PROJECT NAME Al Amerat Wastewater Project, Contract A1 – Design, Build,

Operation & Maintenance of the Al Amerat Wastewater

Treatment Plant, Pumping Stations and Treated Effluent
Works – Contract Number HAYA/E045/2014

CONTRACT REFERENCE HAYA/E045/2014

CONTRACT AGREEMENT March 30th 2015

DATE

DOCUMENT TITLE Planning and Milestones

C.R. 1213413 P.O. Box 1832, Ruwi, P.C. 112, Sultanate of Oman
DELAY EVENTS ANALYSIS

Table of Contents
1. Introduction.........................................................................................................................3

2. Clarifications........................................................................................................................3

3. Revised Program..................................................................................................................3

a. Conditions to Achieve.....................................................................................................3

b. Summarized Program......................................................................................................4

c. Cash Prevision.................................................................................................................5

4. Payments.............................................................................................................................6

a. Intro.................................................................................................................................6

b. Milestones Validation......................................................................................................6

5. Conclusion...........................................................................................................................7

6. Appendices:.........................................................................................................................7

a. Revised Schedule.............................................................................................................7

b. Monthly Milestones.........................................................................................................7

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 DELAY EVENTS ANALYSIS

1. Introduction
During the Management Meeting held on 12 November 2017, Contractor was requested to
prepare an updated schedule of work highlighting the completion for the Civil Works and the
completion of the Electro-Mechanical installation and mitigating the effects of the delays
suffered on the project and acknowledged by all parties.
As the contractor expressed concerns regarding the all the deduction being applied by the
Project Manager and Purchaser to his Interim Payment Applications and the negative effect
this is having on the cash flow of the project and thereof the progress of work, a proposal to
review payment condition based on milestones was also considered.
Accordingly we hereby present a short summary of the contractor proposal for a revised
program as well as a payment scheme base don milestones.
This shall not constitute a waiver of any of Contractor’s rights pertaining delaying events, and
shall not limit Contractor’s entitlement. It is understood that this proposal is prepared based
on the mutual directions of both Parties, and Contractor will always be able to retract this
proposal in case no resolution was reached by the Parties following submission of this
document.

2. Clarifications
The target of the proposed schedule is to achieve substantial completion of civil works and
installation works of the main process structures in the best time that could lead to an early
start of commissioning works on some parts of the project.

The completion of civil works (CW) as referred to hereafter is understood for each structure to
be substantially completed in terms of structural and architectural works to allow the rest of
the Installation work to proceed, however some minor activities might still remain such as
finishing works, paint, etc.

The completion of installation works (M&E) as referred to hereafter is understood for each
structure to be substantially completed in terms of electro mechanical installation works to
allow the testing and commissioning to start. However some minor activities might still remain
such as small power, marking, paint, etc.

The completion of Stage 2 as defined under the contract will extend beyond the last dates
defined here above as this stage also includes all other ancillary external works such as
boundary walls, irrigation, etc. as well as several month of pre-commissioning,

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 DELAY EVENTS ANALYSIS

3. Revised Program
A. CONDITIONS TO ACHIEVE
We have reworked the schedule in order to mitigate the various delays faced by the project
however, we have considered several assumptions that have to be realized to allow the
contractor to achieve the same:

 Release of unpaid amounts/deduction applied to previous IPA

 Payment of future Contractors IPA without deduction
 Prompt approval of all contractors submittal
 Prompt inspection at site and no hindrance on receiving RFI
 Inspections to be performed along the works and not step by step
 Work at night is not stopped or hindered
 Inspectors absence should not stop the work
 1 day curing for blinding concrete, 3 days curing for structural concrete
 Authorization to proceed with next floor works without waiting for 21days by
maintaining slab shuttering supports and props

B. SUMMARIZED PROGRAM
You will find in appendix a the revised monitoring program proposed however for ease of
understanding and for a better identification of completion targets, we have detailed here
after some of the major dates to be considered

 Completion of most of APS1 Civil and Electromechanical works (except Electrical

works) by end April 2018

 Completion of most of APS2 Civil and Electromechanical works (except Electrical

works) by mid June 2018

 Completion of most of the STP Civil and Electromechanical works (except Grit and
grease) by end of November 2018

APS 1 APS 1 APS1 APS 2 APS 2 APS 2 Rising Main Rising Main
office Pumping Electrical office Pumping Electrical APS1 to APS2 to STP
bldg bldg. building bldg. APS2

CW End Feb End End April 18 End Mid May Mid June 18
18 March 18 Feb 18 18

M&E End April Mid July 18 End May End July 18 End July 18 End Sept 18
18 (incl. Power 18 ( incl. Power
connection) connection)

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 DELAY EVENTS ANALYSIS

Pretreatment Grit TE Electrical Aeration Sludge Admin building

except Grit & and pumping bldg. 930 and and Supervision
grease Grease station MBR OCU room

CW Mid sept 18 Mid End Mid July Mid July End Mid August 18
Oct 18 March 18 18 18 June 18

M&E End Oct 18 Mid End mid Sept End Nov End Mid Oct 18
Dec 18 August 18 18 18 Sept 18

Completion of all works for APS1 will be in August 2018 and all works of APS2 in Oct 2018

Completion of stage 2 works as defined in the contract and the baseline planning is foreseen
in beginning of June 2019 which includes all finishes, external networks and landscaping and
other non-essential ancillaries.

As indicated above, phase 2 works also include several month of testing and precomissioning
activities which could allow in certain conditions to start receiving waste water before that
date.

C. CASH PREVISION
The achievement of the above program will result in the possibility for the contractor to
invoice progress on a monthly basis and in line with the contract schedule 19 values as
foreseen in the table here after

Period certified Nov Dec Jan Fey Mar April Mai June
IPC13 excl. 2017 2017 2018 2018 2018 2018 2018 2018
NJS & LDs

overall %age 19.1% 20.7 1.8 2.8 1.2 2.0 2.0 2.2 1.4

Period July 2018 Aug Sept Oct Nov Dec June Aug Dec
2018 2018 2018 2018 2018 2019 2019 2019

overall %age 2.4 4.8 2.1 4.7 3.6 4 9.7 11 4.5

The payment on time of all works completed is a necessity to allow the proper progress of the
contractor work and the table presented above is given for indicative purpose only and should
not limit the rights of the contractor for his payment in any way

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4. Payments
A. INTRODUCTION
Throughout the project’s lifetime, Contractor faced a shortage in payments as the approved
progress of work has always been above the approved valuation of payment. Indeed as of 25 th
July 2017 ( last IPC) , the approved progress was 33.7% while the certified value of work done
was only 19.08%

This situation has been mainly generated due to the conditions imposed for the payment
approval where some task have to be completed to 100% to trigger payment without taking
into consideration that they are already progressed to near completion.

As a few examples

In design: progress for design is completed at 95% however as long as all the documents
related to a discipline are not approved, the payment is not trigger even when the job has
almost been completed and the full cost already taken by the contractor

In procurement: if an equipment is delivered to site and inspected therefore completing at

100% of the procurement task, the payment is not validated pending the validation of the
related warranties and until the equipment becomes required for installation.

In Construction: if the steel fixing of a concrete structure is completed to 90%, the status is
agreed as progress however as no formal inspection validates such a level (Inspections are
only signed of when 100% is complete) the payment this task is delayed till the following IPC.

In order to resolve this issue and relief the contractor from the burden of financing the project
on his own funds, it was agreed by the management to establish a list of simple milestones
that can be easily checked and validated ( without a long list of justifying documents) and that
would allow the release of interim payments

We have therefore prepared a list of monthly milestones for the next 5 month to be discussed
and agreed and should the same been deemed advantageous by all parties we could proceed
with the same philosophy for the rest of the project.

B. MILESTONES VALIDATION
As indicated above, the primary reason for the use of milestone is to simplify the payment
process and to allow the Contractor to obtain payment for all works done without delay

We propose the following condition to validate a milestone:

Design Milestone: document submitted and approved as noted

Procurement milestone: equipment received at site and inspected and approved as noted

Construction milestone, single activity completed at site and inspected and approved as noted

As the purpose is to cover the full scope of works with a limited number of milestones, it is
clear that the value of each milestones is not in line with the actual works described by the

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milestone, however the values is related to other activities completed that month. However,
the validation of the milestone must be based only on the described activity of the milestone
and not the measured progress of all the activities related to the same month

5. Conclusion
Throughout the project’s lifetime, Contractor faced several difficulties beyond its
responsibility, liability and control that affected its ability to complete the Works in
accordance with the contractual milestone and approved baseline program as well as his
financial situation

However, the contractor has always maintained a proactive attitude and took necessary
measures to mitigate these delays and continue the works, the proposed program is the
contractors commitment to the completion of the project.

The contractor expects the same commitment and dedication from the employer and request
that the proposed program be approved as the revised baseline program of work and the
payment valuation conditions be reviewed to allow the contractor of being paid for the total
value of work done

6. Appendices:
A. REVISED SCHEDULE
B. MONTHLY MILESTONES