Variation claims in UAE construction: how to quantify and get paid
The work was done. The variation was real. And the money was gone anyway — because the notice missed the 28-day bar. On one project, two missed notices cost a contractor AED 1.3M.
Here is the hardest lesson in contractor finance: the notice is the entitlement. Under FIDIC, your right to be paid for a variation or to claim time begins when you serve the correct notice, in time. Miss the window, and a perfectly valid claim is worth nothing.
1. Notice: protect the entitlement first
FIDIC’s time bars are unforgiving. Treat every instruction, site-condition change and delay as a potential notice event, log it the day it happens, serve notices in writing referencing the contract clause within the window, and keep a notice register.
2. Quantification: build a number, not an estimate
A defensible quantification is built from measured work (actual quantities), cost records kept contemporaneously (labour, plant, materials, subcontractors), and programme evidence showing how the change affected sequence and duration. The goal is a documented number the Engineer can’t easily wave away.
3. EOT and prolongation: cost the time, don’t just claim it
An extension of time protects you from liquidated damages, but the money is in the prolongation and disruption cost — the extra site overhead and resources you carried. Assess the entitlement, then cost its financial impact.
4. Defend the deductions
When an LD deduction is unjust, meet it with financial evidence, not a letter of protest. The same discipline applies to retention withheld against open defects: close the defects, trigger the release, and demand it in writing with a stated deadline.
Why this belongs with your finance advisor
A claim is a financial event before it is a legal one. A variation affects your cash flow; your cash flow affects your bank facility; your facility decides whether you can take the next project. When the same advisor serves the notices, builds the quantum and keeps the bank informed, nothing falls through the gap between your QS, your accountant and your lawyer.
CA. Binod Chapagai — Chartered Accountant & Virtual CFO, APM Business Consultancy. Connect on LinkedIn.