Construction Contract
(Turbine Manufacturing Facilities)
Owner:
Wuhan Generating Equipment Co., Ltd.
Contractor:
Hubei Gongchuang Real Estate Co., Ltd.
Table of Contents
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1
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1.1
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Project
Name
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1
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1.2
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Project
Location
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1
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1.3
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Project
Summary
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1
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Chapter
2
Contracting Scope and Mode
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1
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2.1
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Scope
of the Project
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1
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2.2
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Contracting
Mode
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1
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Chapter
3
Construction Cost
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2
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3.1
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Basis
of Construction Cost
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2
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3.2
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Construction
Cost
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2
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Chapter
4
Installment Payments
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3
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4.1
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Installment
Payments
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3
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4.2
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Party
B’s Obligations Regarding Installment
Payments
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3
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Chapter
5 Time
Schedule for Project
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4
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5.1
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Time
Limit for Project
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4
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5.2
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Timetable
for Project
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4
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5.3
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Completion
Date Control
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4
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Chapter
6 Quality
Management
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5
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6.1
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Engineering
Quality
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5
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6.2
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Engineering
Acceptance
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5
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6.3
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Other
Quality Issues
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6
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Chapter
7 Site
Management
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6
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7.1
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Management
Responsibilities of Both Parties
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6
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7.2
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Management
Responsibilities of Party B
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6
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Chapter
8
Materials
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7
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8.1
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Materials
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7
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8.2
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Material
Supplied by Party A
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7
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Chapter
9 Design
Change
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7
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9.1
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Design
Change
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7
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9.2
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Change
to Cost and Time Limit
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8
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Chapter
10 Party
A’s Site Representative and Duties
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8
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10.1
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Party
A’s Site Representative
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8
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10.2
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Party
A’s Duties
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8
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Chapter
11 Supervision
Party’s Site Representative and Duties
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9
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11.1
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Supervision
Party’s Site Representative
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9
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11.2
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The
Chief Supervisor’s Duties
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9
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Chapter
12 Party
B’s Site Representative and Duties
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11
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12.1
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Party
B’s Site Representative
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11
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12.2
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Party
B’s Duties
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11
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Chapter
13 Completion,
Acceptance, and Transfer
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13
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13.1
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Completion
Acceptance Reference
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13
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13.2
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Completion
Acceptance Procedure
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13
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Chapter
14 Final
Settlement and Dispute Resolution
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13
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14.1
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Settlement
Price
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13
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14.2
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Dispute
Resolution
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14
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Chapter
15
Warranty
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14
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15.1
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Warranty
Scope and Content
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14
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15.2
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Warranty
Period
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14
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15.3
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Warranty
Responsibility
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15
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15.4
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Warranty
Retainer Payment
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15
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15.5
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Warranty
Breach
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15
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Chapter
16
Insurance
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15
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16.1
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Party
A’s Insurance
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15
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16.2
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Party
B’s Insurance
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16
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Chapter
17 Execution,
Discharge, and Termination
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16
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17.1
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Execution
and Discharge
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16
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17.2
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Termination
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16
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16
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18.1
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Miscellaneous
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16
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Construction Contract
THIS
CONTRACT FOR CONSTRUCTION (the “Contract”) is
entered into by and between WUHAN GENERATING EQUIPMENT CO.,
LTD. (“Party A”) and HUBEI GONGCHUANG REAL ESTATE
CO., LTD. (“Party B”), pursuant to the relevant
rules and regulations of The People’s Republic of
China’s Laws on Contracts and Construction, Hubei
Province’s Regulations on Construction, and the specific
terms as set forth in this Contract. Party A and Party B are
referred to herein collectively as the “Parties”
and individually as a “Party.” Both Parties have
reached an agreement on the project based on the principles of
trust and integrity and enter into this Contract on an equal,
voluntary, and fair basis.
Chapter 1
Construction Project
The
project shall be named the Workshop of Wuhan Generating
Equipment Co., Ltd.
The
project shall be located in Canglong Island, Science &
Technology Park, Jiangxia District, Wuhan.
The
summary of the project is as follows:
1.
The
construction area of the project shall be 19,872 square
meters.
2.
The
structure shall have a maximum span of 24 meters, 160t crane,
single-story bent frame.
3.
The
project shall consist of one story.
4.
The
building height shall be 26.7 meters.
Chapter 2
Contracting Scope and Mode
The
scope of the project shall include the steel structure,
decoration, and all the other projects (except for the fire
retardant paint, equipment installation, indoor terrace, and
electrical installation, which will be directly subcontracted
by Party A) within the scope of the construction drawings
approved by the Parties, the Design Institute affiliated with
Wuhan Science & Technology University, and the Wuhan
Drawing Review & Approval Office.
1.
Party
B shall carry out the project contracting and arrange
construction and installation of the project in accordance
with the construction drawings. Neither Party shall
subcontract the project, except as provided in this Contract.
The professional engineering, which must be subcontracted,
shall be approved in writing by Party A.
2.
The
color and type of tile, roof boarding, and peripheral
maintenance panel of the project shall match those from the
Phase I construction.
3.
The
Parties agree that Wuhan Yiye Steel Structure Co., Ltd. shall
be responsible for the processing and field installation of
the steel structure.
Chapter 3
Construction Cost
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3.1 |
Basis of Construction Cost
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The
Parties shall use the following d ocuments
to determine the construction cost:
1.
Construction Engineering Consumption Quote and Uniform Base Price
List of Hubei Province issued
in 2003 for the steel structure engineering.
2.
Decoration Engineering Consumption Quote and Uniform Base Price
List of Hubei Province issued
in 2003 for the decoration engineering.
3.
The
Hubei Construction [2003] No. 44 document for the expense
quote.
1.
For
the project, the total cost is calculated based on the
category-III engineering quote. The final settlement price of
the account will be this total cost less 5.5%.
2.
For
the price adjustment of materials, the price of all the
materials (including the main materials for the installation
engineering), except the general auxiliary material such as
sand and stone which is subject to the quote price, shall be
fixed upon the negotiation of both Parties as per the price
difference between the budget price of
Construction Engineering Consumption Quote and
Uniform Base Price List of Hubei Province (2003)
and
that of
Material Price Information of
Wuhan Quote Management Station for the same period. The above price
difference is only for the calculation of the pre-tax construction
price. However, it shall not be charged as cost.
3.
Party
A will not charge any other fees except the labor cost and
storage charge. The calculation formula for the labor cost and
storage charge is as follows: the construction price of the
materials supplied by Party A x 1.0%. The materials supplied
by Party A are not part of the project completion settlement
or a service fee and the settlement shall not be reduced by
this amount. Party A shall not be liable for any other
materials.
4.
Engineering
workload shall be calculated based on the actual cost. The
design change and on-site certification during the project can
be included in the project accounting only after they are
approved and signed by Party A and its supervisor. The on-site
certification shall not be included in the project accounting,
unless the on-site certification satisfies the following
conditions: description of project property, scope, scheme,
measure, clarification of engineering workload, material
specification, model, and brand.
5.
The
estimated price of the project shall be Eight Hundred Renminbi
(RMB 800) per square meter as per the area specified in the
construction drawings, and this price shall be deemed the
basis for the construction progress payment and not for the
settlement of construction cost.
Chapter 4
Installment Payments
1.
Party
A shall pay Forty Million Renminbi (RMB 40,000,000) as a
construction cost within the first two (2) months of the
execution of this Contract. Thereafter, Party A shall make
payments based on the progress of the project.
2.
After
Party B has constructed, delivered, and installed the steel
columns and crossbeams, Party A shall pay the progress payment
difference (based on the RMB 40,000,000 specified in
Section 4.1 )
for this portion of the project.
3.
Party
A’s payment shall be no less than 80% of the total
contract price (including the payment set forth in
Sections 4.1 and 4.2 )
after the completion, examination, and acceptance of the
project.
4.
After
a complete accounting of subcontracting projects, Party A
shall pay 85% of the settlement amount (including the payment
set forth in
Sections 4.1- 4.3 ).
5.
After
the project is registered for record, the project material is
transferred to the archives, and the complete set of
completion data and drawings is transferred to Party A, Party
A shall pay 10% of the total contract price. After the final
accounting, Party A agrees to pay Party B the construction
cost, however, the accumulated payment for the construction
cost (including payments set forth in
Sections 4.1- 4.4 )
shall be no more than 95% of the project settlement payment, and
the remaining 5% of the project settlement payment shall be
retained as a warranty.
6.
Party
A shall timely make the installment payments in accordance
with
Section 4.1 .
If an installment payment cannot be paid in time for any reason,
Party A shall pay as an overdue fine the current bank deposit
interest rate for that period.
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4.2 |
Party B’s Obligations Regarding Installment
Payments
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1.
Party
B shall provide the visual progress description of the
completed engineering workload to the supervisor and Party
A’s representative.
2.
Party
B shall prepare the progress budget report and the application
form for installment payment as per the confirmed visual
progress description and submit them to the supervisor and
on-site project department of Party A for review. The Finance
Department of Party A shall perform the final review and
approval and pay the installment payment of this portion to
Party B.
3.
The
installment payment for engineering progress shall depend on
the quality of work performed by Party B. If the engineering
quality does not meet the inspection and acceptance
requirements, Party A has the right to charge the penalty to
Party B and temporarily stop making payment for this portion
of the project.
Chapter 5
Time Schedule for Project
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5.1 |
Time Limit for Project
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1.
The
construction of the steel structure for the project shall
commence on the date of execution of this
Contract.
2.
A
condition of this Contract is that the steel columns must be
hoisted on site by March 28, 2007.
3.
Total
construction period for the project is ninety-eight (98)
calendar days. The total construction period shall remain
fixed. However, if the project cannot be completed within this
period, it may be delayed, but not for more than thirty (30)
days.
4.
Both
Party A and Party B have already taken into account such
factors as seasonal rain, high wind, high-temperature weather,
water, stops in the power supply, festivals, and holidays in
deciding the time limit for the project and the working
content to be subcontracted by Party A to meet this time
limit.
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5.2 |
Timetable
for Project
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1.
Within
the first week after Party B enters the worksite, Party B
shall report and submit the monthly progress plan and key
benchmarks of the project to Party A. The supervision company
and Party A shall review and approve such reports and
plans.
2.
Prior
to April 10, 2007, Party
B shall complete the
installation of steel columns and supports
thereof.
3.
Prior
to May 10, 2007, Party B shall complete the installation of
the colored steel plate, workshop gate, and plastic-steel
window.
4.
Prior
to July 6, 2007, Party B shall complete all contents described
in the construction drawings. Party A shall organize the
examination and acceptance of the project, and Party B shall
withdraw from the worksite.
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5.3 |
Completion
Date Control
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1.
The
completion date refers to the date on which all the contracted
projects and items agreed in this Contract have been completed
and passed the examination and acceptance organized by Party
A. Upon the examination organized by Party A, if any part of
the project or any subcontracted project is unfinished or
fails to meet qualifications, the time limit shall be
delayed.
2.
If
the completion date or control date is delayed due to a force
majeure, the time limit for the project shall be delayed after
approval by Party A. Party A shall be responsible for the
construction downtime fee.
3.
If
Party B fails to implement the timetable due to double time
periods, Party B shall leave the worksite within one (1) week.
Party A is entitled to terminate Party B, and Party A shall
not make final settlement of the account as per the actual
engineering workload until the project is completed. Party B
shall pay Party A 10% of the total cost of the project as the
penalty for breach of contract. However, this penalty shall
not apply if the breach is attributable to Party
A.
Chapter 6
Quality Management
The
project construction and acceptance shall be carried out as
per the construction drawings, design change, specification,
acceptance criteria, the relevant local regulations, and Party
A’s requirements. All portions and subdivisions of the
project shall meet the conformity standards. The completed
project in its entirety shall meet the conformity
standards.
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6.2 |
Engineering
Acceptance
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1.
Party
B shall assign enough qualified managing staff to the site,
establish a quality and progress assurance system, and make
any necessary corrections and adjustments as instructed by
Party A and the supervision party.
2.
Party
B shall carry out the construction as per the related codes
and design requirements and instructions from Party A and the
supervision party, allow inspection at any time, and make any
necessary corrections and adjustments as per the inspection
result. Within a reasonable time before the inspection, Party
B shall provide to Party A and the supervision party the
technical data related to the engineering
quality.
3.
If
portions or subdivisions of the project require subsurface
work and such units meet the requirements of Party B, Party B
shall inform Party A and the supervision party within
twenty-four (24) hours prior to their examination and
acceptance and provide the related compliance data. Party B
can place the units beneath the surface only after receiving
written approval from Party A and the supervision party.
During the process of placing the units beneath the surface,
any modification by Party B to the portion which has
passed the inspection shall be reinspected for acceptance. For
the inspection and acceptance of these subsurface projects
(foundation acceptance and structure acceptance), the quality
supervision station and design unit shall be informed in
advance to join the inspection and acceptance. If the
subsurface work is not inspected in accordance with the above
procedures, Party B shall assume all responsibilities and
losses incurred hereof.
4.
The
inspection and acceptance must be carried out as per
the
Detailed Rules and Regulations of Acceptance for Partitioned
Projects and Subdivisional Works after
the construction is completed. Party B shall have the as-built
drawing placing the project beneath the surface as per Party
A’s requirement.
5.
If
Party A has any doubts on the construction quality and
requests Party B to reassess the construction quality, Party B
shall cooperate with Party A. If it is acceptable after the
reassessment, the repairing and inspection fee will be borne
by Party A and the time limit for the project will be delayed
accordingly. If it is not acceptable after the reassessment,
the rectification, repairing, and inspection fee shall be
borne by Party B and the time limit for the project shall not
be delayed.
6.
Party
B shall submit the construction scheme regarding main
processes, and the construction template to the supervision
party and Party A for approval. Party B can carry out the
large-area construction as per the template after the template
is approved by Party A.
Party
B shall understand and account for the surrounding
environment, traffic road, field geologic information of the
worksite, contracting scope, construction drawings, and
construction organization design before executing this
Contract. Additionally, Party B also shall account for such
factors as construction technique measure, safety maintenance,
civilization site construction, and other similar factors.
Chapter 7
Site Management
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7.1 |
Management
Responsibilities of Both Parties
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1.
In
the project, the construction site is in the red line in the
general plan. The construction unit shall provide the
construction organization design before beginning the project,
and the construction unit shall execute the construction
organization design upon the approval of Party A’s site
representative. The construction plan layout shall be
considered the complete and entire agreement of the plan, and
the construction can be carried out only after Party A and the
supervision party review and provide their written approval.
Party B shall be responsible for the removal and movement
expense of any temporary facilities required by the
construction. The site drainage and sewage can be drained in
the municipal drainage network after they are treated in the
settling tank and septic tank made by Party B. Otherwise,
Party B will bear the penalty from the municipal
department.
2.
Party
A will carry out random inspections periodically. If Party A
finds an issue, Party B shall make the necessary corrections
within twenty-four (24) hours after receiving the notice.
Party B will be liable for any stop loss.
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7.2 |
Management
Responsibilities of Party B
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1.
Party
B shall abide by all applicable codes and regulations of
safety construction and civilization construction issued by
the national and local governments and the management
regulation of field civilization construction from Party
A.
2.
Party
B shall prepare a complete safeguard measure before carrying
out construction under any dangerous circumstances. During the
construction process, Party B shall be responsible for any
quality issues, safety accidents, and other results from Party
B’s actions.
3.
Party
B shall install the water meter and ammeter for water and
power use, which shall occur after inspection and approval by
Party A. Both Parties shall record the reference reading
together. Party A is responsible for providing the water
source and power distribution box. Party B is responsible for
meter connection and laying the lines and pipes for water and
power use. Both Party A and Party B will record the reading of
the water meter and ammeter together at the end of every
month. Party A will calculate the water rate and power rate
according to the reading and deduct the corresponding expense
from the installment payment.
Chapter 8
Materials
1.
Party
B shall provide to Party A the manufacturer plans, the
qualification certificate of the materials, and a sample of
the materials to be used.
2.
The
materials must meet the design requirements, acceptance
criteria, and related government regulations. Party B shall
send samples to the inspection department. The delivery and
sampling of the materials must be supervised on site by Party
A and the supervision party, and the materials can be used
only after their inspection.
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8.2 |
Material
Supplied by Party A
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1.
For
materials supplied by Party A, Party B shall provide the
details of when the materials should be delivered to the
site.
2.
For
the materials supplied by Party A and already delivered to the
site, Party B shall carry out their inspection and acceptance
with the supervision party, Party A’s site
representative, and the supplier. If the materials do not meet
the design requirements and quality specified in the supply
contract signed by both Parties, Party B has the right to
reject the materials.
Chapter 9
Design Change
