Notice of Delay in the release of the retention (1st part)
Our Ref: xxx
Date:
To
xxx Contracting LLC
P. O. Box xxx
Dubai, U.A.E.
Attention : Mr. xxx, Group Procurement Manager
Project : Design and Build of Coastal Village Residential Building.
Subject : Notice of Delay in the release of the retention (1st part)
Dear Sir,
We refer to M/s xxx (Contractor Name) letter xxx dated 17 January xxx in relation to your ongoing default in the release of the first part of retention in accordance with the terms of the Subcontract agreement.
We are in receipt of your letter xxx dated 25 January xxx and respond as follows,
You are arbitrarily withholding the due payment of the first part of retention in a direct breach of the terms of the Subcontract agreement.
- In accordance with the Subcontract agreement, first part of retention amounting to 5% shall be released after completion of full delivery of all Pods.
- Delivery of all pods was completed on 5 January xxx, (please refer to last delivery note No. xxx dated 24 December xxx) and all pods have been subsequently fully approved and 100% certified. Accordingly, the payment of the first part of retention is due since 06 January xxx.
Your statement that “there are pending variations/back charges and other final account formalities” is a general statement which only serves to further defer an already overdue payment to M/s xxx (Contractor Name).
- In relation to variations:
There are no pending open variations. M/s xxx (Contractor Name) submitted variations VTC 003 rev. 002 and VTC 004 rev.00, and both variations have been officially approved by the Main Contractor (refer to Appendix A).
The approved amount of SAR xxx relative to VTC 003 rev.002 and VTC 004 rev.00 remains till today unsettled by the Main Contractor.
- In relation to back charges:
M/s xxx (Contractor Name) has received a debit note No: Upd 2020-DN01 dated 21 December xxx from the Main Contractor for an amount of SAR xxx for border charges settled by the Main Contractor which M/s xxx (Contractor Name) has acknowledged and approved.
No other back charges have been substantiated by the Main Contractor since the completion of the delivery of pods, and no other back charge amounts where either approved or confirmed by M/s xxx (Contractor Name).
While we have previously communicated that M/s xxx (Contractor Name) would potentially agree to the Main Contractor attending to damages sustained during transportation on individual pods, the Main Contractor did not provide any supportive details of such damages or any associated detailed cost breakdown for our review and approval.
- In relation to final account formalities:
Based on the above, a net confirmed payable of SAR xxx (representing SAR xxx-xxx relating to variations/back charges) is due to M/s xxx (Contractor Name) and remains unsettled since December xxx.
Additionally, we also record that M/s xxx (Contractor Name) has submitted a Claim relating to transportation for an amount of AED xxx, which is an additional and exceptional cost that M/s xxx (Contractor Name) incurred as a result of the Main Contractor’s instruction to maintain deliveries during pandemic border restrictions and which the Main Contractor approved 14 June xxx. This amount also remains un-settled by the Main Contractor.
While we may support the Main Contractor by discussing the timeline for payment of approved claims and variations at his earliest convenience, we urge again the Main Contractor to release the first part of retentions amount of SAR xxx with immediate effect.
Yours faithfully,
On behalf of xxx LLC
xxx
project Manager