SITE POSSESSION

BY
MOHD NAJIB ABD RASHID
 SITE POSSESSION

 Definasi:- Penyerahan kawasan pembinaan milik klien kepada

kontraktor bagi tujuan pembinaan mulai tarikh milik tapak bina hingga
pembinaan mencapai tahap penyiapan praktikal.
 Generally, site possession is the time that the client/government hand
over his site to the contractor in order to execute the work related to
construction only.
 The contractor is responsible to the site as well as to the activities that
been carried out. The contractor will not responsible to the personnel
that don’t have the authority to enter the construction site. Any
accident to the unauthorized personnel should not be the contractor
responsibility.
 By handing over the site to the contractor for construction work, the
client will repossession the site when the final certificate, partial CF,
contractor determination, etc is issues.
 DATE OF SITE POSSESION [PWD 2007 & PAM 2006]

 The date of site possession is stated in letter of acceptance.

 The date of site possession is used as a benchmarking to foresee the
completion date with regard to the construction period offer by the
contractor in tendering the projects.
 Usually the date of site possession is 2 weeks after received the Letter of
Acceptance.
 The 2 weeks given to the contractor to prepare a document before
construction work can be carried out. The document that is to prepare
during the 2 weeks given:
a. Performance Bond [if chosen]
b. Insurance
c. Workmen
d. Equipment & machineries
e. Financial
 SITE POSSESSION [clause 38 PWD 203A]

 [Clause 38.1] No work under this contract shall commences unless and
until the Performance Bond stipulated in clause 13 and such
insurance policy specified under clauses 15 & 18 shall have been
deposited with the government, PROVIDED THAT for the purposes of
this clause only (but for no other), if the contractor shall produce to the
government cover note of the said insurance policy and the receipt of
premium paid, it shall be a sufficient discharge of his obligation under
this clause.
 [clause 38.2] Unless the contract documents shall otherwise provide,
possession of the site as complete as may reasonably be possible but
not so as to constitute a tenancy, shall be given on or before the “date of
possession” stated in the letter of acceptance to the contractor who
shall thereupon and forthwith commence the works (subject to clause
38.1) and regularly and diligently proceed with and complete the works
on or before the date for completion as stated in appendix.
 [Clause 38.3] the “date for completion” of the works as referred to
under clause 39 hereof shall be calculated from the said “date for
possession”. PROVIDED ALWAYS that the possession of site may be
given in section or in any part or any other restriction upon possession
of the site shall be stated in the appendix to these condition or in
contract documents.
DELAY OF SITE POSSESSION [clause 38.4, 38.5 & 38.6
PWD 2007]

 [clause 38.4] in the event of any delay in giving possession of the site
from the “date of possession” as stated in letter of acceptance or delay
in giving any section or part of the site as provided in clause 38.3, the
S.O may issue instruction in regard to the revision of the “date for
possession and “date for completion” shall be appropriately
revised under clause 43.1(h) hereof, but the contractor shall not be
entitled to claim for any loss or damage caused by such delay in
giving possession of the site, nor shall he be entitled to terminate this
contract.
 [clause 38.5] in the event that the giving of the possession of the whole
site is delayed beyond 90 days of the “date for possession” stated in the
letter of acceptance, the S.O shall give written notice to the contractor
of the causes of such delay. Upon the receipt of the said written notice
issued by the S.O the contractor may inform the S.O. in writing of its
decision within 14 days of receipt of the said notice either to:
a. Agreed to proceed with the works when the site is subsequently made
available, in which case clause 38.4 shall apply in particular, the
contractor shall not be entitled to claim for any loss or damage caused
by such delay in giving possession of the site or
b. Terminate this contract, without prejudice to any other rights or
remedies that the government and the contractor may have as a result
of the termination.
 [clause 38.6] in the event that the giving of possession of any section or
part of the site (whether provided for in clause 38.3 or otherwise) is
delayed beyond 90 days from the date of possession stated in the
contract, then the S.O shall give written notice to the contractor to inform
the causes of such delay. Upon receipt of the said written notice, the
contractor may inform S.O in writing, within 14 days of receipt of the said
notice of its decision either to:
a. Agree to proceed with the works when the section or part of the site is
subsequently made available, in which case sub-clause 38.5(a) above
apply and in particular, the contractor shall not be entitled to claim for
any loss or damage caused by such delay as aforesaid or
b. request for S.O’s instruction to omit the relevant section or
part of the works from the contract. If the S.O agree to such request then
the relevant part of the works shall be duly omitted and deemed to be a
variation to the contract. Such variation shall not vitiate this contract. If
the S.O does not agree to such request as aforesaid, then the contractor
shall be entitled to claim for any loss/expenses caused by and in respect
of such delay beyond 90 days as aforesaid.
 SITE POSSESSION [clause 21 PAM 2006]

 Clause 21.1 [commencement and completion] on the date of

commencement, possession of the site shall be given to the contractor
who shall commence the execution of the works and regularly and
diligently proceed with and complete the same on or before the
completion date. In the event there is a delay by the employer in giving
possession of the site to the contractor, the architect shall grant an
extension of time under clause 23.8(f). Provided always that the delays
in giving the possession of the site does not exceed the period of delay
stated in the Appendix, the contractor shall not be entitled to determine
his own employment under the contract.
 Clause 21.2 [sectional commencement dates] where the different dates
of commencement for sections of the works, these shall be stated in the
Appendix.
 SITE POSSESSION [clause 21 PAM 2006]

 Clause 21.3 [where there are different completion dates for sections of
the works stated in the contract documents, the architects shall issue a
certificate of sectional completion when the section of the works are
practically completed. These provision in the contract in regard to
practical completion and DLP under clause 22.0 and release of
retention fund under clause 30.6 shall apply with necessary changes as
if each section was separate and distinct contract.
 Clause 21.4 [postponement or suspension of the work] the architect
may issue an AI in regard to the postponement or suspension of all or
any part of the works to be executed under the contract for a
continuous period not exceeding the period of delay stated in clause 19
& 20.(A), the contractor shall ensure full insurance covered by the
employer under clause 20(B) or 20(C), the employer shall ensure
similar insurance coverage.
 CONDITION PRIOR CONSTRUCTION

a) PERFORMANCE BOND
 BANK GUARANTEE
 INSURANCE GUARANTEE
 PERFORMANCE GUARANTEE SUM
b) PUBLIC LIABILITY INSURANCE
c) INSURANCE OF WORKS
d) WORKMEN COMPENSATION [ No Longer Needed in PWD]
e) SOCSO
f) WORK PROGRAMME
 INSURANCE

DEFINITION:-
1. Insurance of works
Indemnity given by 3rd party as a protection to the client and contractor for
any disaster during construction project
2. Public liabilities insurance
Indemnity given by 3rd party as a protection towards client and contractor if
accident happened affect the public and public property on the construction
site as well as around the site.
3. Workmen compensation
Indemnity given by 3rd party as a protection towards client and contractor if
the accident occurred on the construction site affect the contractor and
subcontractor workers.
4. SOCSO
Indemnity given by 3rd party as a protection towards client and contractor if
the accident occurred on the construction site affect the contractor and
subcontractor workers.
 THE IMPORTANCE OF INSURANCE

1. Construction industry is a high risk business.

2. Claim by the affected parties
3. Damages due to force majeure
4. The premium paid is much lower to cover the
damages.
5. A requirement to start the construction work.
6. Peace of mind
 Types of Insurance
Bil. Types of insurance Clause Scope of insurer Period of Insurance Amount Of Insurer
1. 1. Construction works
Insurance of works 2. Material on site Site Possession to CPC 1. Contract sum
3. Professional fee 2. Professional fee
4. Cost of cleaning due to 3. Cost of site cleaning
disaster

2. Site Possession to 1. Limit of liabilities

Public Liability 1. Injuries and death of Public. CMGD depending on contract
Insurance sum

3. Site Possession to
Contractor All Risk Bil 1 & Bil 2 CMGD Bil 1 & Bil 2
(CAR)

4. Workmen Compensation Death and injuries of main and sub Site Possession to
contractor income > RM 3000.00 CMGD 10% from contract sum

5. SOCSO Death and injuries of main and sub 1. Not depending on

contractor income < RM 3000.00 project
2. Sepanjang
tempoh
mencarum
 PUBLIC LIABILITIES INSURANCE [Clause 15 PWD
203A & Clause 19 PAM 2006]

 Without prejudice to his liability to indemnify the government[PWD 203A]

or Employer [PAM 2006] contractor shall as a condition precedent to the
commencement of any work under this contract effect and maintain such
insurances to cover the claim arising from public injuries and property
damages.
 Risk of insure [civilian]
1. Authorized civilian to the construction site [supplier, students, visitors,
etc]
2. Consultants, S.O and S.O’s representative.
3. Civilian around the construction site.
 Risk of insure [Property]
1. Public property and structure
2. Car and motorcycle
3. Property of authorized person to the construction site [cars and
motorcycle.
4. Property belong to consultants, S.O and S.O’s representative [cars and
motorcycle.
 INSURANCE of WORK [clause 18 PWD 203A]

 Clause 18.1(a) stated that the contractor shall in the joint names of the
government and the contractor insure against loss and damages of the
construction site.
 Scope of coverage:
1. Work that had been execute
2. Material on site
3. Professional fee
4. Cost of cleaning up the mess due to disaster
 Risk of insure:
1. Fire
2. Lightning
3. Explosion
4. Storm
5. Tempest
6. Flood
7. Ground Subsidence
 INSURANCE of WORK [clause 20.A PAM 2006]

 Clause 20.A.1 stated that the contractor shall as a condition to the commencement of any
work under the contract, take out and maintain in the joint names of the Employer,
contractor, subcontractor and interested parties a CAR insurance policy.
 Scope of coverage:
1. Work that had been execute
2. Material on site
3. Professional fee
4. Cost of cleaning up the mess due to disaster
 Risk of insure:
1. Fire
2. Lightning
3. Explosion
4. Storm
5. Tempest
6. Flood
7. Ground Subsidence
 CONTRACTOR’S ALL RISKS [CAR]

 Contractor all risk insurance is one of the alternative to

insurance of work and public liabilities insurance. It
combines both of insurance without reducing the risk
needed for the projects.
 The CAR insurance should be taken in the joint name of
government/employer, contractor and subcontractor.
 WORKMEN COMPENSATION [clause 16 PWD 203A &
clause 19.3, 19.4 PAM 2006]

 The Workmen's Compensation Act 1952.

 This Act provides for the compensation payment to an
injured employee or worker arising out of and in the course
of employment or contracting occupational disease.
 Where the employee or worker dies in the event of fatal
accident or contracting an occupational disease or in the
course and arising out of performing his duty or work, the
Workmen's
 Compensation Act 1952 provides for the compensation
payment to the worker's dependants.
 This Act is administered by the Department of Labour and
applies throughout Malaysia.
 Not applicable for worker that registered with SOCSO.
 SOCSO [clause 17 PWD 203A & clause 19.2 PAM
2006]

 The Social Security Organization is an organization set

up to administer, enforce and implement the Employees'
Social Security Act, 1969 and the Employees' Social
Security (General) Regulations 1971.
 The Social Security Organization provides social security
protection by social insurance including medical and
cash benefits, provision of artificial aids and
rehabilitation to employees to reduce the sufferings and
to provide financial guarantees and protection to the
family.
 SOCSO is the abbreviation for Social Security
Organization. It is commonly known in the Malay term
as PERKESO or Pertubuhan Keselamatan Sosial.
 An employee employed under a contract of service or apprenticeship and
earning a monthly wages of RM3,000 and below must compulsorily
register and contribute to SOCSO regardless of the employment status
whether it is permanent, temporary or casual in nature.
 An employee must be registered with the SOCSO irrespective of the age.
 SOCSO only covers Malaysian workers and permanent residents. As a
result, foreign workers are protected under the Workmen's Compensation
Act 1952.
 Nevertheless, SOCSO does not cover the following categories of persons :
 A person whose wages exceed RM3,000 a month and has never been covered before.
 Government employees.
 Domestic servants employed to work in a private dwelling house which includes a cook,
gardeners, house servants, watchman, washer woman and driver (Self-employed persons).
 Employees who have attained the age of 55 only for purposes of invalidity but if they
continue to work they should be covered under the Employment Injuries Scheme.
 Foreign workers.
Thank You