Forewords‎ > ‎Reviews‎ > ‎

EPCC and Milestone payment

posted Jun 16, 2018, 8:17 AM by jeffery jim

You might want to learn the appropriate terminologies before going online and look impressive like a senior in construction industry. Let's talk about types of payment and types of construction.

There are two types of payment; interim or progress payment and milestone payment. Interim payment is payment made progressively as per evaluation or measured on physical achievement as well as financial achievement monthly or weekly. This payment type is usually used by most contract forms ranging a typical JKR 203 form and its variations, PAM, CIDB and even FIDIC.

Milestone payment on the other hand is a simplified type of payment where payment only made based on the achieved milestones which are agreed initially when entering a contract. The setting of milestones can be very generic when it comes to simple structures or customized when it comes to engineering, procurement, construction and commissioning (EPCC) type of contract and it can be binded in various contract forms as mentioned above.

Before you run rampage talking about SSER without having fundamental knowledge which make you can look a little stupid, it is better to understand the actual concept of milestone payment rather than making reference to the interim payment type.

Of course you are not wrong when you raise the issue on 80% payment when progress is under 15% since most milestone have physical-finance difference up to 40% of the project value.

Before making any further comment, try to retrieve their contract document and check the actual project milestones to their progress. Milestones payment does not mean payment have to be paid according to physical (construction) progress and may put precedence on engineering and procurement in EPCC type of construction. Nevertheless, almost all milestone payment constructions indicate more percentage of work done than payment made.