T

I nteri m Payment Certificates

lnterim certificates are the means by which contractors obtain progress payments during the course of the contract.

lnterim certificates are normally issued monthly, although on very large contracts a shorter period may be Specified'

Many construction projects require interirn payments to be paid to a contractor. This is in order to relieve the
contractor of the burden of financing the whole of the works until completion; works which may'take many months or

years to eomplete.

An lnterim Payment Certificate is defined as any certificate of payment issued by the Engineer other than the Final
Payment Certificate. An interim valuation involves a revaluation of the whote work, not the work done since the last

certificate was issued, The valuations should be treated almost as 'mini final accounts' as they generally reflect all the

matters and items which appear in a final account.

lnterim valuations may now be subjected to the same scrutiny as final accounts. The valuation must be a realistic

assessment. A low valuation creates unreasonable financial problems for a contractor whereas a high valuation
creates a risk to the employer of paying sums for which he or she obtains no benefit.

As per the ICTAD/ SBD / 01, (Clause 42.1), the Contractor can submit to the Engineer monthly statements of the

estimated value of work done less the cumulative value certified previously. lnterim valuations are always carried out

on a cumulative basis: the quantity surveyor will value the whole of the work executed up to the valuation date and

then sums previously certified will be deducted. (Clause 42.2),fhe Engineer has to check the statement, certify the

arnount to be paid to the contractor and submit it to the Employer within 21 days of receipt of the bill. The amount

cefiified after appropriate deductions must be greater than the minimum amount for interi,m paymet[ggrtjficalq ?9
stated in the Contract Data.

After adjusting for deductions for advance payments (Clause 51 .3) and retention (Clause 48.1), the Employer has to

pay the Contractor within 14 days of receipt of the bill, (Clause 43.1),

The Engineer can make any corrections or modifications to any previous payment certificate in the light of latter
information (Clause 42.6).

The lnterim Bill may contain;

1. The Value of the permanent works executed up to last measurement date for any item in the B.O.Q,
including for contracto/s equipment, temporary works, nominated subcontractorc' / nominated supplierc'

works and the like, (Clause 42.4),

2. The value of work executed under variations, (Clause 42.5)

3. The 80 percent invoice value of materials delivered by the C-ontracbr on to the site for incorporation in the

permanent works but not yet incorporated in such works, (Clause 42.5),

4. Adjustments under price variations, (Clause 47.1).

5. Value of compensation events, (Clause 42.5),

/
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lnterim payments assist in the contractois cash flow. The interim payments are sums paid on-account of whatever

the contractor might finally be entitled to recover from the Employer,

Note: The Practical Completion Bill also can be considered as an lnterim payment.

Whichever method is used to calculate the amount of money due, an interim certificate is not conclusive about
anything. lt says nothing about quality of materials or workmanship, nor does it indicate satisfaction with the work

done to date. Anything included in such a certificate may yet be the subject of a later certiflcate. lt is only the final

certificate that is ever conclusive. As a result, the only obligation arising from an interim certificate is an obligation on

the employer to make apayment within the stated time. Failure to do so is a serious breach of contract.
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