Knowledge Bank ~ Case Study – Civil Engineering Project Dispute

By their nature, infrastructure projects are usually contractually and commercially sensitive, as well as capital and time sensitive. Therefore efficiencies are key, and accurate project management and project reporting is imperative. Given the nature of these projects, and parties involved, it is important to monitor and track your contractual interests throughout the project.

In this case study we look at how a review of contractual obligations combined with Forensic Delay Analysis helped a contractor justify their entitlement to compensation.

Client Profile

Based in Hong Kong
Client size: Market Cap US$ 70m
Revenue: US$ 315m
Staff: 3,500

Project

US$ 3.6 billion Central to Wan Chai By-Pass and Island Eastern Corridor Link.

Challenge

Due to a combination of unclear contract terms, unforeseen ground conditions and variations, the contractor was suffering from a significant delay to completion, and therefore exposure to substantial damages.

Solution

Asgard expertise was used to carry out a thorough review of the contract terms to establish exactly what the contractor’s obligations were, especially with regard to the handover of the site to adjacent and interfacing projects. Asgard reviewed the existing notifications and contract schedule, identifying that the contractor had not been receiving their full entitlements.

A forensic delay analysis was also carried out which was used to justify an entitlement to an ‘Extension of Time’. This eliminated exposure to liquidated damages, and triggered compensation for both disruption and prolongation costs.

Asgard contributed expertise in the use of critical path techniques, complemented by extensive hands-on experience of heavy infrastructure projects.

Working together as a team with the contractor’s staff meant the right questions could be asked to pinpoint the key information needed to get the necessary justification. Importantly this was collated and available to the contractor’s client in a timely and efficient manner, further aiding resolution of the dispute.

Benefits

The contractor was able to justify entitlement to compensation for the delays suffered.
There was a clear understanding of their contractual position moving forward.
Improvements in their financial position helped manage the project moving forwards.

Key Lessons