13 ADVANCE PAYMENT

Advance payments are interest-free loans to the Contractor to enable him bet-

ter to mobilise and get the project works under way. They may be (and often

are) made in instalments, or as a single payment.

In the two Books, the Employer must make an advance payment where at

least the total amount of such a payment is specified in the contract; where a

Statement under clause 14.3 is provided; and where the Contractor has fur-

nished the performance security and an advance payment guarantee (in order

to secure the payment).

The amount of the advance is then to be repaid by the Contractor through

proportional deductions from interim payments (if Silver Book) or interim

payment certificates (if Yellow). The advance must be fully repaid before the

issue of the Taking Over Certificate, otherwise the whole of the balance out-

standing upon issue of that Certificate shall immediately become due for

repayment.

As the advance is repaid, the amount of the advance payment security

should be reduced accordingly.