Gamsberg Phase II, Contract Template Review

Discussion Notes between Action By

Page Clause Sub-clause Content 14July2022 CITIC Comments BMM/TCE/CITIC/Onshore
Dt. 15-07-2022

1.DEFINITIONS AND
8 1.1. Definitions
INTERPRETATION
“Effective Date” shall mean date of signature of “Effective Date” shall mean date of Effective Date shall be the date of issuance of CITIC to confirm
Effective Date this Contract by the Party signing it last in time. advance payment received Contract / Letter of Award with all necessary
terms and conditions of contract.

Owner will have the option to extend the
Completion Date on the same terms and
conditions as specified in this Contract (as
elected by Owner) through the delivery of notice,
in writing, to Contractor no later than 30 days
before the Completion Date.
4. PROJECT SCHEDULING,
15 INFORMATION AND 4.2.3
PROGRESS REPORTS
Owner will have the option to extend the The original clause is acceptable provided
Completion Date on the same terms and CITIC concern for suspension is covered.
conditions as specified in this Contract
(as elected by Owner) through the
delivery of notice, in writing, to Contractor
no later than 90 days before the
Completion Date.
…
Add below wording:
The Owner should effect the payment of
the value of Equipment/Materials (as at
the date of extension) to the Contractor
within 2 weeks if the owner extend the
Completion Date for more than 28
days.The Contractor shall also be entitled
to payment of storage and management
fee.

Except as otherwise provided in the Contract, Except as otherwise provided in the 10 calander days is agreed as the turnaround
within 14 (fourteen) days of receipt of any Contract, within 7 (seven) days of receipt time.
5.2 Owner’s drawing or document required to be submitted to of any drawing or document required to
Approval him for approval under the Contract…… be submitted to him for approval under
the Contract
The Contractor shall, within14 (fourteen) days of The Contractor shall, within 7 (seven) 10 calander days is agreed as the turnaround
the Owner’s notification of disapproval thereof days of the Owner’s notification of time.
17 5.2.2 along with any comments or queries on any disapproval thereof along with any
drawing and document…… comments or queries on any drawing and
document……
5.1.7 Original clause accepted
The Owner shall use all reasonable endeavours The Owner shall use all reasonable 10 calander days is agreed
5.3 Contractor not to give or refuse such approval within 14 endeavours to give or refuse such
17
to Deviate (fourteen) days. approval within 7 (seven) days.
Owner’s Rights to Copy, Use and Reproduce Revise the wording as: Accepted
Drawings and Documents Owner’s Right’s to Use the Drawings and
The Owner is allowed to copy, use and Documents
reproduce all designs, drawings, models, plans,All drawings, operating and maintenance
specifications, design details, photographs, CAD
manuals, designs, software (including
materials and any other materials supplied by updates and new versions), plans,
the Contractor in connection with the Works forrecords, instructions, know-how, prints
the completion, remanufacturing, modification, and specifications which are furnished to
repair, maintenance and use of the Works. the Buyer in connection with the work to
be performed under this Contract shall
remain the exclusive property of Seller (or
5.6 Owner’s Rights its third party supplier, if applicable) and
to Copy, Use and are granted to the Buyer only for use in
17 Reproduce constructing, operating and maintaining
Drawings and the Equipment sold hereunder and the
Documents Buyer shall not use or permit the use of
any of them for any other purpose without
Seller’s prior written consent. Except as
provided for in the foregoing the Buyer
may not reproduce, license or sub-
license, copy or publish, or permit
reproduction, copying or publication of
the above documents or transfer or
relocate software without Seller’s prior
written consent, but shall take all
necessary precautions to avoid such
occurrence. The both parties shall keep
7. OBLIGATIONS OF confidentialPeriod”
“Warranty Period” shall be a period of 12 months “Warranty all technical information,
shall be 12 monthsdata “Warranty Period” shall be 12 months after CITIC to confirm
PARTIES from the date of successful completion of and
afterother disclosures
start-up supplied
of the mills by the
or 18 months start-up of the mills or 24 months after FOB
19 7.2 Performance Acceptance as certified by the otherFOB
after partydelivery,
in connection with the
whichever supply
comes first. delivery, whichever comes first.
Owner in respect of the whole of the Works…... of the Equipment in so far as the same
are of a confidential nature.
The Performance Bank Guarantee shall be The Performance Bank Guarantee shall CITIC will issue two BGs. First one is 10% PBG
provided by the Contractor promptly following, be provided by the Contractor promptly valid till Performance Guarantee test and the
the earlier of, execution of the Contract or following, the earlier of, execution of the next BG for 10% validity till defect liability
issuance of any letter of award to the Contractor Contract or issuance of any letter of period. The timelines for PG test from FOB will
and shall be valid till 60 (sixty) days from the award to the Contractor and shall be valid be conveyed to CITIC. CITIC has agreed
7.3 expiry of the Warranty Period. till 30 (thirty) days from the expiry of the however the percentage of Retention BG shall
Warranty Period.from the date of FOB be discussed and concluded shortly.
delivery.

12. WARRANTY 12.4 Claims for Not Applicable Accepted

23
Business Loss
Not Applicable BMM can accept best Latent defect period for 2
12.9 Latent Defects years. CITIC to revert..

13. SUSPENSION Add below wording: CITIC comments accepted

The Owner should effect the payment of
the value of Equipment/Materials (as at
the date of extension) to the Contractor
within 2 weeks.The Contractor shall also
13.1 Suspension be entitled to payment of storage and
24
without Cause management fee.

15. CHANGE IN LAW The Contractor and the Subcontractors shall use The Contractor and the Subcontractors CITIC comments accepted
its best endeavors to obtain any exemption from shall use its best endeavors to provide
25 15.2.1 payment…… reasonable assistance for owner to obtain
any exemption from payment……

The Contractor shall obtain an essentiality
certificate from respective Government Authority,
wherever so required, for all Contractor’s
Equipment for which such a certificate is
required. All costs associated with obtaining
15.2.2 such a certificate shall be borne by the
Contractor.
The Contractor shall provide the CITIC comments accepted
resonable assistance for owner to obtain
an essentiality certificate from respective
Government Authority, wherever so
required, for all Contractor’s Equipment
for which such a certificate is required. All
costs associated with obtaining such a
certificate shall be borne by the
Contractor.

The documents required to obtain an essentiality
certificate include the relevant commercial
invoice, CIF value, airway bill/original bill of
lading and a technical report on the relevant item
of Contractor’s Equipment. The Contractor shall
15.2.3 provide those documents with such application
for an essentiality certificate.
The documents required to obtain an CITIC comments accepted
essentiality certificate include the relevant
commercial invoice, CIF value, airway
bill/original bill of lading and a technical
report packing list on the relevant item of
Contractor’s Equipment. The Contractor
shall provide those documents with such
to the owner for application for an
essentiality certificate.

15.2.4 Not Applicable Agreed

15.2.5 Not Applicable Agreed
26 16. PAYMENT 16.1 Invoices The invoice shall be in duplicate The invoice shall be in electronic Agreed
 Not applicable BMM to revert BMM to revert
We understand this is for Local South
16.1.2 Africa Company

The Owner shall make payment within 30 days Add below wording: The advance payment shall be paid within 15
of its receipt of a correct and agreed invoice The advance payment shall be paid days of the receipt of invoice against the
16.1.5 submitted pursuant to Clause 16.1.1 (Invoices) within 7 days of the receipt of invoice Contract.
to the Contractor's nominated bank account as against the Contract.
notified in writing to the Owner.
Notwithstanding any other provisions of the Notwithstanding any other provisions of CITIC to provide a copy of Insurance coverage
Contract, no payments due to the Contractor by the Contract, no progress payments due at their works covering their workmen , work in
the Owner under the Contract shall be payable to the Contractor by the Owner under the progress and property etc.
by the Owner to the Contractor until the copies of Contract shall be payable by the Owner Also insurance coverage document to be
16.1.6 the certificates of insurance referred to in to the Contractor until the copies of the provided for their supervisory staff deputed to
Schedule 16 (Insurance) of these General Terms certificates of insurance referred to in Project Site.
& Condition of Contract and the Performance Schedule 16 (Insurance) of these
Bank Guarantee have been delivered to the General Terms & Condition of Contract
Owner. and the
Invoice and the Performance Bank
the Owner makes payment of any undisputed the Owner makes
Guarantee payment
have been of any
delivered to the CITIC comments accepted
portion of the invoice and notifies the Contractor undisputed
Owner. portion of the invoice and
16.2 Owner's Right in writing of the disputed item(s) within 30 (thirty) notifies the Contractor in writing of the
27
to Dispute Invoices days of receipt of the relevant invoice; and disputed item(s) within 7 (seven) days of
receipt of the relevant invoice; and
17. CONTRACTOR’S The Contractor shall be required to ensure that The Contractor shall be required to CITIC comments accepted
INSURANCE the Owner and its lenders are designated as ensure that the Owner and its lenders are
28 additional insured under the insurance policies is designated as additional insured under
obtained under the Contract. the insurance policies obtained under the
Contract.
21. PERMITS, LAWS AND The Contractor shall be responsible for obtaining The Contractor shall be responsible for CITIC comments accepted
REGULATIONS all import permits and other licences required for obtaining all import export permits and
the importation of any Plant and Equipment. The other licences required for the importation
Contractor shall be responsible within the exportation of any Plant and Equipment.
Contract Price for obtaining all import permits The Contractor shall be responsible
and other licences required for the importation of within the Contract Price for obtaining all
30 21.3 Contractor’s Equipment or other goods or import export permits and other licences
materials required for the purposes of the Works. required for the importation exportation of
Contractor’s Equipment or other goods or
materials required for the purposes of the
Works.

21.4 Not Applicable CITIC comments accepted

23. LIMITATION OF Contractor guarantees that it will achieve each Contractor guarantees that it will achieve Ex-Works can be accepted.
LIABILITY 23.3.1 Schedule Milestone by the relevant Milestone Date. each Milestone by the relevant Milestone
33 Date. the EXW delivery schedule
Guarantee
according to this Contract.
Contractor shall within 10 business days Contractor shall within 10 business 30 CITIC comments accepted.
following receipt of Notice from Owner days following receipt of Notice from Part Shipment milestones based on
demanding payment, pay to Owner the amounts Owner demanding payment, pay to construction sequence at site would be decided
23.3.2 Delay specified in Schedule 3 – Milestones, Milestone Owner the amounts specified in Schedule after signing of contract during kick off meeting.
Liquidated Dates and Liquidated Damages, together with 3 – Milestones, Milestone Dates and
Damages any applicable GST on such amounts…… Liquidated Damages, together with any
applicable GST VAT on such
amounts……

Owner will be entitled to withdraw the amount Owner will be entitled to withdraw the CITIC comments accepted
owing (together with any applicable GST on such amount owing (together with any
23.3.2(i) amount).3….. applicable GST VAT on such
amount).3…..
/ Add below wording: 100% - Limitation of Liability CITIC to confirm
The aggregate liability of Contractor to
34 23.3.5 the Owner for any reasons (other than
those excluded by statute) shall be
limited to 75% of the Contract value.
34 26. TAXES Revise GST to VAT CITIC comments accepted
30. ARBITRATION (ii) The language of the amicable settlement and (ii) The language of the amicable CITIC comments accepted
39 30.1 arbitration proceedings shall be English. The settlement and arbitration proceedings
seat and venue of arbitration shall be shall be English. The seat and venue of
Johannesburg, South Africa. arbitration shall be Johannesburg, South
35. SPECIAL TOOLS & SPECIAL TOOLS & TACKLES SPECIAL TOOLS
Africa London UK. & TACKLES CITIC comments accepted
41
TACKLES
The Contractor shall supply within the Contract The Contractor shall supply within the CITIC comments accepted
Price the special tools, tackles and appliances Contract Price the special tools, tackles
35.1 for erection and maintenance of the Plant and and appliances for erection and
Equipment. maintenance of the Plant and Equipment.

While preparing the list of special tools and
tackles, the Contractor shall include such
35.2 number of sets as he may recommend
necessary from his own experience.
The Contractor shall provide ordering
specification including the names of Contractors
and giving sufficient details of such special tools
35.3 and tackles enable the Owner to procure at a
later date when necessary.
While preparing the list of special tools CITIC comments accepted
and tackles, the Contractor shall include
such number of sets as he may
recommend necessary from his own
experience.
The Contractor shall provide ordering CITIC comments accepted
specification including the names of
Contractors and giving sufficient details of
such special tools and tackles enable the
Owner to procure at a later date when
necessary.

SCHEDULE 1 – if such new restrictions or requirements fully Please specify Clause 29 of ‘EPC Remove the word EPC.
ADDITIONAL CONDITIONS satisfy the requirements of Clause 29 of ‘EPC General Terms & Conditions“
46 b. General Terms & Conditions’….

SCHEDULE 3 – Provisional Acceptance = Cold and Hot
MILESTONES, MILESTONE Commissioning completed, Ready for Safe
DATES AND LIQUIDATED 2 Operation & First Product produced
DAMAGES Final Acceptance = Successful completion of
Performance Guarantee Tests
The milstone due date of provisional Part Shipment & Detailed milestones based on
acceptance and final acceptance are the construction sequence at site would be decided
responsibility of the Owner/EPC after signing of contract during kick off meeting.

a. XXXXX days/weeks/months from Effective
3. Delivery period Date of this Contract to achieve Provisional
Acceptance & First Product
b. XXXXX days/weeks/months from Effective
Date of this Contract for successful completion of
the Performance Guarantee Tests.
4. The Milestone Dates that are to be met to
ensure attainment of the key dates in clause 1
4.Milestone date above are as follows:
a. 40 weeks from Effective Date of this
Contract to achieve EXW delivery date.
Delete
Not Applicable
Onshore / BMM will only accept 34 weeks of CITIC to confirm
FOB delivery. CITIC will review and confirm.
Refer C16 - Performance Guarantee shall be
part of contract.
CITIC comments accepted
Part Shipment & Detailed milestones based on
construction sequence at site would be decided
after signing of contract during kick off meeting.

The Contractor is to submit a detailed Project 4. The Contractor is to submit a detailed The Contractor is to submit a detailed Project
Schedule, aligned to the Milestone Dates listed, Manufacturing Schedule. Schedule, aligned to the agreed Milestone
5 for approval of the Owner within 7 days of the Dates listed, within 7 days of the Effective Date.
Effective Date.

The supply of all equipment/items, 5. The supply of all equipment/items, CITIC comments accepted
6 commissioning spares shall be on [INSERT commissioning spares shall be on FOB
INCOTERMS BASIS] at XXXXXXXXXXXXXX, Liner terms at Port of Export
XX% (XX percent) of the Contract Price 5% (five percent) of the Contract Price 0.5% per week upto 7.5% (Max) CITIC to confirm

SCHEDULE 4 – 1. Contract Price Currency change to USD BMM to check and confirm BMM to revert
COMPENSATION 4.1 The Contractor shall be entitled to an 4.1 The Contractor shall be entitled to an BMM to review revert. CITIC to also review. BMM / CITIC to
Advance Payment of XX% (XX percent) of the Advance Payment of 15% (fifteen Final confirmation on payment terms to arrive revert.
4. Payment Terms Contract Price within 15 (fifteen) day…… percent) of the Contract Price within 7 based on joint agreement. Refer snap where
(seven) days of submission of an options are provided for review of CITIC / BMM.
Advance Payment Bank Guarantee.
 4.5 Provided that all documents (including a No-
Claim certificate and HR-Check list have been
submitted and its contents are in order and
4.5 approved by the Owner’s Representative……
4.5 Provided that all documents CITIC comments accepted
(including a No-Claim certificate and HR-
Check list have been submitted and its
contents are in order and approved by
the Owner’s Representative

SCHEDULE 7 – c) The Advance Payment Bank Guarantee shall c) The Advance Payment Bank c) The Advance Payment Bank Guarantee shall
UNCONDITIONAL 1. Advance be furnished within 14 (fourteen) Business Days Guarantee shall be furnished within 30 be furnished within 30 (Thirty) Business Days
UNDERTAKINGS Payment Guarantee from the Effective Date. (thirdy) Days from the Effective Date. from the Effective Date.

d) The Advance Payment Bank Guarantee shall
be valid up to 30 (thirty) days after the issue of
Preliminary Acceptance Certificate. In case any
extension is granted to the Contract, the validity
of the Advance Payment Bank Guarantee shall
be extended accordingly at the Contractor’s cost.
d) The Advance Payment Bank CITIC comments accepted
Guarantee shall be valid up to 30 (thirty)
days after the issue of Preliminary
Acceptance Certificate the date of FOB
delivery. In case any extension is granted
to the Contract, the validity of the
Advance Payment Bank Guarantee shall
be extended accordingly at the
Contractor’s cost.

h) The Performance Bank Guarantee shall be h) The Performance Bank Guarantee h) The Performance Bank Guarantee shall be
furnished, within 14 (fourteen) Business Days shall be furnished, within 30 (thirdy) Days furnished, within 30 (Thirty) Business Days
2. Performance
from the Effective Date. from the Effective Date. from the Effective Date.
Guarantee

i) The Performance Bank Guarantee shall be
valid up to 30 (thirty) days after the date of Final
Completion. In case any extension is granted to
the Contract, the validity of the Performance
Bank Guarantee shall be extended accordingly
at the Contractor’s cost.
i) The Performance Bank Guarantee shall Refer Above
be valid up to 30 (thirty) days after the
date of Final Completion the date of FOB
delivery. In case any extension is granted
to the Contract, the validity of the
Performance Bank Guarantee shall be
extended accordingly at the Contractor’s
cost.

The Performance Bank Gurantee shall be Refer Above

at the value of 5% (five percent) of the
Contract Price.

The Retention Bank Gurantee shall be at

the value of 5% (five percent) of the
Contract Price and valid in the warranty
period ( 12 months after commissioing or
18 month after FOB delivery, whichever
comes first.

ADVANCE BANK Refer to CITIC’s Standard Advance Bank BMM to revert.

GUARANTEE Guarantee format
PERFORMANCE Refer to CITIC’s Standard Performance BMM to revert.
BANK Bank Guarantee format
GUARANTEE
Refer to CITIC’s Standard Performance BMM to revert.
RETENTION BANK Bank Guarantee format
GUARANTEE
SCHEDULE 8 – 1. Performance Test and Final Completion Refer to Performance Guarantee in CITIC C16 - Performance Guarantee is included in
PERFORMANCE TEST FOR details Technical Proposal Option B of CITIC proposal. The same shall be
FINAL COMPLETION considered.
SCHEDULE 16 – 2.The policy/ies shall cover comprehensive risks 2.The policy/ies shall cover CITIC comments accepted
INSURANCE during transportation (Inland and/or Sea), comprehensive risks during
handling, storage, testing and commissioning. transportation (Inland and/or Sea),
handling, storage, testing and
commissioning, whichever applicable.

5. The Contractor shall, however, as a minimum, 5. The Contractor shall, however, as a CITIC comments accepted
provide (or, as the case may be, ensure that minimum, provide (or, as the case may
Subcontractors provide) the following be, ensure that Subcontractors provide)
insurances: the following insurances if applicable:

a) Contract Works Insurance: which will, in Not applicable as CITIC is only CITIC to provide a copy of Insurance coverage
accordance with and subject to the terms, limits, equipment supply, we are self insured at their works covering their workmen , work in
exceptions and conditions of the policy, provide during the manufacturing process. progress and property etc.
cover against accidental physical loss of or Also insurance coverage document to be
damage to the Works (including plant and 5 a) provided for their supervisory staff deputed to
materials to be handed over to the Owner and Project Site.
accordingly forming part of the Works) and
Temporary Works, which insurance shall include
the necessary interface between the contract
works and marine insurance. The insurance shall
be maintained from date of this Contract until the
Owner has issued a certificate for Final
Completion. The value of the insurance shall be
115% of the fully constructed value of the
Contract. All proceeds from an insurance claim
shall be paid directly to the Owner by the insurer,
and the Owner shall thereafter transfer the
balance of any amounts due to the Contractor.

d) SASRIA Special Risks Insurance: which will, Not applicable as CITIC is only CITIC to provide a copy of Insurance coverage
in accordance with and subject to the terms, equipment supply, we are self insured at their works covering their workmen , work in
limits, exceptions and conditions of the policy, during the manufacturing process. progress and property etc.
provide cover in respect of riot, strike and Also insurance coverage document to be
associated risks for damage to the Works provided for their supervisory staff deputed to
(including plant and materials to be handed over Project Site.
to the Owner and accordingly forming part of the
Works) and Temporary Works. The insurance
shall be maintained from date of this Contract
until the Owner has issued a certificate for Final
Completion.

SCHEDULE 17 PACKING, 5.0 PACKAGING 5.1.3 As equipment may be stored outdoors for If the equipment need to be stored on Sea-Worthy packing shall be ensured. CITIC
MARKING & SHIPPING an extended time, all packaging shall be site, the Contractor's instructions for comments accepted
INSTRUCTIONS designed and constructed such that their storage should be followed.
contents are protected in external, non-covered
storage at site for a minimum period of 12
months. Where additional preservation
measures as VPI’s or desiccants are required for
protection, they shall be capable of renewal after
12 months without harm to the contents.

5.0 PACKAGING 5.3.4 b All Instrument panels, instruments, 5.3.4 b All Instrument panels, Sea-Worthy packing shall be ensured. CITIC
electrical equipment, precision machinery and instruments, electrical equipment, comments accepted
control valves shall be packed in suitable precision machinery and control valves
wooden cases. They shall also be vacuum heat shall be packed in suitable wooden
sealed in a polythene barrier c/w sufficient silica cases. They shall afford protection for 12
gel to afford protection for 12 months. months in house.

Sea-Worthy packing shall be ensured. CITIC

The cargo shall be stuffed in 20 ft or 40 ft comments accepted
containers (dry, open top, flat racks).This
definition of containerization is valid for sea
containers.
9.0 The mills shall be delivered with bulk
CONTAINERISATI All categories of cargo can be shipped in shipment. Refer to reference packing list
ON containers. Since the container is not leak tight, by CITIC.
where pre-packing is not leak tight, packing in
contact with the bottom shall be raised in order
to prevent it from being damaged by
accumulations of water (on pallets, for example).
 This is to be dealt in line with Incoterms.
For CFR Shipment supplier need to take care on
following points
9.0
• 21 Days Free Period at Destination Port Not accepted, this should be handled by
CONTAINERISATI
• No Security deposit to be asked by shipping Owner side.
ON
line to OWNER while release of Delivery order to
OWNER / CHA nominated by OWNER.

SCHEDULE 18 - TERMS & CITIC’s standard terms and conditions for CITIC will review Schedule-18 and revert on CITIC to confirm
CONDITIONS FOR supervision in the proposal shall be any deviations / clarifications.
SUPERVISION OF followed. - Boarding / Lodging / Transportation / Air flight
ERECTION WORKS arrangement (economy) shall be arrangement
by CITIC. To be reimbursed by BMM at actuals.
CITIC to review phase-I arrangements and
revert.