If the duration of an activity is extended as a result of a compensation event, is payment for that activity effectively delayed until the activity is complete?
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As the contract is written, ‘Yes’ !
Having said this, many PM’s relax this to some extent if the delay is clearly a result of a CE.
Jon is correct, but if the PM is not so pragmatic/relaxed then if there is a big delay to completing an element of works you could consider a revised Activity Schedule which splits this item into two. The first element could then be paid, and the remaining element pad after the compensation event is completed. The PM would have no reason not to accept a revised activity schedule providing it is in line with programme, adds up to correct amount and costs are evenly distributed.