TRIBHUV

TRIBHUVAN
AN UNIVERSITY
INSTITUTE OF ENGINEERING
CENTRAL CAMPUS
Pulchowk , Lalitpur

Assignment II
On
Claim Document

Submitted On: 15 July,, 2018

SUBMITTED BY: SUBMITTED TO:

Group 1 Prof. Khem Nath Dallakoti
Dibyaswor Lamichhane (073/MSCM/301) Faculty of Construction Management
Kalpana Devkota (073/MSCM/302)
Kiran Basukala (073/MSCM/303)
Kripa Devkota (073/MSCM/304)
Lavalesh Karna (073/MSCM/305)
Laxman Lamsal (073/MSGT/819)
 Road Network Development Project
Hile-Basantapur Road Project

Contract Number: - RNDP/LCB/HB-1

Statement of Claim
for

Reimbursement of loss arising from Possession of Site

which was not free from Encumbrance

Submitted by:
Lama Construction Company (Pvt.) Ltd.
05 September, 2008

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 Table of Contents
1. Claim Title ............................................................................................................................................ 4
2. Brief Description of the Project ............................................................................................................ 4
3. Summary of Claim ................................................................................................................................ 5
4. Facts Related to Claim .......................................................................................................................... 5
5. Entitlement Analysis ............................................................................................................................. 5
6. Quantum Calculation Analysis ............................................................................................................. 7
7. Factual Support for the Claim ............................................................................................................... 8
8. Attachments .......................................................................................................................................... 8
Annex 1

Annex 2

Annex 3

Annex 4

Annex 5

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1. Claim Title
Claim No. 1: Claim and Reimbursement of loss arising from Possession of Site which
was not free from Encumbrance.

Claim No. 2: Claim of Interest incur due to delayed payment on Claim No. 1

Contracting Parties

Contractor’s Details Employer’s Details

Government of Nepal, Ministry of Physical Planning

M/S Lama Construction Company (Pvt.) Ltd.,
and Works, Department of Roads, Project
Maharajgunj, Kathmandu
Directorate (ADB)
Authorized Person: - Mr. Raman Lama
Bishalnagar, Kathmandu
Phone Fax : 0142xxxxx
Contact Person:- Dinker Sharma
Phone Fax : 0142xxxxx

2. Brief Description of the Project:

Road Network Development Project, Hile-Basantapur Road Project

The scope of work awarded to the contractor under the contract mainly consists of General,
Earthwork, Structure, pavement work, Day work, Provisional Sum, Miscellaneous

Contract Number: - RNDP/LCB/HB-1

Notice of Tender: - 30 November 2004

Last date of submission of Bid: - 30 Dec 2004

Date of acceptance of Bid: - 15 March 2005

Contract Amount: - NRs. 25,46,33,000.00

Date of Contract: - 24 March 2005

Contract Completion date: 24 March 2008

Sectional completion / Milestones: - N/A

Price Adjustment Clause: - As per SCC

Type of Contract: - Unit Rate Contract

Site Possession/handover date: - 01 April 2005

Notice to Commence / Start Date: - 01 April 2005

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3. Summary of Claim
This statement of claim (hereinafter, “SoC”) has been prepared by Lama Construction
Company (Pvt.) Ltd., (herein after, “the Contractor”) for the purpose of requesting
compensation due to incurred due to the unavailability of unrestricted movement for transport
of manpower, materials and equipments required to the site for the execution of the work, in
accordance with sub-clause 20.1 of Conditions of Contract (CoC). Though, the Possession of
Site was given on 01 April 2005; due to curfew imposed from 6:00 pm to 6:00 am, the
maneuver was limited and the equipments and manpower had to stay idle in that duration of
the day. Pursuant to sub clause 20.1 of CoC, the Contractor shall be given possession of all
parts of site and if not so, this shall be a compensation event.

The event was unexpected and beyond the control of the contractor, therefore, represents
“Employer’s Risk Event” under sub-clause 11.1 (b) of CoC.

The contractor could not reasonably foresee, avoid or overcome the situation of curfew.
Further, the contractor’s activities remained stopped in this period resulting in disruption of
the work due to standby of manpower and equipment. This referred as “Employer’s Risk
Event” led contractor to sustain additional cost which any experienced contractor would not
have foreseen of budget for at the time of tender. The detail of the claim, the chronology of
the events giving rise to entitlement and the calculations are presented forward.

The contractor’s claim is that all the events mentioned above qualify as Employer’s Risk
Event resulting to compensation event under CoC Clause 42.1 (a), (h), 41.2.

Relief Requested:

The Contractor incurred NPR 1,559,180.00 additional cost due to unexpectedly imposed
curfew plus the interest for the period of delay of payment of compensation, NPR 182,424.06.

Thus, this claim relates to payment of total amount of 1,741,604.06

4. Facts Related to Claim

The curfew was imposed by the security agencies, chiefly the armed police force from 6:00
pm to 6:00 am to the site from chainage 0+790. This restricted severely the movement of
manpower and equipments including Contractor’s inspection and transportation vehicles.
Contractor had informed this situation as compensation event (as per Sub-Clause 20.1 and
42.1 of CoC) through the letter No. 06/33 dated 24 January 2006.

5. Entitlement Analysis
On this event during 2006, the Contractor’s activity (transport of materials and manpower)
were disrupted which led manpower and equipments to stay idle. This strike was initiated by
the Armed Police Force. (Please refer Annex 2). Therefore, it is Employer’s Risk event under
Clause 11.1.

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Applicable Contract Clauses

Sub clause 11.1 of CoC- Employer’s Risk

Sub clause 20.1 of CoC- Possession of the Site

Sub clause 41.2 of CoC- Payments

Sub-clause 42.1(a), (h), (j) of CoC- Compensation Events

Sub-clause 11.1 of GCC states:

“From the Start Date until the Defects Liability Certificate has been issued, the following are
Employer’s risks:

(a) The risk of personal injury, death, or loss of or damage to property (excluding the
Works, Plant, Materials, and Equipment), which are due to

(i) use or occupation of the Site by the Works or for the purpose of the Works,
which is the unavoidable result of the Works or

(ii) negligence, breach of statutory duty, or interference with any legal right by
the Employer or by any person employed by or contracted to him except the
Contractor.

(b) The risk of damage to the Works, Plant, Materials, and Equipment to the extent
that it is due to a fault of the Employer or in the Employer’s design, or due to war
or radioactive contamination directly affecting the country where the Works are to
be executed.”

Sub-clause 20.1 of GCC states:

“The Employer shall give possession of all parts of the Site to the Contractor. If possession
of a part is not given by the date stated in the SCC, the Employer shall be deemed to have
delayed the start of the relevant activities, and this shall be a Compensation Event.”

Sub-clause 42.1 of GCC states:

“The following shall be Compensation Events:

(a) The Employer does not give access to a part of the Site by the Site Possession Date
pursuant to GCC 20.1.

(h) Other contractors, public authorities, utilities, or the Employer does not work within
the dates and other constraints stated in the Contract, and they cause delay or
extra cost to the Contractor.

(j) The effects on the Contractor of any of the Employer’s Risks.”

Sub-clause 41.2 of GCC states:

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“If an amount certified is increased in a later certificate or as a result of an award by the
Adjudicator or an Arbitrator, the Contractor shall be paid interest upon the delayed payment
as set out in this clause. Interest shall be calculated from the date upon which the increased
amount would have been certified in the absence of dispute.”

6. Quantum Calculation Analysis

The curfew obstructed the movement of vehicles delivering construction materials to
construction site that incur additional expenses keeping the vehicles and labor inoperative for
curfew period. Thus, the claim amount for vehicles and manpower which are necessary for
the transportation of construction materials is calculated as follows:

Cost Analysis of Claim:-1

Idle Hour
S.N Type of per day Rate per Amount(NRs.
Nos. Idle days
. vehicle (6:00 pm to hour (NRs.) )
9:30 pm)

1 Tripper 8 74 3.5 500 1,036,000.00

2 Truck 2 74 3.5 500 259,000.00

Skilled Labour
3 (1 for each 10 74 3.5 38 98,420.00
vehicle)

Unskilled
4 Labour (4 for 40 74 3.5 16 165,760.00
each vehicle)

Total 1,559, 180.00

Hence, the Contractor’s total claim amount for idle vehicle and labor is NPR 1,559,180.00.

Interest on Delay Payment

The above amount of claim of NPR 1,559,180.00 was due on 01 July, 2007. Interest on the above
amount upto August 31, 2008 works out NPR 182,424.06 @10% per annum as stated in Sub - clause
42.1 of SCC. It is requested that NPR 182,424.06 be awarded as interest upto August 31, 2008.
Interest beyond August 31, 20018 will be payable extra.

Compensation Requested date: 1 June, 2007

Last day for bill (compensation) certification by Engineer (30 days) after: 01 July 2007

Interest period from 1 July to 31 August 2008 is: 14 months = 1.17 years

Interest Rate = 10% p.a.

Interest Amount, I = PTR/100 = (1559180*1.17*10)/100 = NPR 182,424.06

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Thus, we hereby request the Project Manager for the immediate certification and release of
Compensation amount along with the calculated interest amounting to NPR 1,741,604.06

7. Factual Support for the Claim

a. Contract provisions:

Sub clause 11.1 of CoC- Employer’s Risk

Sub clause 20.1 of CoC- Possession of the Site

Sub clause 41.2 of CoC- Payments

Sub-clause 42.1(a), (h), (j) of CoC- Compensation Events

8. Attachments

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ANNEX 1
 LAMA CONSTRUCTION COMPANY (PVT.) LTD.

Ref. No:
Date

To
The Project Directorate
Department of Roads,
Bishalnagar, Kathmandu

Subject: - Disturbance to Work due to Curfew

Dear Sir,

For your kind information, we are on the stage of clearing site and dumping of construction
materials as according to the approved Work Schedule.

In this process, suddenly curfew has been imposed by Armed Police Force for the time of
6:00 pm to 6:00 am everyday from chainage 0+790 since last two (2) weeks. This has
obstructed the movement of vehicles delivering construction materials to construction site
and we are forced to keep our keep our manpower and equipments idle during the restricted
time. We would like to inform you that this event might result in time overrun and cost
overrun as well if the situation remains same for long.

A copy of the Kantipur Daily that illustrates curfew event has been attached herewith for
your reference.

With sincere regards,

For & on behalf of Lama Construction (Pvt.) Ltd.

Project Manager
ANNEX 2
 Government of Nepal
Ministry of Physical Planning and Works
Department of Roads
Project Directorate (ADB)
Bishalnagar, Kathmandu

Date:
Ref. No:

To
District Administration Office,
Dhankuta, Nepal

Subject:- Unrestricted Movement of Vehicles and Manpower: Road Network

Development Project- Hile-Basantapur Road Project, Contract No.: RNDP/LCB/HB-1

Dear Sir,

We refer to the Contractor (M/S Lama Construction Company)’s Letter No…… dated…..
(attached herewith) that states obstruction in the movement of vehicles delivering
construction material to the site for Hile-Basantapur Road Project due to imposed curfew
from 6:00 pm to 6:00 am by the Armed Police Force. Further, the contractor has stated that
since the equipments and manpower have to stay idle, this can result in time and cost overrun.

We, therefore, would like to inform you that this situation can lead to financial loss for the
Government of Nepal and hence request for your approval to allow unrestricted movement of
vehicles of M/S Lama Construction Company to the project site.

With sincere regards,

Project Director

CC: Lama Construction Company (Pvt.) Ltd.

Maharajgunj, Kathmandu
ANNEX 3
 LAMA CONSTRUCTION COMPANY (PVT.) LTD.

Date
Ref. No:

To
The Project Directorate
Department of Roads,
Bishalnagar, Kathmandu

Subject:- Request for Compensation

Dear Sir,

We refer to our letter dated …. regarding disturbance to work due to imposed curfew for the
time of 6:00 pm to 6:00 am everyday from chainage 0+790, since 2 months. This has
obstructed the movement of vehicles delivering construction materials to construction site. In
this time, we have incurred additional cost from idle resources.

Pursuant to sub clause 20.1 of CoC, the Contractor shall be given possession of all parts of
site and if not so, this shall be a compensation event.

Also, the event was unexpected and beyond our control, therefore, represents “Employer’s
Risk Event” under sub-clause 11.1 (b) of CoC.

The additional cost incurred is NPR 1,559, 180.00, calculated as:

Idle Hour per Rate per

S.N Idle Amount
Type of vehicle Nos. day (6:00 pm hour
. days (NRs.)
to 9:30 pm) (NRs.)
1 Tripper 8 74 3.5 500 1,036,000.00
2 Truck 2 74 3.5 500 259,000.00
Skilled Labour (1 74 3.5 38
3 10 98,420.00
for each vehicle)
Unskilled Labour (4 16
4 40 74 3.5 165,760.00
for each vehicle)
Total 1,559, 180.00

With sincere regards,

For & on behalf of Lama Construction (Pvt.) Ltd.

Project Manager
ANNEX 4
 LAMA CONSTRUCTION COMPANY (PVT.) LTD.
Date
Ref. No:

To
The Project Directorate
Department of Roads,
Bishalnagar, Kathmandu

Subject:- Notice of Claim

Dear Sir,

This is regarding the additional cost that we incurred due to imposed curfew for the time of
6:00 pm to 6:00 am everyday from chainage 0+790. We had notified the loss and requested
for the compensation through our letter dated …. Though the time lapsed, we are not
reimbursed yet.

We, therefore, claim for the compensation amount specified earlier plus the interest on that
amount for the period of delay.

Please find attached herewith a copy of detailed report of claim.

With sincere regards,

For & on behalf of Lama Construction (Pvt.) Ltd.

Project Manager
 Annex 5
1. Contract Agreement
2. Letter of Acceptance
3. Minutes of Meeting
4. Site Diaries
5. Record of Hindrance to the Site Access
6. Work Schedule (Planned and Updated)
7. Equipment Schedule
8. Manpower Schedule
9. News Related to Curfew (Paper Cutting of Different National Daily Newspaper)
10. Standby Record of Manpower and Equipments
11. Record of Additional Cost Incurred