The Star Global Malaysians Forum - Posted: 01 August 2005 at 8:47pm

Q

Dear Nik, how do you define 'Customer Communication' in the Construction Industry'? (Civil and Building)

A

It is unfair for me to say that what I am about to say here suffice! I'll try to make it brief (as usual) Basically 'customer communication' is EVERYWHERE in the core processes of the construction industry be it civil and building or mechanical/electrical. Customer communication is not limited to how you contact your client but vice versa

During the Tendering Stage - initial site visit (Q & A), pre-q, review/request for justification of certain tender requirements or conceptual drawings/schematics, initial review/or rather dipute on contractual requirements prior to award or prior to acceptance, tender adjudication and negotiations, finalizing Bill of Quantities etc.

In the contract commencement stage, usually prior to site mobilization, there will be a need for you to prepare a Project Quality Plan together with the lists of Method Statements, ITP, master schedule, drawings/proposals etc. You will definitely need transmittal notes to send all these (or to communicate) to your client

Pre-Construction Stage - Immediately after site office setup/mobilization, you will be doing some sort of a 'kick-off meeting' - usually attended by the client where probably they tend to do some induction and briefing.

Construction Process

During ops, when the client started to get 'a lil bit more serious', they will start issuing 'non-conformances' (also known as customer complaint) followed by your ascertaining of root-causes and correction/corrective actions also constitute customer communication. Same goes to when the customer send in specifications, it is not only limited to 'customer property' that you have to look after but also generically related to customer communication.

When there are some 'deviation in construction works', 'architect/engineer instructions', 'variation orders', 'Project Progress Meeting' (with the client) etc.

Post Construction Stage

CPC and CMGD are at your Client's 'mercy'. For you, during this stage,usually you will start sending/conducting 'Customer Satisfaction Survey'. Thus, CPC, CMGD and your CSS form - constitute 'customer communication'. The complaints/comments issued by the client after CPC and during DLP (defects liability period) prior to CMGD also constitute the same thing - customer communication.

In General - 'Confirmation of Verbal/Telephone Instruction' by the Client, all types of correspondences including telephone/handphone calls, faxes, internet enquiry, e-mails, Intranet etc. are the general elements of customer communication.

so much for the 'brief explanation'.

The Star Global Malaysians Forum - Posted: 20 September 2006 at 5:31pm

The Star News (Courts) - September 20, 2006.

Judge: Firm did not commit offence

KUALA LUMPUR: It was a case of the wrong entity charged. A Sessions Court yesterday discharged and acquitted a subcontractor accused of a negligence that led to the death of corporate consultant Dr Liew Boon-Horng. In delivering his verdict, Judge Akhtar Tahir said he found that MWE Advance Structure Sdn Bhd had not committed any offence as framed against it under Section 20(3) of Occupational Safety and Health Act 1994.

(The section states that the person who erects or installs any plant for use by persons at work must ensure that nothing about the way it is erected or installed makes it unsafe or a risk to health when properly used.)

MWE Advance Structure was charged with failing to ensure the safe installation of a steel formwork by Higro Enterprise on the 20th floor of Block B, Plaza Damas. A representative of the company had on April 20 pleaded not guilty to the charge.

(Formworks are moulds into which concrete or similar materials are poured into at a construction site.)

Akhtar said Section 20(3) of the Act did not mention that the person who allowed the installation of the steel formwork to have committed an offence.

(The company had engaged Higro Enterprise as a specialist formwork contractor for the Plaza Damas condominium project).

Dr Liew, 35, managing consultant of Ethos Consultant, was killed when an iron mould, weighing almost two tonnes, fell onto his BMW as it was being driven into the car park of Plaza Damas last Dec 30. Akhtar said he was of the opinion that it was Higro Enterprise that had committed the offence under Section 20(3) of the Act.

"Based on the charge, the installation of the steel formwork was done by another party, which is Higro.

"It is my opinion that Higro had committed the offence and not MWE Advance Structure.

"Therefore, I have to give an acquittal to MWE Advance Structure because this offence did not exist," he said.

The judge gave his decision after hearing a preliminary objection raised by the company’s lawyer Rosli Dahlan on Sept 4, that the charge framed against MWE Advance Structure was defective. In the same court, supplier Simple Formwork Construction Sdn Bhd had claimed trial to failing to take the necessary steps to ensure that the steel formwork supplied to Higro Enterprise was safe for use.
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It's NOT my intention to question the judge's final ruling and I respect the court's final decision. (unless both Higro/Simple Formwork wish to contest the decision)

Alas, I'm a bit confused on charges especially being made on Simple Formwork and Higro Enterprise. I might be wrong but :

What is the real problem actually?

"Based on the charge, the installation of the steel formwork was done by another party, which is Higro.

"It is my opinion that Higro had committed the offence and not MWE Advance Structure.

"Therefore, I have to give an acquittal to MWE Advance Structure because this offence did not exist," he said.

MWE is the main contractor - (thus, it's a lesson for them that in the future), they should have a system that takes into account :

a) Criterions of selection of sub-contractors (including Higro),

b) Sample submission/inspection and test results (prior to installation) from Higro to MWE (as part/parts of contract requirements),

b) Criterions of annual performance appraisal of the sub-contractors,

c) Monitoring system during installation process.

Remember, failure in sub-contractor's work may also reflect the failure of the main contractor as well.

And where does The Client's (Client to MWE) responsibility fall under?

Excerpts from New Straight Times - 03/01/2006

On Sunday, visiting the Sri Hartamas crime scene — for that is what it may well out turn out to be — Fong had occasion to see red. Seven warnings had been served for various safety violations in the 26 months since work on the office and apartment building began. Residents, as in many other instances, complained of flying debris and noise. The contractor’s delinquency seems to have been evident enough to leave nothing amiss in the Department of Occupational Safety and Health’s inspection procedures, which gave the company a "D" for compliance. "This clearly indicated no commitment on the part of the management to adhere to the regulations and prioritise safety," said Fong.

Another excerpt - NST 02/01/2006

Failed: seven out of nine worksite inspections. That’s the safety record of the construction company in charge of the worksite from which a cement mould fell 20 storeys and crushed a management consultant to death in his car.The company, MWE Advance Structure Sdn Bhd, was served seven stop-work orders in the 26 months since construction work on Block B of the Plaza Damas serviced apartments began. It was allowed to resume work after each breach was rectified, said Human Resources Minister Datuk Seri Dr Fong Chan Onn.

The company is a unit of listed group MWE Holdings Bhd.

"MWE (Advance Structure) did not have a good safety history," said Fong.

The company was given a safety rating of D, E being the lowest rating by the Department of Occupational Safety and Health. Fong did not say what the ranking indicated.The company had also been served three compounds for safety breaches since work started on Oct 28, 2003. The last inspection before Friday’s tragic accident was on Sept 27, 2005. Among the main offences were unsafe scaffolding and the absence of guardrails. Also, load platforms had not been designed by certified engineers, and they had used unregistered heavy machinery.

On Simple Formwork - they were separately being charged for failing to take the *necessary steps* to ensure that the steel formwork supplied to Higro was safe to use.

Questions :

"Who charged Simple Formwork? Higro?", "What's the relationship between Higro and Simple Formwork? - Is Simple Formwork another supplier to Higro?"

The *necessary steps* as I understand them are (not limited to the following) :

method statement, work/manufacturer's instruction, standards and codes of practice, monitoring and follow-up, sample submission, proper inspections, specification adherence etc.

If Simple Formwork seem to have all these, then check again, it may be problems of insufficient/unsuitable installation methods or monitoring/follow-up from them on Higro during installation process.

On Higro, if I read the first news right, it says something like :

(The company had engaged Higro Enterprise as a specialist formwork contractor for the Plaza Damas condominium project).

and

In the same court, supplier Simple Formwork Construction Sdn Bhd had claimed trial to failing to take the necessary steps to ensure that the steel formwork supplied to Higro Enterprise was safe for use.

It's odd that Higro failed to realize during installation that the 'formwork is NO GOOD?" being a specialist?

The charges on Higro is 'fail to ensure steel formwork properly installed'

The charges for Simple Formwork is 'formwork is found not safe to use?'

How do I connect the two?

Actually, nobody thought that the tragedy will happen on the first place - that's why too many parties 'took for granted' on the 'specs' I've mentioned above. When everybody got the 'sudden electrical shock' due to this unexpected fatal accident, I hope it's not the typical 'finger pointing' under the pretext of law that is happening at the moment.
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Posted: 22 September 2006 at 9:37pm

Well, it appears that my last message has drawn so many attention from so many parties. Some were good, some were inquisitive/curious and some simply asked me to 'reconsider' my comments. Please register as GMN members and put your comments here and we can start a whole new 'show' in a more healthier way. The following is one of them (good ones) that appeared in another forum.

Assalaamu'alaikum wbr.

Terlebih dahulu, izinkan saya merakamkan tahniah kepada tuan/puan semua kerana terlibat dalam forum ______. Ini merupakan tanda betapa tingginya keprihatinan/perjuangan tuan/puan semua terhadap keselamatan dan kesihatan pekerjaan di Malaysia.

Walaupun saya tidak pernah terlibat secara aktif dalam forum ini, namun kita semua mempunyai matlamat yang sama demi 'menyelamatkan seberapa banyak nyawa' di tempat kerja menerusi sistem pengurusan keselamatan dan kesihatan pekerjaan yang dipayungi oleh Akta Keselamatan dan Kesihatan Pekerjaan 1994.

Saya ingin menarik perhatian kepada e-mail yang dihantar oleh saudara____ (____) dan pendapat beliau serta lain-lain pendapat bernas dalam forum ini hasil daripada komen saya di Global Malaysian Forum di bawah kelolaan akhbar The Star. (saya sarankan _____ membaca lain-lain komen dalam forum yang sama dan tidaklah hanya melihat kepada komen berkenaan sahaja, kerana saya telah mengikuti kes ini semenjak ianya bermula lagi)

a. Saya tidak mewakili dan tidak pernah terlibat dengan mana-mana pihak dalam Plaza Damas,

b. Pendapat saya adalah pendapat peribadi serta bukanlah ingin mempersoalkan kes yang sedang dibicarakan atau mempersoalkan keputusan mahkamah sepertimana dakwaan ______ (perkara ini juga telah saya jelaskan kepada beberapa pihak tertentu yang memberikan maklumbalas terhadap komen saya dan semuanya saya kira telah diselesaikan) Pendapat saya lebih kepada mengingatkan kontraktor utama supaya menyemak semula sistem untuk ditingkatkan (terutamanya dalam aspek pemantauan dan penilaian yang lebih efektif)

c. Saya tidak pernah mengenali mangsa secara rapat - cuma kebetulan mendiang pernah terlibat dalam pembikinan KPI untuk GLC di mana saya juga terlibat dalam perkara yang sama tetapi menerusi firma perundingan yang berbeza,

d. Saya bersetuju dan telah menyimpulkan dalam pendapat berkenaan bahawa - kemungkinan ada elemen 'tuding-menuding' atau 'tuduh-menuduh' (blaming culture/fingerpointing) sedang berlaku (seperti kebiasaan). Saya harap undang-undang dapat menyelesaikan masalah ini seadil-adilnya supaya tidak ada pihak yang tidak bersalah tiba-tiba dipersalahkan pula.

e. Cuma saya juga mengharapkan agar pihak klien - kontraktor utama - sabkontraktor/vendor/pembekal tidak mengamalkan sikap mengambil mudah terhadap pelaksanaan keselamatan & kesihatan pekerjaan - walaupun telah ada ribuan sijil/persijilan sekalipun atau dokumentasi yang 'canggih' atau pernyataan dasar yang begitu indah dan lain-lain.

Walaubagaimanapun, saya ingin merakamkan ucapan terima kasih sekali lagi kepada tuan/puan semua dan _____ kerana sudi membaca pendapat saya yang tidak seberapa itu.

Wassalaamu'alaikum wbr.

Salam Hormat Seperjuangan
Nik Zafri

The Star Global Malaysians Forum - Posted: 09 January 2007 at 7:33pm
Question on Performance Bond. Here's something you may like :

http://www.attny.com/gci32djd.html

Construction Surety Bonds In Plain English

This article is an abridged version of Federal Publications’ February 1996 CONSTRUCTION BRIEFINGS entitled Surety Bond Basics, copyright 1996 by Federal Publications, Incorporated, written by Messrs. Donohue and Thomas. A complimentary copy of the CONSTRUCTION BRIEFINGS may be obtained by contacting our firm. Subscriptions to CONSTRUCTION BRIEFINGS are available from Federal Publications, Incorporated, 1120 20th Street, N.W., Washington, D.C. 20036. You may call Federal Publications at (202) 337-7000 or (800) 922-4330.

Most construction contractors are familiar with the process of obtaining surety bonds, but they may not be aware of the legal relationships bonds establish the relationships among the principal (the contractor), the obligee (usually the owner) and the surety. Contractors’ lawyers, on the other hand, are aware of the rights and the obligations of the principal, obligee, and surety, but they may lack practical knowledge about the process of obtaining bonds. This article is directed to both contractors and their lawyers. It explains in plain English just when construction surety bonds are required on federal, state, and private projects, and the bonding requirements contained in widely used contract forms, including federal government contracts, AIA contract forms, and the AGC subcontract form.

SOME SURETY BOND BASICS

A surety bond is not an insurance policy. A surety bond is a guarantee, in which the surety guarantees that the contractor, called the “principal” in the bond, will perform the “obligation” stated in the bond. For example, the “obligation” stated in a bid bond is that the principal will honor its bid; the “obligation” in a performance bond is that the principal will complete the project; and the “obligation” in a payment bond is that the principal will properly pay subcontractors and suppliers. Bonds frequently state, as a “condition,” that if the principal fully performs the stated obligation, then the bond is void; otherwise the bond remains in full force and effect.

If the principal fails to perform the obligation stated in the bond, both the principal and the surety are liable on the bond, and their liability is “joint and several.” That is, either the principal or surety or both may be sued on the bond, and the entire liability may be collected from either the principal or the surety. The amount in which a bond is issued is the “penal sum,” or the “penalty amount,” of the bond. Except in a very limited set of circumstances, the penal sum or penalty amount is the upward limit of liability on the bond.

The person or firm to whom the principal and surety owe their obligation is called the “obligee.” On bid bonds, performance bonds, and payment bonds, the obligee is usually the owner. Where a subcontractor furnishes a bond, however, the obligee may be the owner or the general contractor or both. The people or firms who are entitled to sue on a bond, sometimes called “beneficiaries” of the bond, are usually defined in the language of the bond or in those state and federal statutes that require bonds on public projects.

TYPES OF SURETY BONDS

BID BONDS

A bid bond guarantees the owner that the principal will honor its bid and will sign all contract documents if awarded the contract. The owner is the obligee and may sue the principal and the surety to enforce the bond. If the principal refuses to honor its bid, the principal and surety are liable on the bond for any additional costs the owner incurs in reletting the contract. This usually is the difference in dollar amount between the low bid and the second low bid. The penal sum of a bid bond often is ten to twenty percent of the bid amount.

PERFORMANCE BONDS

A performance bond guarantees the owner that the principal will complete the contract according to its terms including price and time. The owner is the obligee of a performance bond, and may sue the principal and the surety on the bond. If the principal defaults, or is terminated for default by the owner, the owner may call upon the surety to complete the contract. Many performance bonds give the surety three choices: completing the contract itself through a completion contractor (taking up the contract); selecting a new contractor to contract directly with the owner; or allowing the owner to complete the work with the surety paying the costs. The penal sum of the performance bond usually is the amount of the prime construction contract, and often is increased when change orders are issued. The penal sum in the bond usually is the upward limit of liability on a performance bond. However, if the surety chooses to complete the work itself through a completing contractor to take up the contract then the penal sum in the bond may not be the limit of its liability. The surety may take the same risk as a contractor in performing the contract.

PAYMENT BONDS

A payment bond guarantees the owner that subcontractors and suppliers will be paid the monies that they are due from the principal. The owner is the obligee; the “beneficiaries” of the bond are the subcontractors and suppliers. Both the obligee and the beneficiaries may sue on the bond. An owner benefits indirectly from a payment bond in that the subcontractors and suppliers are assured of payment and will continue performance. On a private project, the owner may also benefit by providing subcontractors and suppliers a substitute to mechanics’ liens. If the principal fails to pay the subcontractors or suppliers, they may collect from the principal or surety under the payment bond, up to the penal sum of the bond. Payments under the bond will deplete the penal sum. The penal sum in a payment bond is often less than the total amount of the prime contract, and is intended to cover anticipated subcontractor and supplier costs.

JW Surety Bonds offers performance bonds for small to large contractors throughout the country. Get a free quote using our online applications.

Bryant Surety Bonds provides free quotes for performance bonds based on personal credit for small contractors and competitive for medium to large contractors.

SURETY BOND REQUIREMENTS ON FEDERAL PROJECTS MILLER ACT AND FAR REQUIREMENTS

The Miller Act, 40 U.S.C. §§ 270a-270f, provides that all federal construction contracts performed in the United States must require the contractor to furnish a performance bond in an amount satisfactory to the contracting officer; a payment bond in a penal sum of up to $2.5 million, and other surety bonds as well. In the Federal Acquisition Streamlining Act of 1994, Congress made the Miller Act inapplicable to contracts under $100,000, and directed agencies to develop alternatives to surety bonds for contracts between $25,000 and $100,000. These statutory requirements are implemented in FAR part 28, bonds and insurance. You can get a good introduction to the language and purposes of surety bonds simply by reading FAR part 28.

BID BONDS

A bid guarantee is required on federal projects whenever a performance bond and/or a payment bond is mandated. Bid guarantees usually are in the form of bid bonds, but on federal projects they may also be submitted as a postal money order, certified check, cashier’s check or an irrevocable letter of credit. A bid guarantee must be in an amount equal to at least twenty percent of the bid price; the maximum amount is $3 million. The standard solicitation provision requiring bid guarantees says that if the contractor awarded the contract fails or refuses to execute all contractually required documents, the agency may terminate the contract for default. In such a case, the agency will make a demand on the bid bond or bid guarantee to offset the difference in price between that bid and the next lowest bid. Bid bonds and bid guarantees are returned to unsuccessful bidders after bids are opened; bid guarantees are returned to the successful bidder after all contractually required documents and bonds are executed.

PERFORMANCE BONDS

As amended by the FASA, the Miller Act requires payment bonds and performance bonds for all federal contracts over $100,000. The penal amount of the performance bond is generally one hundred percent of the contract amount, and the penal sum is generally increased for each change order. The surety is entitled to receive information from the contracting officer concerning the progress of the work, payments, and estimated percentages of completion whenever it so requests in writing. The form of the Miller Act performance bond is set out at FAR 53.301-25.

PAYMENT BONDS

Payment bonds are now required for all federal construction contracts over $100,000. The penal amount of the payment bond is required to be a maximum of $2.5 million where the contract price is more than $5 million; for contracts less than $5 million, the penal sum of the payment bond is to be forty to fifty percent of the contract price. Each solicitation must state that a payment bond and performance bond are required, the penal amount required for the bonds, and the deadline by which bonds must be submitted after contract award. The form for a Miller Act payment bond is at FAR 53.301-25-A. The bond form does not set out any time limitations for claims against the bond. However, the Miller Act provides that suits against a payment bond must be brought within one year after the date on which the last of the labor was performed or material was supplied. In addition, the Miller Act requires that second-tier subcontractors and others who do not have a direct contract with the prime contractor submit a written notice of their claim to the prime contractor with ninety days of the last date of their work on the project.

REQUIREMENTS FOR QUALIFIED SURETIES

Federal surety bond requirements may be met in three ways: surety bonds issued by an approved corporate surety; surety bonds issued by an individual surety who pledges certain defined types of assets; or by the contractor pledging assets directly. The third option is uncommon.

REQUIREMENTS FOR INDIVIDUAL SURETIES

Individuals may act as sureties to satisfy bonding requirements on federal projects if they have certain acceptable assets in the required amounts to support the bonds. Although federal agencies probably would prefer to deal only with approved corporate sureties, allowance for individual sureties may enhance competition by allowing awards to contractors that might not otherwise qualify to obtain bonds from an approved corporate surety.

To support bonds issued by individual sureties, agencies may only accept cash, readily marketable assets, or irrevocable letters of credit from a federally insured financial institution. Acceptable assets include cash, certificates of deposit or other cash equivalents; U.S. agency securities (valued at current market value); stocks and bonds traded on the New York, American and certain other exchanges, valued at ninety percent of their current 52-week low price; real property owned outright in fee simple, valued at one hundred percent of its current tax assessment value; and irrevocable letters of credit issued by federally insured financial institutions. Examples of unacceptable assets are also listed in the regulations. Unacceptable assets are those that may be difficult to liquidate (e.g., a life estate in real property); are of uncertain or greatly fluctuating value (e.g., jewelry); property commonly exempt from attachment under state laws (e.g., the individual surety’s home); or commonly pledged to others (e.g., plant and equipment). An individual surety is required to submit an affidavit, in which the surety identifies the assets, the market value of the assets, and all encumbrances on the assets. The affidavit must also identify all other bonds issued by the individual surety within the last three years.

TREASURY LIST OF APPROVED CORPORATE SURETIES

By far the most common means of satisfying federal bonding requirements is by a bond issued by a corporate surety. The Department of the Treasury maintains a list of corporate sureties approved to issue bonds for federal projects, Treasury Department Circular 570. Copies may be obtained from the agency. The circular also is posted in the Treasury’s computerized bulletin board at (202) 874-6817, and on Treasury’s Web site at http://www.ustreas.gov/. Whenever a new corporate surety is added to the approved list, a notice is published in the Federal Register. Contracting officers are prohibited from accepting surety bonds issued by corporate sureties not listed in Treasury Circular 570. The circular lists the name and address of each approved surety and all states where each surety is licensed.

When approving corporate sureties, Treasury makes a determination as to the financial strength of the surety, and sets an underwriting limit, commonly called a bonding limit. The bonding limit is also stated in Circular 570. When an approved surety offers a bond on a federal project, the contracting officer checks to make sure that the surety has not exceeded the surety’s bonding limit. Because of these underwriting limits, surety bonds on very large construction projects, valued in the hundreds of millions of dollars, frequently are issued by several different approved surety companies, acting as co-sureties. The name of each co-surety will appear on the bond, along with its individual limit of liability.

Another way surety companies can stay within their approved surety underwriting limit, and spread their risk, is to obtain coinsurance or reinsurance, in which they essentially obtain a contract from another surety company to cover part of their risk on the bond they have issued. When a surety obtains reinsurance for part of its risk under a Miller Act bond, it must submit to the contracting officer a reinsurance agreement for a Miller Act performance bond and a reinsurance agreement for a Miller Act payment bond. The terms of both reinsurance agreements are stipulated in the regulations.

SURETY BOND REQUIREMENTS ON STATE PROJECTS-“LITTLE MILLER ACTS”

Statutes in all fifty states and the District of Columbia require performance and payment bonds for state government construction contracts. These state statutes often are called “Little Miller Acts” because many of them are modeled after the federal Miller Act. Useful information is available from the National Association of Surety Bond Producers. A good discussion of these Little Miller Acts is in Federal Publication’s CONSTRUCTION BRIEFING, Little Miller Acts. A fairly recent summary listing of these state statutes, along with citations, is in Bednar, et al., CONSTRUCTION CONTRACTING, George Washington University (1991), at 1309a-1309r. We will not duplicate these discussions. Each state licenses sureties to issue bonds. The Little Miller Acts each require bonds by licensed sureties. You can identify sureties licensed in particular states by checking Circular 570 on the computer bulletin board and at Treasury’s World Wide Web site.

SURETY BOND REQUIREMENTS IN PRIVATE CONSTRUCTION PROJECTS

There obviously is a great variation among private construction owners and projects throughout the United States. Performance bonds and payment bonds are required by owners for most large construction projects. If the owner elects to require surety bonds, major issues for the owner to decide during project planning are:

WHAT BONDS SHOULD BE REQUIRED?

Performance bonds protect the owner from contractor default and delays, and these are important for commercial properties with fixed tenant availability dates. Payment bonds protect the property from mechanics’ liens, which might otherwise interfere with sale or refinancing of the property. Bid bonds, which generally address only the price-spread between the low and next to lowest bid price, serve a much narrower purpose. However, because of the expectations and requirements of the bid package, corporate sureties generally will issue bid bonds only to contractors who qualify for performance and payments bonds. Thus a requirement for a bid bond may help narrow the field of bidders to only those firms who can actually satisfy performance and payment bond requirements.

WHAT SURETY COMPANIES ARE ACCEPTABLE TO THE OWNER?
Since a surety bond essentially is a guarantee by the surety, the owner has an interest in deciding which sureties are acceptable. One means of identifying responsible sureties is to refer to the list of sureties approved in Circular 570.

WHO PAYS THE BOND PREMIUM?

Of course, the owner eventually pays all costs anticipated in the contractor’s bid, whether the project is fixed-price or is a cost-plus-fee arrangement. A private owner may want to provide separate reimbursement for the contractor’s bond premium cost when the bond is delivered to the owner. This procedure ensures that bonds actually are furnished.

SPECIFYING THE AMOUNT OF BONDS.

Premiums rise along with the penal sum of the bond, and the owner ultimately pays these costs in the contract price. Nonetheless, the owner has an interest in setting the bond penal sum high enough to provide the desired protection to the project. A fairly good guideline for setting penal sums is the FAR requirement discussed hereinabove. The penal sum for the performance bond should be one hundred percent of the original contract price, and the penal sum should be increased for each change order. The payment bond should be fifty percent of the contract price up to some fairly large maximum penal sum.

SURETY BOND PROVISIONS OF STANDARD FORM CONTRACTS

Popular form contracts for private construction projects, those published by the American Institute of Architects (AIA) and the Associated General Contractors of America (AGC), leave bonding requirements to the choice of the parties. Thus these forms do not provide much guidance in deciding the issues we have identified. The current AIA General Conditions merely provide that the owner may require bonds elsewhere in the contract documents and that the contractor must furnish copies of the bonds upon request to any bond beneficiary (e.g., subcontractors or suppliers). AIA Document A-201 also provides that compensation for construction change directives ordered by the owner shall include bond premiums for the extra work. AIA’s current owner-contractor agreement, AIA Document A-101, does not address surety bonds at all. AIA’s contractor-subcontractor agreement, AIA Document A-401, addresses bonding requirements in article 7 by leaving a blank area for the parties to add any bonding requirements.

The current AGC Standard Form for Construction Subcontract, also endorsed by the American Subcontractors Association and the Associated Specialty Contractors, addresses surety bonds in article 5. Paragraph 5.1 provides that copies of the contractor’s payment and performance bonds must be furnished to a subcontractor on request. Paragraph 5.2, “Subcontractor Bonds,” provides that if bonds are required from the subcontractor, the subcontractor shall be reimbursed for surety bond premiums in the first progress payment. Performance and payment bonds must be in the full amount of the subcontract price, unless otherwise stated.

PROVISIONS OF STANDARD AIA BOND FORMS

Private construction contracts rarely require particular bond language. Rather, they usually require bonds in a specified amount with a surety acceptable to the owner, general contractor or other obligee. The AIA’s bond forms, AIA Documents A-311 and A-312, are popular and instructive; thus their provisions merit a brief discussion.

AIA’s performance bond form, AIA Document 311, provides that the surety waives notice of change orders and extensions of time. It says that the owner is the only person who can sue to enforce the performance bond, and that any such suit must be brought within two years from the date final payment is due under the contract. It also provides, if the owner declares the contractor in default, that the surety shall either complete the contract or, if the owner elects, shall obtain bids so that the owner may contract directly with a completion contractor with the surety providing funds sufficient for completion.

AIA’s labor and material payment bond form, AIA Document A-311, is very similar to the Miller Act payment bond required for federal projects. It defines a “claimant” as a person or firm that has a direct contract with either the principal or a subcontractor to the principal. Thus in the typical case where the principal is the general contractor, claimants under AIA payment bonds are limited to subcontractors and suppliers who furnish labor and materials directly to the general contractor or directly to a subcontractor. Claimants are entitled to sue on the bond if they have not been paid within ninety days after the last day of their work on the contract. Claimants that do not have a direct contract with the principal (e.g., second-tier subcontractors) must give a written notice to the owner and the surety within ninety days of the last day of their work advising that the claimant has not been paid. Suits on the payment bond must be brought within one year of the principal’s last day of work on the project. (This is different from bonds under the Miller Act, which requires that suits be filed within one year of the claimant’s last day of work on the project.) Suits must be filed in a state or federal court for the county in which the project was located.

AIA’s combination performance bond and payment bond, AIA Document A-312, is similar to the separate bonds described above, but this one adds some additional provisions. The performance bond contains requirements that the owner give the surety written notice before declaring the contractor in default, and provides for a meeting of the parties within fifteen days of that notice to discuss performance. The performance bond also gives the surety the option of having its principal complete the project, notwithstanding the default, if the owner consents. This probably would be done with financing or other assistance contributed by the surety. The payment bond in AIA Document A-312 requires that claimants that do not have a direct contract with the principal take action in set time frames. Such a claimant must give written notice to the principal that it has not been paid; wait thirty days for the principal’s response, and then notify the surety in writing that it intends to make a claim on the bond. It also requires the surety, within forty-five days of such notice, to pay all undisputed amounts and to respond regarding any disputed amounts.

CONCLUSION

If the terminology of construction surety bonds is confusing at first, you may want to keep this guide as a reference. Surety bonds are required for most large construction projects in the United States and now more frequently they are required in other countries. Our next article will review the process of obtaining surety bonds, the choices contractors have among surety companies, and the agreements typically entered into between contractors and sureties when construction surety bonds are issued.

Questions on a performance bond? Get it answered for free on the Surety Bond Forums.
— Dan Donohue and George Thomas, Assistant Vice-President, Contract Surety Claims, Fireman’s Fund Insurance Company Copyright © 1996 Kilcullen, Wilson & Kilcullen. All rights reserved.

The Star Global Malaysian Forum - 24 October, 2007

corpbabes wrote:

Greetings! I stumbled across this website and thought it's really fantastic that people can discuss and get information here. I'm a newbie and I'm just wondering if anyone can help me. My question is : is there any statutory prescriptions in relation to warranty periods for construction works buildings, designs etc for theme park related works. Also what if personal injury and death, can warranty period and exclusion of liability help reduce liability ? I would be glad if someone can explain these issues to me. Thank you in anticipation.

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Ahvincent's Response

The statutory limit is normally six years. However, it can sometimes be extended to 12 years.

In the construction business some defects are latent i.e. it cannot be readily identified by a competent engineer for example concrete cancer which can take years to become evident.

In such cases the six years may start from the date that circumstances that could lead to a claim was first identified.

Exclusions can sometimes help but remember you cannot contract out of the law. You may exclude certain things but you definitely cannot exclude death or injury due to you negligence, error or omission.

In simple words you can have a sign on the front door to say "Enter at your own risk - no liability accepted." But if I was killed because you did not install the sign properly and it fell down and bang me on the head, you will be liable for damages. Or if your roller coaster ride fell off it's tracks due to poor maintenance or neglect than you can be sued for damages under the law of tort.

But having say all that - Yes, a limitation clause is good to have. It is better than nothing and gives your lawyers something to work with in the event of a claim.

However, the difficult thing in design and construction is "how to get the other party to agree and sign the contract that contains clauses that potentially decreases your liability. Unless that other fellow's lawyer cannot read.
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Nik Zafri's Response

corpbabes wrote:

Greetings! I stumbled across this website and thought it's really fantastic that people can discuss and get information here. I'm a newbie and I'm just wondering if anyone can help me.

Welcome corpbabes...that is why GMN is my first choice!

corpbabes wrote:

My question is : is there any statutory prescriptions in relation to warranty periods for construction works buildings, designs etc .

Depending on which stage that you're referring to - pre-construction, during construction and post construction? You see, different countries may adopt different practices, terminologies and timeframe. (which will affect the contract)

If you care to delve further in this very same topic, you will see that we've been discussing 'heavily' about Defect Liability Period, Warranty Period, Developer's Warranty etc. Try to have a look, probably it would help you and us further to understand the issue. (I'm sure you've heard the Govt is planning to revise and standardize these practices - but I'm unsure when)

corpbabes wrote:

for theme park related works

Or perhaps you may be referring to 'during the theme park already in operation - if so, which target group? 'the theme park workers?'? The theme park visitors? The 'entertainment machines'? (roller coaster, merry-go-round etc.)

corpbabes wrote:

Also what if personal injury and death, can warranty period and exclusion of liability help reduce liability ?

Again, depending on which stage...and as ahvincent said - something like- this case should be mentioned in the contract to avoid future ambiguity and 'conflict'.

corpbabes wrote:

I would be glad if someone can explain these issues to me. Thank you in anticipation.

Don't worry, GMN has a handful of helpful hands (3H)...ahvincent is definitely one of them...
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Response from corpbabes - 26/10/2007

Hello again!

Thanks so much for such prompt reply! Really appreciate it. I know my questions were not really specific and vague, hence Im trying to get more information regarding that before enquiring further.

Sorry for being so ignorant, coz Im really new in this field,Im just a pupil doing a research in this area. So forgive me if I sound so blur!

Im just wondering what happens if the defects occur after the warranty period, who will be liable and is there any legislations regarding this? As for the owner of the building for example, is his liability reduced if anything happens after the warranty period is over?

Also, can I give an anology: Say in a high rise building in genting, a disaster happen due to a design defect ; Contractually we exclude design defects and say construction defects, in death or personal injury, therefore can we say that in this scenario that the project owner be liable? What if we have designer and builder ... To what extent can we pass the buck to them?

Thanks in advance for all the assistance
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ahvincent wrote:

Your question is many questions in one. Without being specific it is very difficult to answer. Firstly, if you identify a defect after the defects liability period then you don't stand much of a chance of a successful claim. If I bought an apartment from you (the owner) and I identify a defect within the warranty period, of course I will sue you. The contract of sale is between me and you. It has nothing to do with the builder who may have designed and constructed the apartments. I, the buyer do not have a contract with the builder, the owner does. The builder does not owe me a duty. I did not hire him and neither did I pay him, so how can I hold him responsible. I can only sue the owner who sold me the faulty apartment. However, the owner may join the builder as a co-defendent on the basis that as a result of his (the builder's) negligence he is now being sued and the builder should be held responsible. I guess one of your questions is "the owner has stated in the contract that he is not responsible for design and construction faults" thus trying to avoid any liability. I am afraid that attempt will fail. I, as the buyer can expect that the apartment is "fit for it's intended purpose." So, regardless of what you the owner try to do you will still be liable. Remember what I said before "you cannot contract out of the law." The law of tort will be on my side (the buyer). I have every right to enjoy my purchase. If you sold me an apartment and the roof falls down in 6 months and the walls start to crumble and the floor starts to sink, I will ask the court "what did you sell me?" I tell the court that you the owner sold me a faulty product and I want my money back !!!. You did not sell me an apartment that is fit for it's intended purpose i.e. as a place of residence. I will strongly suggest that a good lawyer for the owner will not try to get out of it by simply denying liability because the case is so obvious. He, the owner can quickly run away, change his name and go into hiding or he will quickly join the designer and constructor as co-defendants and seek proportional liability. Anyway, your questions sounds very unethical by trying to pass the buck. Forget it !!! No lawyer worth his salt will let you get away with putting such irresponsible "get-out of jail free" clauses. The text books tell us that the law is fair. Therefore you can try to be smart and put in lots of sneaky clauses but since the law is potentially fair it will rule any unreasonable clauses to be null & void and find you liable. There are plenty of fish in the sea. I always advise my clients if the other party wants everything in their favour - walk away from the deal. You don't want to do business with such unreasonable people. Unless of course he makes you an offer too good to refuse. But again - nobody gives away something for nothing.

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Nik Zafri's response

Good one ahvincent!!

My turn :

corpbabes wrote:

Im just wondering what happens if the defects occur after the warranty period, who will be liable and is there any legislations regarding this? As for the owner of the building for example, is his liability reduced if anything happens after the warranty period is over?

That's why looking into SPA (sales and purchase agreement) is very important before signing them - (that goes to everyone..not only housebuyers but property buyers as well) we don't want to end up in sticky situations like this one. I BET no party (developers, builders, bankers, lawyers) would tell you of your RIGHTS (esp. implied ones) since their interest in ONLY to sell and attempted to their best 'intellectual' knowledge NOT to be accountable.

These parties make you look merely into the 'expressed' terms but somehow they failed or ignore/deny your rights to know the 'implied' ones.

One example - You may or may not know that even during DEFECT LIABILITY PERIOD (DFL), the purchaser/buyer has implied RIGHTS to know what's going on - otherwise, how would we know of the final quality? How 'd heck' CMGD or CF (they keep changing the terms - now they call it "Certificate of Fitness for Occupation (CFO) be issued on the first place and suddenly we buyers found out that we have been 'had' when 'leaks' are discovered in our so-called newly bought houses or buildings?

Here's another 'masterpiece' :

http://www.nst.com.my/Weekly/PropertyTimes/News/Viewpoint/20030305105233/Article/

The waiting game


Many house buyers complain of having to take over of vacant possession (VP) of their new houses when they are not ready for occupation.

One of the reasons for this is that prior to amendment, the Housing Developers Act allowed developers to hand over VP upon application for the Certificates of Fitness for Occupation (CF). Many developers exploited this tenet of the Act by rushing to hand over the properties the minute the architect declared “practical completion”.

Problems for buyers

The hand over of VP without a confirmed date for occupancy has created numerous problems for house buyers. First, the new owners would have to make all outstanding payments as stipulated in the Third Schedule of the Sale and Purchase Agreement (SPA) upon taking VP. Next, the 18-month defect liability period would start to run 14 days from the date of notification of the hand over of VP, and third, the buyers would have to take over the responsibility for the security of their properties.

This state of affairs is grossly unfair to buyers. Imagine not being able to stay in your property after you’ve made all the outstanding payments, including maintenance charges. And if you’re not able to stay in your house, how will you identify and rectify faults that may be caused by the developer? Supposing the CF is issued six months after you receive your keys; this means six months of the defect liability period would have been wasted. Another point is that if you cannot stay in your home, how can you prevent vandalism and theft of your fittings, short of hiring a security guard, which many cannot afford?

Besides these, the house Buyers Association has come across other complaints from buyers who have been shown CFs from other projects that have been presented as theirs or CFs with falsified endorsements! Some buyers have taken VP, only to find that the developers have financial difficulty in fulfilling their obligations to apply for the CF!

Developers’ responsibility

The application for CF is governed by the Building By-laws Act. As the name implies, the CF is an official document issued by the local authority to acknowledge that a building is safe for occupation.

It is the responsibility of the developer through its appointed qualified professionals, chiefly the architect, to make the application according to the Building By-laws and other conditions imposed by the appropriate authorities.

When complaints surface, both developers and the appropriate authorities point fingers at each other. As explained by Ministry of Housing and Local Government legal adviser Shamsulbahri bin Ibrahim, and advocate and solicitor Toong Gek Fong, in an article on the Malaysian Law Journal website (http://www.mlj.com.my/free/index.asp): “The crux of the problems relating to delay in issuance of CFO could be because:

1. The developer’s application for CFO is incomplete or not in compliance with all the requirements necessary for the issuance of CFO, resulting in the application being rejected by the appropriate authority. For instance, some developers fail to submit the Form E together with copies of all letters of clearance or approval (surat sokongan) from the relevant technical agencies, which are required by the appropriate authority for issuance of CFO, or

2. The delay or inefficiency of the appropriate authority issuing the CFO.”
To exonerate the local authorities from blame, the Ministry of Housing has issued directives to the effect that:
• All applications for CF submitted by developer are to be checked and confirmed to be in compliance with all requirements for issuance of CF before such applications shall be accepted by the appropriate authority;
• Upon acceptance of the Form E, the appropriate authority is to issue its written confirmation that the Form E submitted by the developer has been duly checked and accepted by the appropriate authority;
• Once such applications have been duly checked and accepted by the appropriate authority, the CF shall be issued or deemed to be issued within 14 days from the date such applications are accepted by the appropriate authority; and
• The appropriate authority will submit a written report/explanation to the Housing Ministry in respect of such cases where the CF is not issued within 14 days from the date the relevant application is accepted by the appropriate authority and in any other cases of undue delay in the issuance of the CF by the appropriate authority.

By-law 25 of the Uniform Building By-Laws 1984 was amended to provide for the issuance of the CF by the appropriate authority within 14 days from the date of acceptance of Form E, failing which the CF shall be deemed to be issued to the owner of the building.

Under the amended Housing Development Act, developers’ responsibility with regard to VP and the CF has been expanded to include the following:

1. Conditions for delivery of vacant possession
It must submit a supporting certificate signed by its architect certifying that the building has been duly constructed and completed in accordance with all relevant Acts, by-laws and regulations and that all conditions by the appropriate authority in respect of the CF have been duly complied with and a supporting letter of confirmation from the appropriate authority certifying that the Form E (the application form for CF) has been duly submitted by the developer and checked and accepted by the appropriate authority.

• Duties to the Controller of Housing:
It must inform the Controller of the handing over of VP to the buyers and submit a certified true copy of the architect’s completion certificate and that water and electricity supply are ready for connection. It must also inform the Controller if the appropriate authority has refused to accept the submission of any document relating to the issuance of the CF and submit the refusal letter from the appropriate authority.

With the amendments to the Housing Development Act and the Building By-laws, it would seem that when house buyers receive notice of hand over of VP, they can assume safely that the occupancy of the property can be confirmed within 28 days of the notice. If not, the hand over of vacant possession can be considered premature, and the house buyer has every right to challenge the notice and asked the developer to withdraw it.

With the amendments too, the HBA sees no cause for local authorities to issue temporary certificates of fitness as it is not to the house buyers’ advantage to occupy a home based on such a certificate.

We hope the Ministry of Housing is confident enough to implement further amendments of the Act, such as imposing that the delivery of VP comes with the CF. It is only right that a buyer should be able to take vacant possession of a home that is certified fit for occupation.

The National House Buyers Association is a non-profit, non-governmental, non-political organisation manned by volunteers. Our website is www.hba.org.my. E mail: info@hba.org.my

- Property Times 1st March 2003 issue -

Which also may shed the light on your next analogy

Corpbabes : Also, can I give an anology: Say in a high rise building in genting, a disaster happen due to a design defect ; Contractually we exclude design defects and say construction defects, in death or personal injury, therefore can we say that in this scenario that the project owner be liable? What if we have designer and builder ... To what extent can we pass the buck to them?

Perhaps I didn't understand the question. But somehow, I doubt that this clause (design defect) is excluded in the contract - again depending on which stage you're talking about but typically in the 'design and build' mode, it's very irregular if a contract exclude such clause cos' it is regulated in Uniformity Building By-Laws 1984 (+ The Engineers Act as well) Even if there is NO such clause, the law prevails over 'deficiency' of such clause in a contract.

Remember, when a contract doesn't favour the law (where the latter being the former's umbrella), then the law shall prevail - e.g. clause ambiguity, or 'something that should be included but excluded - yet the law states clearly that it should be included'

But alas, despite of my explanation here, you should know that ahvincent is talking about the 'ugly REALITY of the construction industry' (which I must admit..it's TRUE) and you should take his suggestions into account as well.

and corpbabes (what's your real name..or at least a short one) - don't have to apologise profusely or being humble, you should be proud to pose such difficult question amidst a topic that not many want to be participating

Corpbabes further posted :

First of all, thanks ahvincent and nik zafri for explaining patiently to the issue that i have put forth. Dont worry, I understand the ethical issues that arise, but theoretically, i still have to see things from every issue so that i can write a good research on it.

After taking everything both ahvincent and nik said, correct me if im wrong, but does it mean that during the warranty period, in the event of personal injury and death, the owner wont be fully liable, but he can bring in, say the developer etc as contributory negligent? but after the warranty period, it would be difficult to make the owner liable for any defects that comes up?

Further, on the same thread, can we then exclude design liability? It may take years to discover the defects, but say, from the owner's point of view, can we exclude liability still by contract and also contractually exclude tort after the warranty period is over?

re there any statutory prescriptions in relation to warranty periods for construction works that i spoke about in my first post, nik, you said that would depend on which stage that i'm referring to - pre-construction, during construction and post construction? May i know if there is any statutory prescriptions for all stages of construction?

Many thanks in advance.

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nikzafri's reponse

Let me try : (I’m trying only maaah - so corpbabes – take the following as my personal views…as I may be right and I may be wrong..all is based on experience - and you must excuse me..some of your questions may not be answered - not that I don't know - and I'm sorry)

1. “during the warranty period, in the event of personal injury and death, the owner won’t be fully liable, but he can bring in, say the developer etc as contributory negligent? but after the warranty period, it would be difficult to make the owner liable for any defects that comes up?”

2. “Further, on the same thread, can we then exclude design liability? It may take years to discover the defects, but say, from the owner's point of view, can we exclude liability still by contract and also contractually exclude tort after the warranty period is over?”

No. 1 - I’m sure you remember the Highland Towers Case? It was WAY after the warranty period itself BUT the designer was still being summoned by court.

http://www.lawyerment.com.my/library/doc/laws/casecode/jdgm/11082000-01-1.shtml

Within this civil suit, you can clearly see the consultant (design) consortium (defendants) was still being called to defend itself (not necessarily being charged if proven that the onus of liability is not due to his design)

So, when a case happen, it will relate to one process to another and will start from the Design/Planning stage itself.

Of course, in the process, if the designer will argue to prove that it may or may have nothing to do with his/her design - with sufficient evidence substantiating his/her testimony – if the court is OK with it, then definitely the developer would be the NEXT target (contract may be referred to)

In this stage, probably the answer/onus may lie on the developer or the contractor. Certain things like ‘approving and/or making unlawful (design) deviation’ not according to the ‘approved design brief/specifications/drawings/plans’ or ‘using low-quality materials’ etc. etc. may come into the picture.

It depends really on how the court handle the case judging by evidence submitted. You'll be surprised that the outcome may be a LOT different that what I've said here.

But, I personally think, despite that the owner said that he can bring the developer according to the contractual obligation; yet; by right, being the owner, he should know what’s happening right from the start to the end of the project .

Back to the ‘ugly reality’ the owner would usually ‘wash his hands’ and PUT other parties responsible for the ‘failure’ just because he has all the money but he doesn’t have the experience!

But he should remember that he’s the one who was responsible for appointing the developers (if not himself IS the developer) plus agreeing to the appointment of design consultants (in turnkey/design and build environment). So it would be more effective if the owner IS a technically competent person by qualifications/and/or experience.

When it comes to court’s judgement, it’s very complex to determine ‘who is wrong for what’ as the process of the law is a bit different…too many factors to be considered. Sometimes, the law doesn’t state clearly or citing the examples but there are supporting elements that can be deemed as legal – for example, standards and codes of practice regarding design.

In another situation, the right people you should also be asking would the insurance company on construction insurance – I do not know much about this one but I do know one thing, construction insurance can sometime NOT cover a ‘prototype technology/design’ without any technical documentation, codes of practice/standard, method statements, research etc. to prove that the design is SAFE even after the warranty period. So try the insurance company…

Apart from Insurance, you should also try to pose the question to these ‘guys’ who I considered ‘my e-associates’ as well :

http://pmimy.org/modules/newbb/viewtopic.php?topic_id=90&forum=2

Nevertheless, You should take this into account as well -.every warranty period has an ‘expiry date’. In some countries, 20 years is sometimes considered ‘dilapidated’, ‘unsafe’ and possibly ‘condemned’. Notice is given and legal action can be taken…

No. 2 – It really depends on the case we’re talking about, how severe the case would be. Usually design liability cannot be excluded even after the warranty period typically ‘in the event of ‘total design or major design failure’ (I’m unsure of personal injury and death – but in Highland Towers – the main focus was the design failure as it involved ‘total structure collapse’ as the 'cause' – then, followed by 'personal injury and death' as the effect - even the effect was associated to legal action taken by immediate family of the deceased..if not, probably there would be no case)

Of course, I’m not referring in view to discover defects related to design after many years of project completion, it wouldn’t be practical (we can’t dismantle or hack what is already being installed and used)

What I’m referring to is actually the documentation/data/forms/supervision during all stages of construction including design data/calculation, design amendment procedures, inspection and testing ,construction methodology/method statements etc. as this should be ‘archived’ safely during the post-construction stage (final accounts) – usually kept by all parties – the client, the developer cum the consultants + the contractor. (again, some data could already be destroyed due to record retention policy...hmmm difficult isn't it?)

Thus, from these documentation/data, we can ‘go back in time’, detect any possible deficiency/how the corrective/preventive actions being taken (right or wrong way)

On the question of whether there is such prescription of statutory, I think my answer has been given in ‘BOLD’ abovementioned. That’s why we have contracts, codes of practice, design coordination, method statements, inspection and test plans etc. – these documentation serve as the professional justifications to the law itself and to assist implementation of the law. Again I would reiterate - in any case..the law prevails.

(Which law? you can easily buy them - 3 titles recommended - Contract Law, Uniformity Building ByLaw and the Engineer's Act)

And YES, (again this is my personal view) it SHOULD be covering ALL STAGES of construction as design is not only during pre-construction – despite being approved – they are still subject to amendment and revision – why? Because of the application based on the actual site condition – there will still be deviations even during and after the construction. (But I’m not implying that the law mention all these very clearly) – Contracts are originally about ‘proclamation of I trust you and vice versa’ and they should be ‘referred’ to the law.

Here’s another unique case you should be looking into :

http://www.contractjournal.com/Articles/2007/01/31/53440/questions-of-law-and-design-liability.html

But alas, there are too many arguments on the subject that you’ve asked. I’m not surprised if some quarters may argue my opinion..so regard what I’ve said here as ‘personal views’ and not representing anyone or any party.