The correct answer is D.
Mobilization advance is a payment made to a contractor before the start of work on a construction project. It is used to cover the costs of mobilization, which are the costs associated with getting the project started, such as the cost of hiring staff, purchasing materials, and renting equipment.
The mobilization advance is typically 10% of the total cost of the project. It is usually paid in installments, with the first installment being paid after the contract is signed and the second installment being paid after the contractor has completed the mobilization activities.
The mobilization advance is a form of security for the owner. It ensures that the contractor will have the resources to start the project and that they will not abandon the project after they have been paid the mobilization advance.
The mobilization advance is also a form of incentive for the contractor. It encourages the contractor to start the project as soon as possible and to complete it on time and within budget.
Here is a brief explanation of each option:
A. On commencement of work at site for payment of loan taken by him
This is not the correct answer because the mobilization advance is not used to pay for loans taken by the contractor. It is used to cover the costs of mobilization, which are the costs associated with getting the project started.
B. For the purchase of construction materials
This is not the correct answer because the mobilization advance is not used to purchase construction materials. It is used to cover the costs of mobilization, which are the costs associated with getting the project started.
C. For the payment of advances to labour and other staff
This is not the correct answer because the mobilization advance is not used to pay advances to labor and other staff. It is used to cover the costs of mobilization, which are the costs associated with getting the project started.
D. For all activities required to start the work at site on finalization of the contract document
This is the correct answer because the mobilization advance is used to cover all activities required to start the work at site on finalization of the contract document. These activities include the cost of hiring staff, purchasing materials, and renting equipment.