‘       itztttivh     .oid     detail     for     these     claims     has     been     given     in     earlier
. ui reHpoiidvhcu Lu tile Engineer's Representative,
fl ■
',11 %iiiMiikry, Ik*, damn* are Listed in Table 1.1, There is no general numbering 
. laiiLS lur this Contract,* so for brevity this report has selected numbering 
I IL .azctirdaia’e with the paragraphs of Section 2 of the Contractor's summary.
addition     the     Contractor     ha^     indicated     that     he     expects     further     claims     Ln 
l.rspect    ol    ContihUL’d    supervision    ul    the    outstanding    Subcontractor’s    work    and 
1* iibiincing Lliur^s.
1  * • «l
r.L    the    Contruct    rate    of    exchange    (I    Birr    =    D.77B7    DM)    the    total    claimed represents 19 percent of the original contract price excluding contingencies.
1-Jrcent   Lu   loixitfn   currency,   and   170   per   cent   in   local   currency   though   this L\t,i    tidtea    uil.j       account    variation    of    price    provisions    and    in    real    terns    iw j-jijh ide raid y lc-Si.
Table 1*1
Summary oi* Contractor*a Clulus to the nearest unit of currency
C la. ia/Oeser i pt ion
Cost
DM
Coat
Birr
EOT Weeks
I. ale Mol. il Isat icn Loan
170 7G4
393 414
11
2. Late Cu&Lumti fit cirance
960 708
2 907 938
23,3
i. firhbul- Ve.'iiiisiion to
nil
59 598
’ 5
LatiiCuc-kCu- tin' Hurts
5. Lnt.k of pL-is«!-Sijun of Site
265 130             3 981 779
18
7. U-rdUL’ed ProducLi vily
190 143
1 501 474
nil
Laiu u: lLl- korks (flooding)
79 404
619 5511
9.5
7, Lnfursi-vji Conditions at HD1
nil
1 040 124
7
3. Late Chatr/fcs in the Design
877 221
3 7S7 768
22.5
of the Hork^
u. (Irniigua Lu C’usa Legislation Il J^sLrniujjig Order against
Muvuiucnl ol' Vehicles 'I’uLal
Original Contract Price
29 902
5! 309
pending
0.5
’       ft
2 493 8GH1 14 312 985 21 414 250 8 208 303
1
41
751
1
*
i 1-1
» .
I
k
f
. '■
f.
-1
*r
*
4'
■
5
un uppurdnt discrepancy; the ’ ux* Section J.C,
!■
correct total appears to be Birr
1 051 61
apparent    error    in    Lotalling;    correct    total    flirr      ?    573    271
0
The sdai of the totals (97.8 weeks) ’« 
i
“ mJ is ieduced by concurrency
J'2-
XSTOSnaM i’Hoiect programme of wib
-Scf . (>fL
Ju! ■ Avf Sf'Orf Krt ft. Jit Itb K*»-
F»b Mtr; If
— Vrt     i‘a
K ••>   Per   Jit F«t H*» Apr' M»i J.t
Or*. Kn
’•3— 1
-U
1
1
1
!
,
.i 1
»
1
f :r rviuix-i h
• .:" ' • 1 •
I
'■
i
I
t
I
S.fbc*
i. t:.r.Ms 5.u t e-ir_v AM S.~b.*ftK£lDM.-
S-«du»CT&WA&
Cjrirt-tcfnA'
S^-eicB   P°P    KOI,   MS S-3.-r <*•»-€ M>P
f  .'!k» i  4 •  T*’P £'.MJ 5ix~     P0^:*     •    *’     • SizfcefeitOP     £’     M5 Sefastiis POD. 'XCfiivr-U                      of the CowtractorCJains
2.1- General
II i-i eshi.jii^-Ll that in dealing wiLh any clain* the claim it* reaniLy 
lX m 1 fluLle *. itliliL the f ramuwurk of the Contract. This normally Means a rull-reii^c to a specific Clause of the Conditions of Contract* For
l oiii met fcr ADP/T/01/90 the Part I Conditions of Contract are FID1.C 3 with 
r«u L U Conditiuns of Particular Application which generally are those
i . .bjuntended Ly th*-* World Bank and commonly adopted by other international
. dmlijig at >  hc’j i s * In particular the Part II Conditions include Clause 52(A) iicem i n- ci.ij mH for costs which clause has breoue standard in the subsequent
i'.lHC 4 , and w.Acli in wu inquiry requires:
•
fc
Contractor’s notice within 28 days of un event that lie intends to 
clo- (G2(A)1).
inLrium accounts every 28 days thereafter (52(A)3) *
final account fur the event within 28 days of the event having 
uGiicludud (52(A}3).
iias suhuhr;. is enlarged in Section 2*2 below
. ii.*su Clauses *-hich are applicable to cIhIdu allow entitlement under the hemhi
»4 t
“                 CO L
Lfhr.juns of tiitte,
1 i □ noL aM<ik|uLic that, both will apply for each such Clause.
-l., procedural requirement (iiormully notices of impending delay, or the
itrc-ncv gl Lkiiurd iatf past cost) which is a precedent for entitlement mbi
i *■ « u .11 or d by i.L-r Con true tor ■
2-L’ Coat^
L.uci'al      puna:,      of      principle      which      must      be      applied      to      any      claim      by      the i •uil.ructur for mldilioHul ousts are:
msL means identifiable expenditure or loss suffered,  and  does hi-1  include loss of profit,  or conjectured  loss such  us Lkpu L ik_ui. lura cl borrowing rates of lute rest on monies expended,
<- -as do not uutoeuit icaj ly arise as a result of a justifiable
Qf time, and are not directly inferred in Clause 44,
a    jiinciple    of    common    law,    the    Contractor    has    an    obligation    to u.l’      Employer     tu     mi     Ligate     loss,     usually     by     the     redeployment     □( i• -juries (in particular plant).
...    I    11    regard    Ll.     tin,    notification    and    claim    of    cost    under    Clause    52A,    a    brief pre. is of i hi-. Clause is as rolluws:
,,: -A(l). 
I he Contractor shull give notice to the Engineer with a copy to 2-Jthe    Employer    of    intention    to    claim    within    28    days    of    the    ewnl n-vmg arisen,
■AC’);               The     Coiktraelor     shall     keep     records.     The     Engineer     shall     inspect JL ii records and may instruct the keeping of additional records.
32.U 3):              Within 28 days of the notice the Contractor ahull supply an 
liJeilu and supported statenont of amount claimed.
‘Ail   kin   2H   days   of   the   end   of   the   event   the   Contractor   shall   send u final account.
324(1)
i.  ihtf Contractor fails to  comply  accordingly,  his entitlement shall nut exceed  that amount which  the Engineer cun  verify  from
■ u.y records kept.
:la!£) VI.i- iViiitructor is entitled  through  interim certificates to  suck payment as the Engineer may  consider due after consultation  with tin* Employer nnd the Contractor.
JlUrr 2.
1 ;i 1 O*S ,
I . lll£c
1 shams luw the significance of cost components in the consolidated including | he FC/LC and the Con tractor/Subcon true tor divisions. 
mGju? types of costs become common to a number of claims, (and wune will be evident lh either rates conpanents), then home general
fc .x lnt:iLjlt-.H. nd) be comr&un. These arc discussed as follows.
/b L.‘.|i^t 1’. .*Ll! uu'.lh
the time charge rates appear high.  Evidence of salary, allowances,  social and  overhead  costs should  be produced,  taking Lj.lbj account VOP,
j, Dl’l'ict and housing costs in Addis Ababa
ewdeaue of these costs needs to be provided mid probably need 
a. re«nueiiL on base costs fur rehl, tied standard services
E lcelricity, water) as there is variation in the mouth by month 
.aJuuiiU,
w» m- those offices used for any other project or purpose?
k 1            , at I .a;d office running costs on bile
..ihke-up     of     these     costs     need     to     Le     provided;     there     is     wide v. ;        ..,j. In the monthly charges appeal lug (compare December 19 D2
Birr   3CH   932   with   the;average   of   birr   12&   2G7   given   in   Section £.3.1.3      of      the      Appendix      volume),      and      a      reasonable      average taiimalc    in    terms    of    component    casts    Iservicee,    numbers    of    staff) should be substantiatedi
Ii is quite possible that capital costs have been  included,  which ul course should  be recovered  only  as depreciation  over a life J.idi may be different to that of the Contract,
2-2I\ plum cu-.t
,L  -Jiuuld  be checked  that the figured  indicated  are depreciation only,  i.e.  no  running  couu  allowed  (no  Birr expenditure is indicated) ’■ capital values need to lit- supplied by the Contractor,
.11     1 i J Uh U I UuC’?ll.
i.iCru^ed     costs     only     are     to     be     reimbursed     under     Clause     65(4); wl.ac ire the cost components of the Margin?
..h -.'ouLr.N iiii 'i resources utfex* 18 week delay
Ln.- su  pped  plant would  have been  stationary,  i.e.  to  some extent Lii.  running  costs are reduced; component depreciation  and  running l i/t is should be given to indicate huw this is allowed for,
Lhe number of breakdowns, which of these items was (1) and (li) required to undertake work on the days of
ucLlj* claimed (it la possible that average figures should be
rr u» cd lu establish this), although some allowance nay need to li< made for repair and Maintenance of well-used plant,
n
LU-],Lor' s Site Overhead.-, (Staff and Labour)
Ar* these rates in line with those agreed for additional payment* h.-,4i»-re? Salary sheets etc will need to be provided* Was all
l.hi*. staff present on the situ? The slow rules of progress has
h.-ei* queried on this point by the Engineer’s llepresentative in 
hi r. letter JV/502/94 of 21 July 1904.
- . 7      jL'x I cjj j lhiri o / T x Be
•■ H ml paid • of principle which must be applied to any claim by the
-uiLracLu. fur extensions of lime are:
d.    *    does    not    imply    automatic    extension;    the    delay    event    has    to Le     on     Lhe     critical     path     fur     the     Section     of     Works,     and     this normally requires uampurisuti with the Clause 14 programme,
the Contractor s rate of efficiency must be taken into account, against Lender and Clause 14 prugranaes which should 
1
ivprrscnt what.arv reasonable rates of achievement; this would -jh Ludf actual operational rates and Lhe amount of plant in 
i. l vice as opposed to awaiting repair, 
,
concurrency     of     the     delay     with     other     delays     (justifiable     and     of tin Contractor’s making) has to be taken account-
.'k.Lihe    44    implies    that    the    Engineer    cun    (but    is    not    obliged    to)    take    into account    matters    which    have    nut    been    notified    by    the    Contractor,    but    which    h* 
■.^insiders justify an extension.
14iw    Contractor    lias    taken    suue    concurrency    into    account    in    his    estimate    of extensions (s^ii fur instance Appendix 8.4) and overall where he has claimed
2-3.  7  j  rieeL  Lui..-,  iuii  tmt  the  total  uQifcpcnents  are  9B  weeks  (the  difference  does
i.-^l     Kppcm   Lu   Ikj     .-^plained).   What   will   have   to   be   borne   in   mind   is   that   the irjm   Lion   ul‘   u   particular   claim   fur   delay   nay   open   up   an   otherwise   cancurrent ex ■ -.1 iiL,
Ah interim i-xl.i*JisiCtn of Lint! of completion of the whole of the works to list
-l.aiuary VHi5 L^n. already been granted which aiiiOuiils tu an effective extension 
4’ 9.5 muir.hs I'roiM the original completion date of 14 April 1094 (30 months
-•'I. i' the iy.se- of the Order to Conniuiice). Ab an interim kusuixs the grounds
fi r tills h..v,r not been defined; extensions awarded as a result of this claim
.’SUiLuLlCih lq^L be offset against that extension and the earlier Sectional
■/ijpleLiui uf Lin.* Aaibaru area within 24 monLha.
- - / Of b..-J* JM a £ L < • rd1
2. j. 1 CkH f ajiiib rji,"' /'Lal Lera
Li* Sactiwu 2.2.1 of his Claim summary, the Contractor 1ms given noLifiemtion 
. LVu uaLstaji.j j ii4 ureas of claim:
additional expenses far supervision  by  his Agent of the subcontractor’s work  over an  extended  period  of 14  months,  and. 
l‘iaiiucuig charges which have not been included elsewhere. -
FxU.'jJul/ Supert'isjon
i   .1   the   bn   ceeiiir.;i   Claims   art   fully   evaluated]   it   is   not   possible   tu   indicate i',s   vulidLzy   -   t   lliis   claina.   However,   it   is   most   unlikely   that   the   period   of II   months   will   Le   found   valid;   much   oT   the   Subcontractor1     s   delay   is   thruugli
h   *a     own   ihuf   I'   l     v   i   jncy,   lack   □!   sufficient   resources,   and   inability   to   keep L     .iit     .en’kLi-jji.al.•     This     is     evidenced     by     the     ftE’s     Letter^     JV/3cj7/94
niiJ
*1/502/54 af 2-1 May and 21 July 1994 respectively.
Fj hbiat’j ft £ Lusts'
I'Ll- finaiu i,iJ
haw to be established as costs of overdrafts, loan
jjiLii.iions eve. f and not ns interest at standard bank rates; on ussuimed 
• i it li-btiL'.tuS, 'a .aid l I ion such costs should be suLuilLed as interim statements -4CLordi.il. e- hilli clause 52(A)(3) and not left until the final stages of
uL.ii . 1■k_ -li 1 i *ij« This has mil been done, and therefore Clause 52A should be
1Tabic 2. I
Cost Al Jurat lens by Type
’009 unit of currency
Clair No
Cw . Type
JV : pul riMe Cot U-
1 
2                  3
6 
7                  8                  9
-                     48G
JV i-lant Costt                                                                                   313                              104
1(1           122                79                                 312               11                          1371
JV 5-aff Standby                                                          171
•37                                 358                  8                            763
-
JV racialist Standby Costs
JV •-rdship Allowances
JV freight uPVC fittings
-              162
-
-
-
-
-
-
-
68
-
-
-
-
-
-
-
-
7
17]
If?
68
7
JV irptiir Damaec-d Equip
-
-
-
•1
-
-
JV ..sts of Confiscated vbcls
-
-
-
-
11
11
7ctal DM
171
961
-
1
I
265
190
79
877
30
2573
net
Birr
JV C:fice and Housing
44
436
-
115'
-
66
•
380
8
1049
ddis Ababa
V
JV Ucal Staff and Office
-
G06
207
-
128
841
22
1804
JV l:ss of Margin
323
691
206
-
118
691
15
2044
JV Tnsurrage Costs
286
-
-
286
JV Additional Transport
19
-
-
-
19
JV Reduced Productivity
1501
-
1501
JV rioto documents
Sy
•4
•“
JV reconstruct Access Rd
-
•12
5 -
JV Etxedial work
?*187
t-
JV Impairs to Danaged Equip
•
•6
i-
JV C*. er time at Dinilc Hill
i ,T» «*
6
•6
f.b-total JV Birr                                                    367            2038
- 528 1501 312
net
r
-            1912                51                           G09
EWKCA Plant Resources                                                                637                57
EWCA Staff/Labour
-               233                  3
2553
900
• 167             819           1405                                               5471
»C6             221              378
1)35
Staff on Standby
EKKC-.
Repai rs to Djke
EWG*.
EKKC.lRepairs to sin. floods
EM*
EWCA
Remedial Kks Surf. Drng.
Additional Survey
S.b-total EKWCA Birr                                            26              870                60 T:tal Birr                                                                393            2908                60
of flood relief
3453
?*244
308
net
1040            1845
1040 3757 51
r •/
3981 1501 989
net
Iperiods i" >hich DeJays Occur
Mont).
Clair. Descr i pt ion
fprf' •£•
L
Sl.hjt
4.   Ar.-ess     -     canp
Ac:ess - site
C   fl.cd - inundati
Fl.rd - reaediction
i.        W. SD3
8    Design Delays
Month
Subsurface
1.   Lat? Advance
2    Curtoss Delay
3.   Delayed Start
4.   Acc-jss   -   Dinile Access - site
6.   Flccd   ~   inundation Fired - remediation
8    Design Delay a 9.   Cort Legislation
Month
0 K D J F M
continuous    delay    of intermittent delays
AMJJASO*Dj
f;m a n
n weeka;
with aggregate of ■ seeks. B*tt delay
.IJowinl for concurrency wit',
alber Claims
Claia : - no delays; Claia 10 pending
t-’syr yI; I
I
I
i
i
i i. i
i
I
l i: E
(I
nJ-
U/ Specific CJttiwf
/ Claim .'/□ / XaU* MuhilJulian Advance
*■*
u.l. i Gtfuc*r~ul
><> ■ ■■ '■'
) he Order to  Cuitwence was given  on  14  October 1991.  The nobi 1  Is&tion  advance pa.-iM.-nts Hv-rc received  by  the Contractor on  18  December (Local Currency  Birr l ,2  uiLlion  uuL  of ail entitlement of l.b  million) arid  30  December 1391 :.u.vign  Currency  in  total).  The Contrnctor contends that this payment la late
.   _i.k.   .   the   ter-iis   of   Clause   GO(11}   and   that   in   consequence   he   was   delayed   by   11 
.    hi    and    suffer.-d    the    standby    cost    of    personnel    assigned    to    the    Project    (DM i’u j‘U4 and Birr 393 444).
J. /. I* CciMHen f
i
a
IU
i’hjt.u- GD(ll) does not stipulate that the Contract cannot commence until the n.iL.  1  jsat ion  payments art received  *  so  there is no  entitlement under to  any d.’I i. and refill Unit costs from Late payment. The matter was not qualified in
• h funirui loj-* tender. The only entitlement if the payment hod been
•      -i     .d’ji.'il     bj     the     Engineer     is     for     Interest     on     lute     payments     under     Clause du( UJ).
IL. iuiitriuiLui ‘s contention that the Advance Payment Loans fall outside of-the
Cerli    f    i    c.itiuii    uml    payment    procedures    us    "separate    certification11       has h        r^utt     ucLullI       iiixi-i.     There     is     no     other     specific     procedure     stated     in     Clause
.ulll)      arid      llicivlurv      Clause      £(J(10)      applies.      Payment      was      made      wjLhin      the
.   .   j   ibed   periud   of   2ft   dayy   foe1    cert   if   i   cat   ion   (Clause   60(2))   plus   GO   days   for
.   i.   i   .    hi      i.tti.   HH   days.   If   interest   is   due   than   this   needs   to   be   determined   in ri.-y..,.ruL   of   the   balance   of   Birr   400   000   which   was   paid   aL   a   later   date.   Such mH rc:iL has been p^it! and is not contended by Lhe Contractor.
J.k Ci-oiLi-ucL^r'i -xi guiuenl about the programme is irrelevant; in Tact Clause 1 h II requites ^abuissiuti within 30 days of the letter of acceptance, i.e. by 
17 J.-Luber 1-ibt. Ik- did not submit the programme until 19 December 1991, two lull .
. 1 ¥ .1 Cutie h/.'‘ iluj
i. lure CJ.-ia 1 fails to succeed and no additional coats or extensions
; liUt uit due tu lhe Contractor. The Engineer‘d letter of 11 November 1994 
s
Lu i !h Contrs.eLur
refers.
3’1.7. J CLua iVu 2 Late Customs CJeartuicc.’
J.". / Gettend
I In- CmlracLiH’ uuuLends Llmt there were many administrative obstacles to the m [..him payment or b’Suapllon procedure laid down in the Contract and that the
i , iti Lane delay* *ere due to lack of assistance from the Employer in dealing ilh i Im Clisl^ws Authority. He conLends that 01* sea freight the delays were
.... i. ci 35 and JIG days and that on air freight there was un average delay of ;•; Jays* Th* total cxtriiKicn of time claimed is 23 weeks and 2 days, and ... u*. iutvd                 Lrf u:-l 0J3& aillion and Birr 2*9 million.
-■■ ji ,j .
.                 Co Ju i -n 1
j’.. L.-rus of the Contract applying to the import of ite«s were amended from
-.I..- original t'ui I. Il Condition^ us a result of pre-contract negotiations, anil
ii,< er MM*d Versiui. appears in Annex lire 3 to the Letter of Intent under Clause
which pre. ides as sumaurited below:
t»^p<4.ny  imports (construction  plant etc.) allowed  against a Ikbuh  u  .iarain.ee covering  duties otherwise due; such  Guarantee to 
b- i-.-lija-M’d  on  re-export or payment of duties if sold  in  Ethiopia payim-ul directly  by  the Employer of duties on  items required  for the K«r auhent tiorks; the Contractor to  have obtained  conf i mat ion 11ok  the Engineer that such  items are for the Project ,  and  to sapp.i copies uT the Customs invoice for duties.
uh. limiL-* are id for these procedures to be cleared*
.in..- G. ntr.ictur has. nut expressly slated why the system did not work in Section 
Iu this - laii.l.
11- L •; .luLi - lor huat shipments are those listed under Section 3.4.1 of the
■           u ,1. ..-i. rb( i .e. the tiue Unit elapses between the ducking of the ship and the
■   ... uf ike tui-uch fruu the docks uud the comparison of those tines with 
i ..^uuaLLi- expejlu-ion. WhaL is apparent is that the critical delays
... J tu uceui hlth Lite i Leu* for the permanent works
n It i-eferoiue Lu lIiv delays in clearance of airfreight, it is not apparent
these sp.ues hud tu be air-freighted, nor why all items were critical to 
lb* • JhLiijUed uperutiun of plant as clniaed. If delays occurred it night be
:.u ... 1> toec.'at'bU L.f Lad plumiing.
• I Ji.> cl.lIih ii accepted in principal, then a number of points have to be
I uiicd:                                                         ,r,
luLerhal     concurrency     between     delays     of     items     between     different ship I Wikdi ,
jnLei sial concurrency  between  delay  oT  plant delivered  by  boat and criLic.d  items of spares (to  make such  plant operable) delivered by uir and delayed on clearance
external      concurrency,      particularly      in      respect      of      cost      between Lheri. dtrluys. aiid those claiflied elsewhere (note the overlap of the
3-2p.«rtud   August   to   December   1992   with   that   under   Section   5.5.1   oi SvH.ulivr 1992 to June 1994.
j ‘ Uy HXL.vaJ U that of the M.S. Andinet which was carrying the Pip;:
HwImLion an item of the permanent Works. The ship arrived on 2* 
o^hsl 1994. Ike details are given in Section 3 of the contractor's claim. 
i r. seem. Lu b three key areas of delay:
late general submission of the docunentat ion to WRDA on 29 July 
.h!j, three days before the ship arrived,
i     he     cutisequent     delay     which     resulted     froai     the     manufacturer’s cet  I  ificute  being  obtained  between  KHD.Vs  request  on  G  August  and th? Contractor's response on 22 August.
ih<r final delay between the Custom's Estimate being handed to nttbA     lur     payment     on     B     September     and     eventual (presumably immediately consequent on payment) oii 22^
clearance December
It only the delay on payment that may be the responsibility of the
j i.  J -rju-r. and In- should advise when the payment wus released to the Customs, 
testing machine, which is an essential item in the production process did 
»i»a ai i iv.- Assab (vessel "Omo Wonz”) until 3 September, i.e the extent of
del.i) .4.1} b>- iiiiLigated because of the later arrival of this item.)
J. r. tYincJi/.s ion
.a    r    •    are    a    nJubcr    of    matters    which    need    clarification    from    the    Contractor
.       .-j hiiig the reusuns l'or the various components of deluy (if any). For the
i .i data presented, further extensive clarification is also required.
H i- expect i-d that lhe real delays are probably only one third to one half
uL those shown id id lhe extension of time will be reduced on the critical path 
■ • i.v Lwcuji 7 and lu weeks. Costs associated with this will be correspondingly 4 tinned, and I’ui L].,-r reduced by mare realistic assessments in response* Lu hauls raised iu lcjluIs around DM 0.3 million and Birr 1 aillioii.
4
3-3Chu* Ay .7 thhuJdingf of Permian J on to Commence the Moris
J..7.1 Genera/
i'li    Engineer's    Rrprcsentative    !uid    not    allowed    the    Subcontractor    to    start    work 
,r The Clause 14  programaie was not approved.  The Contractor contends that Lui.  uf app  renal Joes iioL allow the ri<ht to  stop  all work,  and  that,  in r|,  .-Lt a husp<.-ut,ion  under Clause 10  had  occurred.  He claims a five week iLia> arid  jaktL’d cost of Birr CO 000.
J, ,7.2 GpUUUL’fit
j tJ.‘   i   i^invt-i‘*s   Representative's   letter   0028/91   of   23*12.91   does   not   refuse   the
.    ...    Ln-idor    Llie    right.    to    start    work,    although    there    is    clear    dissatisfaction ullL     |.he    data    prr'.ei.tcdf    particularly    in    respect    of    failure    to    show    compliance ..   i   LJi   tkclhods   in   the   Specification.   However,   the   ER   does*   refuse   u.   sturt   vide li.» letter 0001/92 of 2aU January 1992, largely on the basis of the
( k    11  ciiiuiit  of  Clause  1.08  of  the  Specification.  Irrespective  □  [  this  it  iw
•  %
,.
i   I   .ir   that   the   CwHlrticlor   has   nut   submitted   adequate   details   of   the   initial
3   -il.'i     of   worl.,   in   particular   methods   of   work   on   site   clearance   and   deep   drain 
.-\:n.k4tiou.    Hu-    was    presented    Vide    the    Subcontractor's    letter    of    E    January 
I'-ML  wtih  a  rt  %pidise  from  the  EH  the  same  day.  The  Contractor  replied  on  10 
January,  Lui piii.uJ uul that further details were still outstanding,  The lL1-. .1  issal i:d‘.ur: i iuh with  the lack  of proposals far the initial activity  of ml. c.'llmiju.. - is still evident in  his communications ADP/Fax/057  and 
■r. PGG1/D5 of 1G aud JO January 1992.
•     i   uiiily   iiu   farina!   suspension   with   reference   to   Clause   10   has   Leun   made   by 
.h fii, nlLhuUjIk it is arguable that such reference is not necessary before
u,.s started. However, if the delay is deemed Lo be a suspension under
’J j ■■• 40 lL.jh the Lal low ing lias to be considered:
i’.  iLe suspension  a default of the Contractor under paragraph 1(b) through  failure to  supply  an  acceptable statement (iq which cas.- Hu Lost is allotted)?, and,
i.as    Like    Contractor    given    notice    that    he    intends    to    claim    within LH    g.lm.     uf    the    Engineer's    refusal    letter    in    accordance    with    the Iasi paragraph of Clause 40(1)?
•-■ i .peel of lIi.- l ist, the Contractor has not cited u reference, nor is one
• I t M ise r*v bih-ijL. Therefore th.-re is no entitlement to cast (see also Clause
' 
10 l:. n.ji clear whether any separate extension of time would be
h  able 1: noLice of a claim for post has not been  served.  (Only  the
•j.kHite not ice uf a claim for extra cost is mentioned  in  the first sentence;
sail IjulU cu:it Mid  extension  of time in  respect of "such  claim11 art mentioned hi the second).  It nay  be that this reflects the principle that additional la. i requites tin- keeping  of contemporary  records to  establish  quantum whereas vxLinslon  of time nonwilly  does not (compare Clause 52(A))*  The amount
Uii-cd    is    fivu    waeks.    It    is    not    reasonable    to    allow    an    extension    if    Clause *OtI)(h) (i.iJ, CuJkLractor's default) is deemed applicable.
j   uc   ih.   rmor-M   lla-   Sub-contractor’s   letter   WP46/78   dated   7   February   1992   copied Im I- Ek iihilc i uG>vi- of the Contractor's letter 92/009fi/Do of the suae dalethat lUv were other restrict ions between these parties concerning <.Lart, inter alia failure to agree u coup location  mobilize, and provide
advance puyaoiit following the correspond lug disburse ma nt of such by the
1...ployer*        Internal difficulties oii a performance bond Chat any affect the
S .1h nilLfhl-i<h performance are noted  in  the ER's letter of 3J*  February  1932-
f
j
H.i^yrrrwy uf u delay which is the fault of the Contractor occurs.
XX3 Conciusion
I he vlaiia fails dj U..th justifying additional costs and any extension of time. IL £K**> bm justified in respect oT the methods of initial work of situ 
.rance. Sii'ipLjision under Clause 10 is either inapplicable or, if
•m * 11 cable, justifies suspension by the Contractor's default. In addition the J L-y appears to be concurrent with the Contractor's internal arrangements
.* »lL l.is suhcoi.uua lor*
IJ CJnj* Vo t Lack of Possess ion of Site
1JJ fltfitTj
Th*- d  -Cai) u|  lliis c lai el relates to  the problems caused  by  the Afur tribesmen 
ii.   11..-   project   .dvu   rather   than   any   more   widespread   problems   which   any   have i.o-i. implied by the turnings issued as described in paragraph 6.1 of Appendix
i. (untrucior has detailed out the day® on which atcpp&gea took place
•..j ’Jut biiii tliu hunt's involved Tur aumtaury categories of work (surface Ji.iir.Sp huL^ u i.,ee vtc»)  and Lheft proceeds to develop costs in respect of
;k J nidation of siicuit’ic areas of work and an extension oT tine of IB weeks
.a-blv Lu =*u.'fiice drainage work and a critical delay of 7 weeks in respect ,/ uLsurfacc Uraiungt* work.
.7 - 1 .• 2 £7o,Miej< L
(
i *1 i m 4 |,i I ■-'
II. CuiitracLur appears to be approaching this on the preaiae oT not having 
! <•. h ^ranted pomscsSaOii of site under Clause 42. However the nature of the
r i J.I hl sceiis jure akin to hosLilitiesi cctaotion or disorder under Clause
ii:’ii:’r)i i.e. special risks. Under Clause 65(1) the Employer is required to 
iliJv.ui. i fy Lhf Contractor against all costs and expenses arising or in 
i-u.Um-.-.•uon uitli thvse risks. Therefore the Enginucr’s Representative’s letter
LiUi/0026/92 lULwd 19 May 1993 is incorrect in its assertion that these are
i k.-J..-. which huV..- to be bornu by the Contractor.
Il L..r.rc li. I be Intention by the Contractor to claim costs, then Clause 52(A)
i ipiirt-s lliul prior notice is given so that the proper records can be kept. 
■ I.l . procedure Las. bceu followed and Lhe Contractor appears to have kept these
• irds ns 4j-eed by Monthly Report No 6. The daily records of disruption 
lu-uilil be e.\uuiriv.’J Lu establish the extent and confirm that the Contractor's
uhLunlioub in the Claim Documentation are correct, in particular those Listed 
mi Lppi-udix 3 SeuLiuib 5.4. (There is some doubt as the applicability of the
.. l._,>d days of Jeluy from Muy 1994 onwards in respect of surface drain 
-r a Lion > 4n p.H i Lculur in respect of work on SD7}.
it quitt'  probable that the 28  day  limitation  of Clause 52(A) will have to b  i i^oroualj applied  to  events before the 6  Qctcbur 1992  i.t,  events 1  to  9 
h.    1   11   Lu   13   LuL   uLhk?rwlsv   the   daily   record   of   disruption   (subject   to   check) +? p’.u’i     tu     bi     sufficient     for     the     Engineer     to     give     reasonable     consideration aid.   .   Clause   i2   (   j     )   even   though   interim   claims   were   not   presented   at   prescribed i III • 4 V ills.
/•'{..n/ption and Ji-lay
A :a.uM4.Ary of disruption shows of a total of 306 days: 31 days on bush clearance
-           12*1 d.iys on surface drain work
5 days on structures
HA days on subsurface drains
28 Jays* in other respects.
3-6h»m regard  tv  the hubsurTnce drainage,  the Contractor is claiming  n  critical p j I.  uf 49  uays or s^ven  weeks.  This seems to  be a reasonable allowance given th.,  overall toLul.  The mam problem is establishing  the critical path  in t »  lulion  to  tin- much  larger incidence and  duration  of stoppages on  the surface
»h   .Lhs   and   the   correct   costs   incurred   bearing   in   mind   that   the   subcontractor slow in hurl, and behind programme, and much of liis plant was broken <wn.
k.th    regal'd    tv    the    stoppages    on    surCuce    drainage,    the    following    main    points hii- l he Cuh-»idu red!
rack  stoppage is an  incident relating  to  occupation  of the land; duration  of the work  and  the slowness of the Contractor would  not di’vrciiae the number of incidents)
intended  working) i.e adherence to  the tender or Clause 11 pragramues would  have resulted  in  concurrent activity  and therefore opened  up  more concurrent incidents of stoppage.  The Iunder programme shows Tertiary  and  Secondary  drains as cua>.<-cuLive activities within  each  area; Deep  Outfall Drains arc
concurrent     with     these     and     there     is     overlap     on     both id.il.u'y    Drains    and    Deep    Outfall    Drain    activities    between    the
ar^'art.     There     is     also     concurrency     of     specific     location     activity, Lui instance activity on Deep Drains SD3 and MD1 •
th.: (An  Jr.ictor has considered  simultaneous stoppages in  the two Jl’.I. r.’iit surface drain  activities,  Tertiary  and  other drains as prc‘.cntL.d  in  the Cluim»  os a single stoppage) i.e.  he has allowed Lu* concurrency of stoppage as they actually occurred,
the uiiir.  occurrences of stoppage are for January  1994  onwards on DDU and  Secondary  Drains; with  cons i durable concurrency  on IcrLiary Drains in February and March 1994.
*:.*  Clack  Lhei.-fure needs to  distinguish  between  Tertiary,  Secondary  and Jal full Drain  urLivity  in  addition  to  Tertiary  so  that a proper comparison  can 
I in.aic
11«« Cuii I rue Lur1 s original intentions and further potential
u M.-urreiiQ id’ .l.uppages.
1    A  ;*   regard   to   Lhe   v   Lulled   7   week   delay   on   subsurface   drainage,   the   Contrucl l aired Li..4 work in the Amibara Area did not proceed until the Mclka Sadi
. i.as cwkjdKiv so concurrency in that respect does not arise. Nolably the
...itr icloi . uu) 9 months for the Mclka Sadi Area (as shown in the tender
* ^r.iume) uhJ H.5 luuiiths for. the Aaibara Area (compared to 5 months shown m
t    tender). The additional 3.5 months for the latter area involves also
•b    -js    ui.Jer    Clam    No    7    (Flooding^    about    0.5    month)    and    Claim    8    (noL ui. !.Lifted).              Lutul overrun appears to covered by the alleged delays under
i . I hr*. !_■.
... .na/ /’/./U-y.ilivii Effects oh Plant Usage
II.. Luntrwiur Us clearly distinguished between plant usage on surface mid
■u.Unrrnce ,b-uK. work and has costed for tile different delays resulting u. L. . ^ tn.se tno activities accordingly in assessing costs. There is no
^.Unctwn withn. each of the Contractor1 s or Subcontractor’s activities i.e.
sit.- clearance plant have completed earlier than surface drum
3-7...... ation ,A..riU Plant used or structures Mill also Lu tied to any delay ;i. i tills .butr. ;Li cannot be independent. This aspect should be considered 
I.lJ ls unlikely Im permit much decrease in cost assessments.
I    id    die    subsurfuue    drainage    there    is    little    scope    for    distinction    as    one    of ih«-    Li»*nclii’fi    and    supporting    equipment    la    supplied    and    therefore    belongs    to 1 hr Ijiiplcyet* in any uuse»
j'Ll CuHti’bW i.ur lu.u not claimed for loss of efficiency on disruption. ,  of Ef/icjen. j
t
r
l ial. r Clause -14 the Engineer is required to consider natters that fairly 
. , i . . le the Contractor to an extension of time. Loss of efficiency on 
,.c i * ■. . lies uhicu are continually disrupted is widely accepted now, and 
.Ui.^ugL mA biii -ulLy addressed in thia CIalb, the Contractor Jiris submitted h i.his ret-prci m Claim (to C for disrupted supervision. This aspect is best
.ii ijvred disruption of the whole input (supervision) labour and plant)
.id- t In? activity rather than just supervision) in relation to the various
. ih nt sLopp-b^cs and delays given by the Contractor and quoted above. i.Li  . istica I ly  the number of days lost as claimed compared with the
., 4 pi , x lAnkLi- uVirrnll days of actual activity are:
Lush Clearance:                31 days lost out of             hq - ax
207 (124 plus G3) days lost out of 1200 - 21 X
SuhsLu.acti Lh\nii3:54 (17 plus 37) days lost out of 510 •* 10 X
Struct are-.:                       j days lust out of 2OC0 plus - less than 1 X
II. percentage f-guies are the ratio of days lost to days worked (period minus
L .ppa^pii) .
'Jiu’ ^ritlcui surface drains are quite clearly  the most disrupted  and  sole loss
•   i   •   Ificiun^y   shuuld   be   applied   to   working   time   of   say   10   percent   of   number1 l       f    .sidppn^ui    irrespective    d    their    individual    duration.    (Is    a    twu-day    stoppage -aj    luss    disruptive    than    a    ten*duy    stoppage?)*    Bush    clearance    and    subsurface
•a        -.ikigt     have     suffered     less     say     5X     but     these     oiay     not     be     critical     Cor
.saent.   T(i«'   si   ructures   activity   cun   hardly   be   considered   us   disrupted.   The 14 ct on morale is uj.quaiitifiable.
'i-j.- rjJJt.qjeu kit/ tlt/rer CJaiWJtf
IL     EunLructur     Lus     considered     concurrency     with     other     claims,     in     particular iL.se    nt    the    st    .a    t    of    the    wort,    for    bush    clearance    and    surface    drain'    £u 
r
(
v   - .rnrreaL   with   Claims
(
Nos   1   and   3   (between   December   1991   and   February   1992)
•.mi   lur   sulr.ui’fiM   e   drainage   with   Claim   2   (between   February   1992   and   September I'j'Ji).   If   CLuihs   Xcs   L   and   3   are   rejected,   and   the   delay   under   Claim   No"   3 
du   nd   afu-r   at^esskiCHt,   then   this   will   open   up   delays   under   Lhis   Claim   No I            Sect Lun 2.4).
•l Udi L a
Ui-il are exter.^ive claims for related costs under the heads discussed in i mu 2.2.J . -k ,7 COHCJ il*i 20H
;!iis Claim nj.prat^ to  be justified  in  principle under Clause 65*  The delays ui-iM uppi-ur Lu  Ll* of the correct order,  buL  subject to  analysis against the Cuiitr’ictor's intended  programme for possible concurrency.  Conversely  there uie Le additional delays for enforced  inefficient working  mid  otherwise i uia iiiTciil delays dh.iie valid  with  the rejection  of other claims.  The com* >J.+ iued  should  In- subject to  examination  of actuul costs of resourcesi but it i: iH-obablv that the total costs will be far different fro« those claimed.
3-9CJajj .Vo 5 AWuced Product/vjty of MorAforce
.7. 57 J Gc/dt.'j'uJ
rni *  tri aim is Linked  to  the general disruption  caused  by  the local Afar
Lril*eSLUL*ii
in     dealing 
(
and    is    concerned    with    the    effect    of    the    disruption    on    the    time    lost
with  thin  problem by  the Contractor’s senior expatriate stuff in 
1
1
respect     of     stjperv     iHiciib,     and     the     decrease     in     productivity     due     to     loss     of
.Jip^rv iSur> ell iclency.
'llh-re arc I'uur -ain causative heads for time lost:
negotiations with Afar elders
iitleliding Afar courts
iniprisijii8«!i]t of Foreman for 0.5 day
rjonf Lhr-went for safety to the Contractor’s compound.
the     CuntruLLor     pleads     that     the     disruption     is     a     special     risk     under     Clause     G5 
„hiL   that   lie   has   ,-nt   i   tleiient   to   increased   costs   ns   incidental   to   the   work   under CkuiriU G5(4)-
.\u r\tens Lun of time has been requested.
CosLk are claimed in respect:                                                                                                                    •7.
Lost Si!-  Agent’s time, 50X over 15 months between April 1992 to the
prt ml.
Lu-.. Fuis^ii.d. ^ time, 1-1.5 days due to confinement in compound etc.
Hardship allowances to seven senior stuff.
injured productivity equivalent to 5X of the value of the Works*
.7-5,2 Ccijiwcnl
z.-jhu       ul'    Lhu    procedures    of    Clause    53A    uppe&r    to    have    been    followed    in    respect as’     this     clui.u-     Ihv     Contractor     has     not     cited     any     references     to     notices     or juLi-i mi accounts in accordance with this cl-iim. This does not necessarily
i . lode htiy pay «iient ■ but this is left to the Engineer’s discretion in i. *. -wiiL£ .nch ii.Tiurds that can be provided and substantiated.
II. Contr.ujtijL  s case would have been better sup|*orted If he had produced 
ivuf.nh; i< is tvwiiibcuplace for senior personnel to keep personal daily diarict
wbaL L Liui; was spent oh what activity. Irrespective of this, there taust
be ckubt an lu bwlo-it additional cost Ijt actually suffered, as the time is spent
■i. the project anyway and is also concurrent with the delays and disruption 
• H Claim        I. Imprisonment cannot be accepted as grounds for reclaiming costs
at;     it     results     fruw     some     action     which     is     construed     as     illegal,     and     therefore
bL>md     the     framework     of     contractual     liabilities     as     fur     as     the     Employer     11 
udjcernetL
Math regard tw the direct incidental costs  hardship payments to" the-
1
CgjlI racLor* s schlur personnel should not be reinibursc-d under the Contract;
■iuLie discumfurt to normal life is expected and the rewards lor those who ‘■^htinut- Lu perform well under such circumstances norually coae in lute]-
3-10
ti ■--.pMusibi 1 it ics and  promotions mid  fro»  bonuses resulting  from overalL m^.-rcitd  pci UH-hUUice of the Company  or general profitability  of the 1'i.uhdcL Then- is no  control by  the Employer hl determining  what should  be paid- it is also  nul clear that all the stuff named  suffered  simiLur hardship, p.o l ttfulUr!.  thu±>e who  function  was largely  in  Addis Ababa rather than  on -.4 l'1 *
ILp.c is iivraily  support for the costs of reduced  productivity  resulting fpt.ui delay  mid  disrupt ion  which  costa are the responsibility  of the £upLayer (-it. In  this case under Clause C5('l)).  The extent will depend  on  the nature of lI. i.ork  in  hand*  In  this case,  the delays occurred  mostly  to  the surface
!.    .in-bge    nud    subsurface    drainage.   The   delay   and   disruption   in   this   Claim   is luL^d     Lu    th*-     inefficiency     resulting     from     the     disrupted     activities     of    the
\^eiit    iathi-j    lli.m    the    disruption    of    activity    cu    the    s*te    through    slopping The Contractor hua related a notional percentage (5) to the
I-• I ^iIji- of Llic whole of the Contract. (Although he has put this figure
-it d.irr 30 uilHjchi presumedly representing the value of work turucinpli shed to 
uh. lue of < L—n). It is not reasonable to include any value concerned with 
i-L. pipe ikaehliivry installation, and pipe production which were under the
i.p.-rvlhiciii uf mLIi.t specialists and did not suffer disruption* (As a point
■ j! pA’hicipl*•, If mucIi of Lhe Contract was affected in this manner then 
uil'gnliun uf cusL would have been better achieved by bringing another
.7.1,1 ial- 1                 Lu site and seeking to recover cost us a direct cost). The
I*.  !■■._-■ -ntuyt*- -^dju  d  jmi'IiL, and  Lhe value of the work  involved,  should  relate to u.|  ’.urfrick: -arthwurks,  subsurface drainage etc and  the degree t-u  which  each “ I hi-se m-iv diirupLed.  The outcome should  be directly  related  to  the details
•-i.i-i-■»   CLtiu   Im   I   r*d.lnrr   limn   Lv   put   under   a   separate   head   here   and   this   is
di USsivJ LU SccLiuii 3.4.
j'.i. J Cone Jua cun
Lh.- cl.iijhi fail*,  in  respect of additional costs for non-producl ive costs of
• L.-i I              h.it dihj p bonuses. i
i    L.    i    laifij   fails   .vis.j      in   principle   In   respect   of   additional   costs   duo   to   lost ui’l.      leucy      for      di      nipttd     supervision     of     the     Site     Agent,     Lui     aspects;        of >bi-     upLion     .ire     Ltjiiidurril     under    Section    3.4    in    relation    to    whole    activity    on Inc <uLual hi.u 1. di-ii uptud as detailed in Claim No 4./ui ; CJajbj a.j 6' Care uf the Wurka (Flooding)
-
'iuJ (jeiiL-ra 1
claiw arises from the inundation of the proji?ct urcn by flood waters from lL Awash Uivi. i which overtopped and breached tile protection bund. The depth ,.j rtuudkih peaked  |, about 1.5 metre*, with a flood duration from the end of
utgbsl to thv end of September 1993* In addition to restricting access to I lie
lLl* of perManvj.t works and the processing of further filter maLerial dm;* ng 
U.xs period, there was extensive damage to surface drain work, and silt
in inai.j surface and subsurface drains, all of which hml to be
r     -vuti vu! / repai red or removed subseciutnl I y« The Contractor also suffered
lJu- ruiMuvnl ui four items of earthmoving plant in assisting the local
a U.ori t.iu:. in i ffectiug repair work to the protection bund.
('untrac     r.ur     cLuma     that     such     flooding     is     an     excepted     risk     Under     Clause till'd)    as    ati    vperatitJh    of    the    forces    of    nature    which    he    could    not    reasonably i.      .      r,%:r      or      realy      make      provision      for      and      therefore      outside      of      his m«jI lotions Lu can- Tur the Works at hits own expense under Clause 20(1).
In Lk^itraului has eiaxned a total of 9.5 weeks extension of time and costs;
. '/ LAI BO ODD  »ad Hi rr G20 000*
u
k
.V.dul’ COAbHC/jt
•i I r./ugh a 1 luud i vent from the adjacent River Awush might be deemed us
i«. •—dduble h> the Contractor, such flooding is clearly an extreme event, and 
,n ai.y cw.l there is little that could be done by him to sake provision 
... ..msL the cont.^^uences thereof. The outstanding point us far as Clause 2Q(2)
j :       u hue rued is whether the Contractor hud effected insurance to cover such
thusfhy excluding this event as an excepted risk or is able to recover i..- . iUBiu utker ru) . If so then this becomes an insurance Matter as far as
iu.-J - arc concerned and that has been raised in Site Meeting *ia 12 Section 
■,*U'l when . L is nuted that a lass adjuster is visiting the site. There is — a disci’*'p.iibL > in the Contractor s Summary of costs; it appears that he
u
1
J... uuiittrd Lu .-.how the remedial works to surface and subsurface' drainage in 
aiLucat.uiii u-l' costs to insurance.
its- Justs uL&uci-xtcd  with  the use of plant for flood  bund  repair Day  be r.  v  •■..  ruble frcui.  l'iuiud  funds otherwise available and  the Contractor has been 
...s j-n. d uitcurd i u   1 y vide the CIV s letter J V/434/94 of fi June 1994 and also the
■           V- Lfc--Lter LA/U I'J/ADP 94 of 13 October 1994 to the Employer
ii.u    i.    is    no    diix.    t    reference-under    Clause    20    to    extensions    oT    time,    but    under i. Hies.- 14, tlje delay wiy Le considered due to exceptional clioutic conditions
■                 UllI l l.c flouJing duration of approx i aapely 16 days claimed would be allowable.
irbt-L delio  aiLtacLs no  costs.  There way  be additional time due to  extra qi-
.►udl     t     juiuil     iiitk     in     repair     etc.     resulting     from     the     flooding     but     this     will
-    ;    nd    on    tin-    uulcinuu-    wf    the    insurance    claim!    i.e.    if    the    cost    of    repair    work *   - ..ured by insurance this should include the cost of additional resources
Lu t x-.ary to k.’L [i the contract to time.
I    Ll-     l-;      Lupp-i.-    s    described    in    Suction    7,4.1    and    the    subseuuunt    repair    and    silt
i 1* ai’ancewoik w i.ll have to be checked against the site diaries and the record
L -Liiitii.-s Ln.-ing investigated in respect of Claim hu B. However, the detail ,a*u. *.k*d in the claim appears to be reasonable and no substantial change would
nL* v.pvcLud to the duration of tli« events described.
.7.0.5“ lbyj c 1 tin r uh
lb*’ ijraiiLih^ of jui extension of tine for the period of inundation, (ic d^y, & ueh pcriuLl 1= CMibfiraed by site records) is proposed for the --
.♦Cluj mid.i Clause 44 as a result of exceptional weather,
itt A*-h. !b. _  ’
r    ■juntiii-j   of   any   further   extension   of   tine   for   repairs   and   dcuilr* 
U.   *‘u*4h 
-----  -  ■
1 tLrrvuf   de1 pend   upon 
 ■
-Li-rh the UnLr.-LTLur has tender.
......  the i----ins ---ur ---a-nc---e- pr ----ovi ---s--ions  ‘   or recovery
L
■■j.  7 Clui* 7 Unforeseen Conditions at HD1 mid SD3
.7, 7. J Gi'iteriiJ
■|Lw Contractor has claimed that the excess irrigation flows in these two 
iJi'uins weic Lu iu excess of that which he could have expected tu foresee and J.al he wad CLuiiu-d hardship in dealing with these flows and that the work 
i.t'Jcru-d urot-iuJi dujunge. He contends that bucaune of a late start through rulivs* justifiable delays he activity period moved into the irrigation season 
4 ^ui.d Apr il
lie is therefore claiming costs and extension of time under
i i,*u<lj 12           7 -»tek±i and Birr 1.04 million respectively.
L7J Cojn-i-ot
specification  Clause 1.17  requires that the Contractor provides diversion  for
Li iidiole
in drainage channels and canals. No details of the flows were
-.t .jvidcd  nt Lh-.- Lender stage although  he should  have examined  the site {Clause
H) uL  IL.  liav  <jf tender to  ascertain  the possible flows.  There Ls no 
..uJiculioii in  Lhe claim ns to  the Contractor's tender assumptions or how he
,J lowed for
in pumping capacity provided.
.. number of at In r points have been raised by the ER  and are resunariaed in 
h.^ letter ui JV/C12/94 of 11th November 1994, and are awaiting response* 
r L data bi t -l lu be examined and established in accordance wiLh Sect ion 2.2 
.7.7.2 Coneiusj^n
1*J.-s claiij i:-- unlikely to be sustained to any great degree*
(
3-14ZLH CJaia £> Lute
.7. ?>. 1 General
in the Design of the JtorJfU
1'hy    CuLlLiulcIol        contends    that    lie    was    delayed    by    late    inforantion    concerning s-ithig onL 4i«d levels in respect of:
-           •». I Ling, out the Main Drain
dCuv^Lion of MDl and SD3 including uligna&nt changes,
aiticr surface and subsurface drams and structures.
1   .<i   .■   chusi     lI    h.u*   lg     change   sequence   of   construction   and   delays   through   lute u.d.-riiig ui run luLxteriul for pipe and pipe fittings.
1L-; total delcy  claimed  is 23.5  weeks in  respect of the subsurface drainage
.□id 12 w.-irks in respect of the surface druinugu* 1 , twh H.uiMeJ ure DM 877 220 and Birr 3 757 7G8. J.K.2 Cu  enl
M
fir*  Conlr.x  lui refers to  Clauses G (Notice of drawings required  to  avoid  delay Li.  Lhu  pru.iA.  .b  uf tho  Works) and  7  {Issuance of Drawings and  Instructions by i_.x- Eiigir.e. rl . the Conditions of Contract. He also refers to Clouse 3.02 of
1..            -   Spcui   f   j   Lb.inaj   in   respect   of   the   survey   uf   ground   surface   levels   us i •. ■ 11 G*i s:
"7h  •  funfr.icror brJieve.7  this (surveyJ wus intended  for the purpose of sui- n! ueobLireft^ent.  However,  the Engineer used  this information  for fntdi- ,tic-h wf hit> permanent designs.”
I Cunt;
* s liuplicatlciU is that the design should have been resolved
..u-Liu-r Ui.J t.Lal lucre was an LnordinaLe aaount of tiae between survey and 
.1 ij^i. pr-uJuci-L^h. TLl- secund paragraph of Clause 3.Q2 requires that the lAiuCto. . Lu □ubait plans unci sections from the survey so that the
. ..Jiieu-r hclj mukws final determination of the di&eusiuns and levels of the
.            i.c LL- J-ila is needed for design purposes also in particular drain I. -.via. Plans aj-L  to be "submitted at least seven days in advance of the
1
luU .u:Lih 'intended, prugrauiat for construction of any part of the Works.”
11.. drawings of the drains were already available: the only data which the
..nirav liu n.-vileii in confiruuiLion was that of id igniArni and level. The initial
jiijplkdiiLi cuucernud Field brains.
* 1
.   i   diaj   discusbiuhs   held,   with   the   Project   Earthworks   Engineer,   and   to   some   extent MMF’  Fug  incurs  involved  with  Lhe  work,  it  appears  that  the  Con  true  lor  was
pi-rsistenLiy    puLiTying    delays    when    in    fact    he    was    still    proceeding    with    work und   was   nut   in   u   position   to   coanence   work   at   a   new   locution.   The
Contractor is jepurted  never to  have stopped  working,  i.e.  he never suffered ..  delay  tXCtpL  possibly  fur about two  weeks m February  199-1  for the ASP iducks 1  and  2  whilst the delayed  return  of the MMP Inspector wus awaited,  (It is repurLed  that the Subcontractor did  not often  appear to  know where his i.'ams were working; field  inspectors often  had  to  search  in  the field.  Thl* 
uijgests that the Subcontractor was not held up with data). Staff had in fact 3-15r L*<-i‘' pas -rig data to him at uh early stage because the datu became mislaid.
i, Mfdu-r to cany oul a detailed consideration tlw site staff shall carry out
Himlysis uf data’s of drain work for the following:
isblit icatioji of survey,
**          imp Leueututiun of survey,
-               suLuission    of    survey    plan    to    ER    in    accordance    with    Clause    3.02    of the Specification,
truce all the requests for data by the Contractor,
-
requests    for    approval    of,    and    agreement    to    the    proposed    method    of R-url.irjij     in     cropped     areas     (banana     and     cotton}     in     accordance     with Clause 6. OS where appropriate,
prepare       a       complete       programme       of       actual       activity       from       site ruturds,
-              compare   the   time   of   data   requests   with   the   time   when   the   work   was uctuully undertaken *
?Vr structlires, limings of:
supjily of Information to the Contractor.
receipt     of     working     drawings     of     structure     from     the     Contractor     in jccurduiicr with Clause l.DG of the Specification,
-                   uuiir-.Lruct ion ■
3.     3 Ctmc-J uj*j un
XlLJkough  this CLaiju  will be investigated  as described,  it is doubtful that the j1  aimed  analysis of actual activities and  events will reveal substance in  any 
•-1 the in^taiLCes alleged.
3-16;/.y. / Cehfr.ii
CjiiL mid th I ay:
a  laeal court judgement that some SO local labourers hL re
.
eu titled to the s^e hardship allowances of 4 OX Wftgea
lubourers Trom Addis Ababa; the judgement was upheld by nw
Appellate High CoLrt following an appeal which in turn stood when 
I In- Court of Cassation in Addis Ababa declined to give u rulii,gi
LULd i
a   local   court   ruling   that   much   increased   royalties   hud   to   be   Vakil for winning filter material from a local quarry.
A> ciisl ihCrear.L-i result fret local copoon  luh  development and  as such  the C.^.Lractur contends that these are changes in  cost legislation  under Clause 7(1  U J even  though  ilia changes appeared  to  be contrary  to  any  statute.  The uirurt cost uf the increases is not included,  but as u  result of the Local u-wirrt buukliig  to  implement iLs judgement,  vehicles were seized,  and  in  the L  ise of Lhe filter Material,  the Contractor had  to  alter his area of working i ij order Lo  safeguard  supplies.  The Contractor suffered  indirect costs 4lUj m. .  jy  us a ivsulc and  it is these indirect consequences which  arc the subject m! this dais..
Jn<    Cjiilrud.Lir    has    received    legal    opinion    that    u    dscarriiige    of    Justice    has *Jl . Ul l\ d r
J . J. - COiilUtVlt I
Un- CutiLr.ticLu.il Principle
blrjdly,  this is a legal natter which  only  those qualified  in  Ethiopian  law sf.aid  caiiaidci.  The Employer Las sought legal opinion  for his own  buiiefiti
>h.i Ims mkUeJ the Ell vide his letter PAS/i/213 of 25 October 1594 that:
wAi Liw; court has ruled that the payment of hardship allowance^
k.k   i.'   dm:   in   any   case   from   the   start   of   the   Contract   no   mcrensj ia   cg±.l*     under   Clause   "Q   is   due   to   the   Contractor,   mid   therefore iu«    uLlu-r    matter    in    consequence    thereof    is    recoverable    under   tl^ Cuntracl*
Royalties   are   the   responsibility   of   the   Contractor   under   Clause
'/ J ub^7Aa'J ^ic‘rc
no,new proclamation about increases then
70 does not apply; i.e. rmviHLTiL rnmalhM Hip Contractor *
3-17in  \ iew ol ■ h<*  l -.-iL  advice given  io  the Employer and  the Enployer'^s rejection oi the claijk  Liused  on  the legal advice received,  the natter will need  to  Lc j-.  a/lved  by  tin  application  of Clause G7  of the .Conditions of Contract, ArbitrutLoai il d.c Contractor intends to contest the natter further*7. JO CJaiu Ko IU                         ni Order Trains t Move wen t of Con tractor1 fl IfeJUcJus
't. !fl. /               Ccneral
i   liua   braining   Order   was   issued   by   the   local   governBient   mini   iristration   on   9 I    Jin-    1991    a^ainai    ibc    removal    of    any    oT    the    Contractor1      s    Plant    from    the project     area.     The     Contractor     relates     this     action     to     the     dispute     over     payment j* ruyallium on the Diuile Hill borrow pit.
C .l^-latiun of dcluj or quantum of costs ore pending.
7. }U» 2            CuatLfn J.
-1-    luison    f.u    l       he    Restraining    Order    must    be    determined    by    the    Contractor. I *uLjuL this reason any eontriLCtuul entitlements cannot be established.
Li lLl UesLr-ining Order relates to the payment of increased royalties on the biuih* Hill burrow piL as alleged by the Contractor, then the same principle
qiplirs as Lg Claim Xa 9.
7. 10. .1            Cuoc I u±; i t j/j
Ik. i.,bLure nj.d Validity of this Claim are still to be established*
3-19i.         Pre! i* iittiry Conclusions *nd Actions Required
/. / pML'h CliiiiW
I he prel i m i miry Conclusions oh all Claims are described in the respective
■ r.cludiijz paru^raphs of each section of Chapter 3* Letters have been sent or
■                 lj drafted for sending to LLe Contractor as described.
Ju-sponses t*j these letters are Awaited,  or are to  be awaited,  and  following these,  fuithui analysis of these claims can  be developed,  including  the
.<|ib.    I    leal    Lou    uiT    general    cost    principles    and    procedures,    and    tine    aspect ,.i i hl iple-i as discussed in Section 2-
BuL|i Claims Nos -I and H will require extensive detailed examination by the
i <J f of lIh* Engineer's Representative as described and this is being put in 
. ii.d before further analysis is possible,
Freiituinury Summary
ike summary of this preliminary analysis is given in the Table 4.1. It is
Uiuught tJ.ut approximately UM 700 000 and Birr 6 si Ilion should be allowed in a. y.pect of costs aint 35 weeks in respect of extension of time should be
ul Lowed for the Claims presented.
T<. date a total of Birr 2.5 million have been certified as an interim measure, 
• ikL ikti c:Ji.-in.ian al‘ time of 3& weeks granted in respect of these Claims, /. ,7 OlJjer Jfat£era~
Lhi- Contractor lias entitlement (within the constraints of Clause 52A} to raise j. iiy other clam for review until the time of his Final Account under Clause ikJ(C] Im particalnr paragraph (b). This will not be due until 1996 at Llie
> ..rJiesL, ..nd uLth the present rtiLe of progress on the surface drainage mid Aruetunjs, this timing way be much later.
b
ii is fair!) essential that us much  as possible of the Final Account is agreed 
ai aii early  sl.i^e.  best around  the time of issue of Completion  Certificates. 
.  p.’ Contractor should  be requested  to  give an  undertaking  thut all claims Ln 
r.  .peel of im.-uh  up  to  that time are notified  arid  proper final statements
Hade except or. any un-going event.
B
Claims    can    arist-    in    the    Maintenuce    Period    and    will    have    to    be    dealt    with accordingly .■
•-1
Z~t
♦
into j CUP 1
smiTiuojild! jsj *s(p &x cin-cj ,
i
jetnjlwj Iq jwcin c;ti inij X^<fin$ajd bvujtwv9 pivit|1riM f|« pwi
<■
w
E
anis ,* 
mtjnni ^jeistjyjD? q         (
' • 111 L
i*
*
t
r
Si
in
III pud
It'
hif»d
v
to*
r               jt           EC
c               r                   DI'
ip
II'
»
z*
1!’ li
11'
5'tl I
!'»
in              11 ill
F’?7*#
ri”i
Japjl hppJl^i'3i 15# ■=,
*V1 •:
-
C«‘l
tr
II’
IP               1!’ u        5't
sv
- H'T IV
II K'l h*
111              IP                   1!'               5             3D’
•
(I              Cl
E'O
tu             Hl             JV
IP
l«
IX ni|              11
lUUiiHfT
imitrpjj
n»                H            «'
I
■W              Jill RPI3 *1
ir
VS 1 SIH 1’ "”llir^? •;
i
IlTBIDf-’ ‘1 hupz-^m W" “
531s p iclnnv.; ■]
FVP ]- nn’3»ir-? ,r vrrr>]3 n*ir-
;i?mn a?] *1
i
n
M|pU?«a|/r»| iirp
i
jnurwfj jo X-jprrrrs
r>

< <

Summery

Amibara Drainage Project Claims Summary

Amibara Drainage Project - Contractor's Claims Preliminary Report

Project Overview

Contract: ADP/T/01/90 - Drainage Works

Contractor: Joint Venture JR-Dynidag

Original Completion Date: 14 April 1994 (30 months from October 1991)

Status as of November 1994: Works ongoing with interim extension to 31 January 1995

Total Claims Value: ~49% of original contract price (DM 2.49M + Birr 14.31M)

Claims Summary

Claim No	Description	Claimed Costs	Claimed EOT	Preliminary Assessment
1	Late Mobilisation Advance	DM 170,764 + Birr 393,444	11 weeks	Likely rejected (no contractual basis)
2	Late Customs Clearance	DM 960,708 + Birr 2,907,938	23.3 weeks	Partial acceptance (7-10 weeks, reduced costs)
3	Withholding Permission to Commence	Birr 59,598	5 weeks	Likely rejected (Contractor's default)
4	Lack of Possession of Site (Afar disruption)	DM 265,130 + Birr 3,981,779	18 weeks	Likely accepted under Clause 65 (special risks)
5	Reduced Productivity of Workforce	DM 190,143 + Birr 1,501,474	nil	Likely rejected (no proper records)
6	Care of the Works (Flooding)	DM 79,404 + Birr 619,551	9.5 weeks	Partial acceptance (time but likely no costs)
7	Unforeseen Conditions at MD1 and SD3	Birr 1,040,124	7 weeks	Likely rejected (Contractor's responsibility)
8	Late Changes in Design	DM 877,221 + Birr 3,757,768	22.5 weeks	Under investigation (likely minimal acceptance)
9	Changes in Cost Legislation	DM -28,902 + Birr 51,309	0.5 weeks	Rejected per Employer's legal advice
10	Restraining Order on Vehicles	Pending	Pending	Pending clarification

Key Findings

Most substantial claims relate to site access issues (Claim 4) and customs delays (Claim 2)
Engineer questions many claims due to lack of proper notification under Clause 52A procedures
Significant concurrency issues exist between different delay events
Contractor's cost calculations require verification (e.g., expatriate rates, office costs)

Preliminary Conclusions

The Engineer's preliminary assessment suggests:

Likely acceptable costs: ~DM 700,000 + Birr 6 million (significantly less than claimed)
Likely acceptable extension of time: ~35 weeks (vs 75 weeks claimed)
Major valid claims relate to special risks (Clause 65) for Afar disruptions and some customs delays
Many claims fail due to procedural issues (lack of proper notices) or being Contractor's risk

Further detailed analysis required for Claims 4 and 8 before final determinations can be made.

Contractual Principles Applied

The assessment applies key FIDIC 3 (with World Bank modifications) principles:

Clause 52A: Strict notice requirements for claims (28-day rule)
Clause 65: Special risks provisions for Afar disruptions
Clause 20: Exceptional risks for flooding event
Clause 44: Extension of time considerations
Concurrency: Overlapping delay events properly considered