156 Appendices

Appendix F
Preparation of Interim Payment Certificates
General

An internationally tendered contract can be expected to provide for payments

both in foreign currency and local currency. The ratio between foreign and
local currency payments will be fixed in the Contract for the measured
works. However, there will inevitably be a number of additional items and
adjustments, where the ratio between currencies will differ from that
applicable to the bulk of the currency.
The final appearance of the ‘top sheet’ of the Interim Payment Certificate
will depend on the preferences of the Employer and the Engineer. For
example, it may be preferred that the ‘top sheet’ provides separate columns
showing the amounts included in the Contract (previous amounts), totals
this month and total amounts to date. A horizontally drawn A3-sized
document would be appropriate.

Payments to Nominated Subcontractors (including Provisional Sums)

A separate calculation sheet will need to be prepared for the payments due
to nominated Subcontractors. This calculation sheet includes the percentage
on-cost due to the Contractor. It is possible that the ratio between foreign
currency and local currency will differ from that fixed for the Works.
Appendix F

Payment of Varied Works

The Employer and the Engineer will need to decide if payment for varied works
shall be included in the general evaluation of the Works or shown separately. It
is likely that there will be a unique ratio between foreign currency and local
currency. Further, if the Employer has a restricted budget, he may require that
the amounts expended are highlighted under this separate heading.

Valuation of Materials on Site

Since this item refers to the valuation of Materials on Site, it will be necessary
to measure the amounts of Materials actually on Site at the end of the
measurement period. The Contractor has to demonstrate that the Materials
comply with the requirements of the Contract. Values for site manufactured
Materials have to be negotiated.

An Employer’s and Engineer’s Guide to the FIDIC Conditions of Contract,

First Edition. Michael D. Robinson.
© 2013 John Wiley & Sons, Ltd. Published 2013 by John Wiley & Sons, Ltd.
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Appendix F 157

Adjustment for Changes in Legislation (Sub-Clause 13.7)

Increases or decreases in Cost arising from Changes in Legislation are limited

to those costs arising from a change in the Laws of the Country. Consequently
the adjustment will be valued entirely in local currency.

Adjustment for Changes in Cost (Sub-Clause 13.8)

Increases or decreases in Cost may arise from increases/decreases in the value

of both foreign and local indices. The adjustment will therefore be made in
both foreign and local currencies. Standard practice is to apply the fixed
currencies ratio given in the Contract. There are a number of possible
variants. In many instances suitable local indices may not be available.
Consequently changes in cost of local labour and local materials may be
evaluated against actual payrolls and invoices, leaving only the foreign
adjustment to be calculated by the use of a formula proposed by FIDIC.

Deductions for Retention Money

The amount of retention to be deducted is calculated by applying the

percentage given in the Appendix to Tender until the limit of the Retention
Money is reached.

Return of Retention for the Works or Sections or Parts

Once a Taking-Over Certificate is issued, a portion of the Retention is to be

Appendix F
returned. The Engineer is entitled to withhold certification of the estimated
cost of outstanding work until it has been completed. The calculation of the
amount to be returned in respect of Sections or Parts is a little more
complicated than for the whole of the Works as indicated in the following
table.
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158 Appendices

Whole of the Section of the Part of the

Works Works Works
(%) (%) (%)
Amount of Retention Money 100 100 100
Repayment due on Taking-Over 50 40* 40*

Balance 50 60 60
|
Repayment due on expiry of the |
Defects Notification Period for a |
Section - 40*-----------------------|
| Payable only when
| parts comprise a
| whole section
Repayment due on expiry of the |
Defects Notification Period for the |
whole of the Works 50----------------------|
*These portions are calculated by dividing the estimated contract value of the Section or part by the
estimated final Contract Price.

Summary of release of retention money

1 Parts
1.1 An initial 40% is due on taking over.
1.2 A second 40% is due once the last of the Defects Notification Periods of the
Appendix F

parts comprising a Section expires.

1.3 The remaining 20% is included in the provisions of 2.3 below.

2 Sections
2.1 An initial 40% is due on taking over.
2.2 A second 40% is due once the Defects Notification Period for the Section
expires.
2.3 The remaining 20% for all Sections is due once the Defects Notification
Period forthe last Section expires.

3 Whole
3.1 The first 50% is due on taking over.
3.2 The second 50% is due once the Defects Notification Period for the whole
of the Works expires.
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Appendix F 159

PROJECT TITLE CONTRACT NO......................

INTERIM PAYMENT CERTIFICATE No.......... FOR MONTH/YEAR...................
CONTRACTOR (Name)
Foreign Currency Local
Currency
Measured Works

Add Payment to Nominated Subcontractors

Add Payment of Varied Works
Add Payment of Claims
Add Valuation of Dayworks
Add Valuation of Materials on Site
Add Changes in Legislation Cl. 13.7
Add Changes in Cost Cl. 13.8

Subtotal (1)
Deduct Retention Money (Limit …%)

Subtotal (2)
Add Return of Retention Money

Subtotal (3)
Add Advance Payment

Subtotal (4)
Deduct Repayment of Advance

Appendix F
Subtotal (5)
Deduct Amounts Previously Certified

Amounts now certified for payment

Certified ............................ Submitted by .........................

Title/Position .......................... Title/Position ..........................
Date ........................... Date ........................................