Mobilisation Advance

A mobilisation advance is a sum paid by the employer to the contractor early in the contract to fund site establishment, mobilisation of plant, labour camps and initial procurement before substantial work (and hence running-bill income) begins. It eases the contractor's front-loaded cash-flow burden and supports timely start-up on large projects; it is a financing facility, not extra payment.

In Indian public-works practice (CPWD/PWD/NHAI/GFR norms) it is typically a defined percentage of the contract value (often around 5–10%, sometimes split into plant and general advances), secured by an unconditional bank guarantee for the full advance, frequently interest-bearing, and recovered by pre-defined deductions from running-account bills so it is fully repaid before a stated stage of completion. Tight administration — adequate BG cover, the agreed recovery schedule, and ensuring the advance is actually used for mobilisation — is essential, as advances inadequately secured or recovered are a recognised audit and financial-risk concern.