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Exhibit 10.3
Construction Contract
(Administrative Building for Turbine
Facilities)
THIS
PROJECT CONSTRUCTION CONTRACT is entered into by and between
Wuhan Generating Equipment Co., Ltd. (“Party A” or
the “Owner”) and Hubei Gongchuang Real Estate Co.,
Ltd. (“Party B” or the “Contractor”)
on this 26th day of March, 2007, pursuant to the relevant
rules and regulations of The People’s Republic of
China’s Law on Contracts and Construction and other
applicable laws and administrative regulations. Party A and
Party B are referred to herein collectively as the
“Parties” and individually as a
“Party.” Both Parties have voluntarily reached an
agreement on this project based on the principles of equality,
fairness, honesty, and credibility.
Part I - Basic Information
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I.
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Overview of the Project
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1. |
The
project shall be named the Office Building of Wuhan Generating
Equipment Co., Ltd.
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2. |
The
project shall be located in
Canglong
Island, Jiangxia District, Wuhan.
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3. |
The
approval number of the project is __________________.
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4. |
The
project shall be funded an investment by the Owner.
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Party
B shall be responsible for the foundation, civil engineering,
installation, and decoration of the project according to the
project scheme and construction drawings.
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1.
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The
project shall commence on June 26, 2006 (subject to written notice
by Party A). The actual date of commencement shall be subject to
the commencement report approved by the Owner and meet the network
scheme as determined by the Owner.
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2. |
The
project shall be completed by October, 2007.
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3. |
The
construction of the project shall last for a term of five hundred
(500) calendar days.
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The
quality of the project shall meet the standard of
excellence.
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V.
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Method for Determining the Project Cost
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The
cost of the project shall be determined based on the following
resources:
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1.
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The Construction Project Standard Cost of Hubei
Province ,
Decoration Project Standard Cost of Hubei Province, Installation
Project Standard Cost of Hubei Province, and Gardening Project
Standard Cost of Hubei Province
of 2003.
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2.
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The
estimated price on the Wuhan Construction Material
Market.
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3.
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The
cost standard shall be subject to the project type as determined by
Hubei Province.
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4.
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An
on-site confirmation.
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VI.
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Payment of the Project Cost and Progress Fee
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1.
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Party
A shall pay Thirty Million Renminbi (RMB 30,000,000) within two (2)
months after the execution of this Contract. After construction
begins, Party A shall make progress payment(s) based on the
progress of the project.
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2.
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After
the steel pillar and crossbeam have been constructed, delivered,
and installed, Party A shall make a progress payment of Thirty
Million Renminbi (RMB 30,000,000) as stipulated in Subsection
1.
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3.
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After
the project is completed and accepted upon examination, Party A
shall pay no less than 80% of the total contract price (including
payments made under Subsections 1-2).
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4.
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After
the final accounting of the project, Party A shall pay 85% of the
final accounting amount and the remaining 15% shall be the retainer
for the quality of the project (including the payments made under
Subsections 1-3).
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5.
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After
Party B completes the project, delivers the project documents to
the filing office, and delivers the completion documents and
drawings to Party A, Party A shall pay 10% of the total price.
After the final accounting is completed, Party A shall pay Party B
the progress payment, but the accumulated payment shall not exceed
95% of the final accounting amount and 5% of the amount shall be
the retainer for the quality of the project (including the payments
made under Subsections 1-4).
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VII.
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Composition of the Contract
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This
Contract shall consist of the following parts:
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1.
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This
Contract. Any written agreement or document as negotiated by the
Parties shall be deemed to be part of this Contract.
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2.
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Terms
and conditions of this Contract.
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3.
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Standards,
norms, and relevant technical documents.
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5.
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Other
relevant documents.
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1.
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The
terms in this Contract shall have the same meanings as the defined
terms in Part II.
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2.
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The
Contractor shall construct and complete the project in accordance
with this Contract and shall be responsible for the quality of the
project within the quality warranty period.
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3.
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The
Owner shall pay the Contract price and other fees in accordance
with the term and conditions in this Contract.
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4.
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If
the Owner has financial difficulty or due to other reasons cannot
pay the Contract price or other fees in accordance with the terms
and conditions in this Contract, the Owner’s guarantor shall
be liable under the Contract.
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IX.
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Effectiveness of Contract
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1.
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This
Contract shall be executed on March 26, 2007.
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2.
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This
Contract shall be executed at the
General
Manager’s Office of Hubei Gongchuang Real Estate Co.,
Ltd.
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3.
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The
Parties agree that this Contract will be effective upon the
signature and seal of the Parties.
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4.
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This
Contract is executed in three (3) originals. Each party shall hold
one (1) original, and one (1) original shall be filed by the
Owner.
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WUHAN
GENERATING EQUIPMENT CO., LTD.,
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HUBEI
GONGCHUANG REAL ESTATE CO., LTD.,
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as
Party A
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as
Party B
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By:
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/s/
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By:
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/s/
Chen Xiaohua
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Name:
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Name:
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Chen
Xiaohua
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Title:
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Title:
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[Seal
of Party A]
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[Seal
of Party B]
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Part II - Terms and Conditions
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I.
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Definitions of Terms and Contract Documents
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Article 1 |
Definitions of Terms
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The
following terms shall have the meaning herein unless otherwise
defined:
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1.1
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Contract Terms :
Provisions applicable to the project as agreed to by the Owner and
Contractor upon negotiation in accordance with the laws and
administrative regulations.
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1.2
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Owner :
The party herein (and its legal successors) who is qualified to
issue an offer of construction Contract and is capable of paying
the price of construction.
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1.3
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Contractor :
The
party herein (and its legal successors) who is accepted by the
Owner and qualified for the project construction.
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1.4
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Guarantor :
The party herein (and its legal successors) who has agreed to
automatically succeed to the obligation of the Owner when the Owner
has difficulty paying the price of construction.
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1.5
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Project Manager :
The representative appointed by the Contractor in the Contract
Terms who is responsible for the management of the construction and
performance of the Contract.
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1.6
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Design Institute :
The qualified institute (with corresponding qualification
certificates of project design) engaged by Owner to be responsible
for the design of this project.
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1.7
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Supervisor :
The qualified unit (with corresponding qualification certificates
of project supervision) engaged by the Owner to be responsible for
the supervision of this project.
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1.8
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Engineer :
The general supervision Engineer designated by the supervisor or
the representative designated by the Contractor for the performance
of the Contract. The specific identities and authorities of
Engineers shall be defined in the Contract Terms by both
Parties.
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1.9
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Project :
The
project set forth in this Contract by both Parties.
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1.10
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Contract Price :
The amount Owner shall pay the Contractor in accordance with this
Contract as the consideration of the Contractor’s compliance
with this Contract to complete the project and provide its warranty
for the quality of the project.
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1.11
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Expenses :
Expenses which are not included in the contract price and shall be
borne by Owner or the Contractor.
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1.12
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Delivery :
Completion of each part of the project of Phase II of Wuhan
Commerce & Trade Occupational School (in this Contract means
delivery to the Owner, abbreviated as “turn
key”).
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1.13
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Completion :
The project hereunder refers to the entirety of Wuhan Commerce
& Trade Occupational School as one (1) unit project and the
completion of the unit project is Completion.
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1.14
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Term :
The total number of days for the construction of the project agreed
in the Contract by both Parties (including statutory
holidays).
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1.15
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Date of Commencement :
The exact or a certain date prescribed in the Contract by both
Parties on which the Contractor shall start the construction of the
project.
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1.16
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Date of Completion :
The exact or a certain date prescribed in the Contract by both
Parties on which the Contractor shall finish the construction of
the project.
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1.17
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Drawings :
All the drawings (including specification and relevant documents)
which are necessary for the construction by the Contractor. The
drawings shall be provided by the Owner or the Contractor upon
consent of Owner.
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1.18
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Construction Location :
The location provided by Owner for the construction of the project
and any other location for construction prescribed by the Owner in
the drawings.
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1.19
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Written Forms :
Written forms are such forms like written contracts, letters, and
electronic data (including telegraph, teletype, facsimile,
electronic data exchange, and emails), where the contents are
presented in tangible form.
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1.20
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Liabilities for Breach of Contract
:
Liabilities for breach of contract are the liabilities undertaken
if one Party fails to perform the Contract obligations, or the
Contract obligations performed are not in conformity with the
Contract terms.
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1.21
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Claims :
Claims refer to the requests of economic compensation and/or
postponed time limit for a project brought forward by one Party to
the other Party, if there is actual loss due to the fault of the
other Party instead of the claimant during the execution of the
Contract.
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1.22
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Force Majeure :
Force majeure events are the objective situations which cannot be
predicted, avoided, or overcome.
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1.23
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Hour or Day :
Time referenced in hours shall begin to count when events come into
effect (including rest hours). Time referenced in days shall begin
to count on the next day, and the current day is excluded. If the
last day of the time limit falls on a rest day or a statutory
holiday, the business day following the rest day or holiday shall
be the last day of the time limit except for the Date of
Completion. Deadline time of the last day of the time limit is 24
o’clock on the current day.
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Article 2
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Contractual Documents and Explanation
Sequence
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2.1
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This
Contract includes the following documents:
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(2)
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Terms
and conditions of the Contract;
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(3)
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Standards,
criteria, and relevant technical documents;
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(5)
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Other
relevant documents.
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2.2
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During
the Contract performance, negotiations regarding this Project, such
as written agreements or documents endorsed or agreed by the Owner
and the Contractor, shall be deemed to be part of this
Contract.
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2.3
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When
the Contract contents are unclear or inconsistent, they shall be
settled through negotiation by the Owner and the Contractor on the
condition that the normal process of the project is not
affected.
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Article 3 |
Language, Applicable Laws, and Standards and
Specifications
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3.1
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The
original Contract is written in Chinese.
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3.2
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The
laws and regulations applied in this Contract are the following:
P.R.C. Construction Law, P.R.C. Tendering and Bidding Law, P.R.C.
Contract Law, P.R.C. Securities Law, P.R.C. Insurance Law, P.R.C.
Patent Law, P.R.C. Standardization Law, P.R.C. State Council Decree
No. 279 regarding Regulations on the Administration of Engineering
Quality of Construction Project, P.R.C. Land Management Law, P.R.C.
Arbitration Law, P.R.C. Civil Procedural Law, P.R.C. Law on
the Protection
of Cultural Relics ,
P.R.C. Regulation of Road Traffic Administration, P.R.C. Unfair
Competition Law, and Regulations on Management of Urban Appearance
and Environment.
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3.3
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Details
of the standards and specifications applied in this Contract are
set forth under “Technical
Specifications.”
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4.1
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The
Owner shall freely provide the following copies of drawings: seven
(7) copies for civil construction and six (6) copies for
installation. These drawings can be readjusted as
needed.
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4.2
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The
Contractor shall not transfer the drawings to a third party without
the approval of the Owner. After the expiration of the warranty
quality of the project, the Contractor shall return a complete set
of the drawings to the Owner except those to be archived by the
Contractor.
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4.3
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A
complete set of the drawings shall be kept at the construction site
by the Contractor to be used for project inspection by the Engineer
and other relevant personnel.
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II. |
Common Rights and Obligations of the Parties
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5.1
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Supervision
Unit and Assigned Engineer.
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The
Supervision Unit is ______________. The Chief Supervising Engineer
is ____________. The Chief Supervisor’s scope of authority as
authorized by the Owner includes: supervision of the investment,
progress, and quality of the project in accordance with the
Supervision Contract, Supervision Rules, Project Construction
Documents, Construction Rules, Standards, and Construction
Contract.
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5.2
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During
the performance of the Contract, with the authority granted to him
under this Contract, the Engineer in charge of the supervision
shall objectively and fairly handle the occurrence of any event
that may affect the rights or obligations of the Owner or the
Contractor. Any disagreement regarding how the Engineer handled the
issue shall be raised by one Party in accordance with the
stipulated dispute settlement in Article 32 of this
Contract.
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5.3
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The
supervising Engineer is not allowed to discharge any right or
obligation of the Contractor as set forth in this Contract, unless
expressly stated in this Contract or agreed to by the
Owner.
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Article 6 |
Assignment and Instruction of the Engineer
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6.1
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The
Engineer may assign a representative of the Engineer to exercise
the responsibility of the Engineer as set forth in this Contract
and may withdraw such assignment at any time. The Contractor shall
be notified in writing seven (7) days prior to the assignment and
withdrawal, and the supervising Engineer also shall notify in
writing the Owner of the assignment and withdrawal. The Notice of
the Assignment and the Notice of the Withdrawal are attached hereto
as Appendices to the Contract.
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Any
written letter issued to the Contractor by the representative of
the Engineer within his authorized scope shall have the same effect
as a letter issued by the Engineer. In case of any doubt regarding
the written letter issued by the representative of the Engineer,
the Contractor shall submit such letter to the Engineer and the
Engineer shall confirm its authority within forty-eight (48) hours.
The Engineer shall correct any mistake in his instruction to the
representative of the Engineer as necessary.
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Except
the Engineer or the Representative of the Engineer, no other person
assigned by the Owner to the site is entitled to issue any
instruction to the Contractor.
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6.2
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The
instruction of the Engineer and the notice signed by the Engineer
shall be submitted in writing to the Project Manager and shall take
effect after the receipt is signed and dated by the Project
Manager. If necessary, the Engineer may issue an oral instruction
and a written confirmation within forty-eight (48) hours and the
Contractor shall implement the instruction of the Engineer. If the
Engineer fails to issue a written confirmation, the Contractor
shall request a written confirmation within seven (7) days after
the issuance of the oral instruction. If the Engineer fails to
reply within forty-eight (48) hours, the oral instruction shall be
deemed as confirmed.
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If
the Contractor finds the instruction of the Engineer to be
unreasonable, the Contractor shall submit a written report
requesting a correction of the instruction within 24 hours. The
Engineer shall issue in writing within 24 hours after the receipt
of the report of the Contractor a decision either to correct the
instruction or instruct to continue with the original instruction.
If there is an emergency, the Contractor shall implement the
Engineer’s instruction as required or resume with the
unreasonable instruction, despite the lack of approval. Any
additional cost or economic loss suffered by the Contractor arising
from the instruction error shall be borne by the Owner (if it is
the responsibility of the supervising Engineer, it shall be
implemented in accordance with the relevant provisions in the
Contract), and the construction period shall not be
extended.
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This
provision shall also apply to any instruction or notice issued by
the representative of the Engineer.
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6.3
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The
Engineer shall give necessary instructions, approve matters, and
perform other obligations as stipulated in a timely manner in
accordance with this Contract. If the failure to comply with the
obligations of this Contract results in a delay, the Owner shall
bear any additional cost and compensate the Contractor for any
economic loss, and the construction term shall not be
extended.
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6.4
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The
Owner shall inform the Contractor in writing 7 days prior to
replacing the Engineer, and the successor shall continue to
exercise the power of the predecessor as stipulated in this
Contract and continue to perform the obligations.
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Article 7 |
Project Manager
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7.1
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The
name of the Project Manager is ________________ and his required
level of Qualification Certificate is the Second
Level.
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7.2
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The
Contractor shall issue and deliver its written notice to the
Engineer after it has been signed by the Project Manager. The
Notice shall take effect after it has been received, signed, and
dated by the Engineer.
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7.3
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The
Project Manager shall arrange the construction according to the
construction design (or construction scheme) approved by the Owner
and the instructions of the Engineer in accordance with this
Contract. The Project Manager shall take immediate measures to
secure the safety of personnel, the construction site, and the
properties if an emergency arises and it is impossible to contact
the Engineer, and the Project Manager shall deliver a report to the
Engineer within 48 hours after taking such measures. The economic
losses shall be borne by the responsible party and the construction
term shall not be extended.
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7.4
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If
the Contractor needs to replace the Project Manager, the Contractor
shall give the Owner a written notice at least 7 days in advance
and shall obtain the approval of the Owner. The successor shall
continue exercising the powers and performing the obligations of
his predecessor as stipulated in this Contract.
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7.5
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The
Owner shall negotiate with the Contractor regarding the dismissal
of an unqualified Project Manager.
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Article 8 |
Work of the Owner
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8.1
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The
Owner shall complete the following work within the schedule and in
compliance with the requirements of this Contract.
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(1) |
The
construction site has met the conditions for
construction.
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(2)
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The
construction site has been facilitated with necessary water,
electricity, and telecommunication lines to satisfy the needs
during the construction.
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(3)
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The
Owner has handled the compensation for the use rights for the land,
crop, house dismantlement, and clearance of any obstruction on the
land, in air and beneath the ground surface.
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(4)
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The
Owner is responsible for providing the road between the
construction site and the public roads and the main transportation
roads within the construction site. This construction passage is to
satisfy the transportation needs of the construction and the Owner
shall ensure that it is unblocked during the
construction.
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(5)
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The
Owner shall be responsible for providing the data on the geology of
the construction site and the underground pipelines, and the Owner
shall be responsible for the accuracy of the information. The Owner
shall complete these tasks within 10 days after the commencement of
the construction.
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(6)
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The
Owner shall be responsible for obtaining construction permits and
other necessary certificates, approvals, and permits regarding the
provisional use of the land, water, electricity, and gas prior to
the commencement of the construction.
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(7)
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The
Owner shall be responsible for identifying benchmarks and reference
points and submitting these in writing to the Contractor. The Owner
also shall conduct on-site delivery and inspections.
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(8)
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The
Owner shall be responsible for organizing the joint checkup and
clarification of the drawings by the Contractor and the designer
before the commencement of the construction.
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(9)
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The
Owner shall coordinate the protection of the underground pipelines
around the site and adjacent buildings and structures and bear the
relevant cost.
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8.2
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Party
B shall be responsible for the implementation of the above after
the negotiation between Party A and Party B, and Party A shall
support and cooperate with Party B unconditionally. Where Party A
fails to perform the obligations and this results in delay of
construction or loss of Party B, Party A shall compensate Party B
for the relevant loss.
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Article 9 |
Responsibilities of the Contractor
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9.1
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The
Contractor shall complete all the work of the construction
according to this Contract and meet the requirements of the
supervising Engineer and the Owner, and complete all other works as
stipulated in this Contract.
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(1)
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The
construction progress summary table that is required to be provided
by the Contractor to the Owner and the supervising Engineer is as
follows:
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(2)
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The
Contractor shall provide eight (8) copies of the monthly schedule
and the status for completion of the schedule of the previous month
before the 25
th day
of every month.
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(3)
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The
Contractor shall be responsible for providing the accident report
(if any) to the supervising Engineer and the Owner.
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(4)
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The
Contractor shall keep the site clean and tidy at all times. The
Contractor shall not make any oil stains on the cement ground or
place the construction equipment or materials directly on the
cement ground. The equipment shall be classified and placed in
order and kept in a fenced area with signs. All equipment and
materials on site shall be placed on pads and shall not be placed
directly on the ground. Waste material, garbage, and provisional
equipment which is no longer required shall be cleaned up and
removed, and there shall be no waste, garbage, and provisional
equipment before the completion. If the Contractor fails to
complete the aforementioned tasks, the Owner and the Supervising
Engineer are entitled to use other persons to perform these tasks
and the Contractor shall bear the relevant costs.
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(5)
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The
Contractor shall comply with relevant regulations of Wuhan on
safety and on-site construction.
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9.2
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If
the Contractor fails to perform the obligations in Article 9.1 and
this causes the Owner to suffer any loss, the Contractor shall
compensate the Owner for the relevant loss.
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III.
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Design of Construction Organization and Term of
Construction
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Article 10
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Organization and Schedule
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10.1
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The
Contractor shall submit the construction organization design
approved by the Owner, which shall satisfy the requirements of the
main construction term. It shall be submitted before the
commencement report is approved.
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10.2
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In
addition to obtaining the project plan in its entirety and in all
parts, the construction organization design shall include all kinds
of schemes, drawings, and measures regarding the construction
machinery settings, arrangement of the labor force, choice of each
specialized construction team, recruitment of management personnel,
and various remedies in case of delay.
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10.3
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Requirements
for the progress schedule in the unit project:
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The
Contractor shall be responsible for providing eight (8) copies of
the monthly schedule and the status for completion of the schedule
of the previous month before the 25
th day
of every month.
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10.4
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The
Contractor shall organize the construction according to the
schedule confirmed by the Engineer, and accept the inspection and
supervision of the progress by the Engineer. Where the actual
project progress is inconsistent with the confirmed schedule, the
Contractor shall propose improvement measures according to the
requirements of the Engineer and implement such measures after
confirmation by the Engineer. If the inconsistency is caused by the
Contractor, the Contractor shall have no right to request any
additional contract price for the improvement
measures.
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Article 11
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Commencement and Delay in the Commencement of the
Project
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11.1
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The
Contractor shall commence the project on the date of commencement
as stipulated in the Contract. In case of delay in the
commencement, the Contractor shall submit to the Engineer in
writing the reasons and request postponement not later than seven
(7) days before the commencement date as provided in the Contract.
The Engineer shall reply to the Contractor in writing within 48
hours after the receipt of the postponement request, otherwise, the
Engineer shall be deemed to have agreed to such request and the
construction period shall be extended accordingly. If the Engineer
does not approve the postponement request or the Contractor fails
to submit the request within the stipulated time limit, the
construction period shall not be extended.
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Article 12
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Suspension of Project
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Where
suspension of the project is deemed necessary by the Engineer,
the Engineer shall inform the Contractor in writing to suspend
the project and submit written suggestions within 48 hours
after the request. The Contractor shall suspend the project
according to the request of the Engineer and protect the
completed project in an appropriate manner. After carrying out
the suggestions of the Engineer, the Contractor may request in
writing to resume the project, and the Engineer shall reply
within 48 hours. If the Engineer fails to submit the
suggestions within the stipulated time limit, or the Engineer
fails to reply to the Contractor’s request to resume
within 48 hours, the Contractor may resume the project on its
own. In case of any suspension caused by Owner, Owner shall
bear the additional contract price and compensate the
Contractor for any losses incurred. In case of suspension
caused by the Contractor, the Contractor shall bear all the
costs incurred and the construction period shall not be
extended.
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Article 13
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Delay of the Construction
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If
the scope of the project increases or is amended but the
benchmarks are not affected, the construction term shall not
be extended. The Contractor shall be subject to the penalty as
stipulated in the commitment provision of the Contract if the
period is extended due to the Contractor.
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Article 14
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Completion of the Project
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14.1
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The
Contractor shall complete the project on the completion date stated
in the Contract or on the postponed completion date as agreed to by
the Engineer.
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14.2
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If
the failure to complete the project on the completion date stated
in the Contract or on the postponed completion date agreed to by
the Engineer is due to the Contractor, the Contractor shall be
liable for breach of contract.
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14.3
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If
Owner requires early completion of the project, an early completion
agreement shall be negotia
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