epc (engineering procurement and construction) agreement

232 Pages·2012·0.81 MB·English

EPC
(ENGINEERING
PROCUREMENT AND
CONSTRUCTION)
AGREEMENT
FOR CONSTRUCTION OF
TWO-LANE
NATIONAL HIGHWAY
WORKS
MINISTRY OF ROAD TRANSPORT &
HIGHWAYS
NEW DELHI
JULY, 2012
Contents
Overview of the Framework 1
PART I
Preliminary
Recitals 9
1 Definitions and Interpretation 11
1.1 Definitions 11
1.2 Interpretation 11
1.3 Measurements and arithmetic conventions 14
1.4 Priority of agreements and errors/discrepancies 14
1.5 Joint and several liability 15
PART II
Scope oftheProject
2 Scope of the Project 19
2.1 Scope of the Project 19
3 Obligations of the Contractor 20
3.1 Obligations of the Contractor 20
3.2 Obligations relating tosub-contracts andany otheragreements 21
3.3 Employment of foreign nationals 22
3.4 Contractor’s personnel 23
3.5 Advertisement on Project Highway 23
3.6 Contractor's care of the Works 23
3.7 Electricity, water andother services 23
3.8 Unforeseeable difficulties 23
4 Obligations of the Authority 25
4.1 Obligations of the Authority 25
4.2 Maintenance obligations prior to the Appointed Date 26
4.3 EnvironmentalClearances 27
5 Representations and Warranties 28
5.1 Representations and warranties of the Contractor 28
5.2 Representations and warranties of the Authority 29
5.3 Disclosure 30
6 Disclaimer 31
6.1 Disclaimer 31
PART III
Constructionand Maintenance
7 Performance Security 35
7.1 Performance Security 35
7.2 Extension of Performance Security 36
7.3 Appropriation of Performance Security 36
7.4 Release of Performance Security 36
7.5 Retention Money 36
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8 Right of Way 38
8.1 The Site 38
8.2 Procurement of the Site 38
8.3 Damages for delay in handing over the Site 39
8.4 Site to be free from Encumbrances 40
8.5 Protection of Site from encroachments 41
8.6 Special/temporaryRight ofWay 41
8.7 Access totheAuthority andtheAuthority’s Engineer 41
8.8 Geological and archaeological finds 41
9 Utilities and Trees 43
9.1 Existing utilities and roads 43
9.2 Shifting of obstructing utilities 43
9.3 New utilities 43
9.4 Felling of trees 44
10 Design and Construction of the Project Highway 45
10.1 Obligations prior to commencement of Works 45
10.2 Design and Drawings 47
10.3 Construction of the Project Highway 49
10.4 Maintenance during Construction Period 50
10.5 Extension oftime forcompletion 50
10.6 Incomplete Works 52
10.7 Maintenance Manual 52
11 Quality Assurance, Monitoring and Supervision 54
11.1 Quality of Materials and workmanship 54
11.2 Quality control system 54
11.3 Methodology 54
11.4 Inspection and technical audit by the Authority 55
11.5 External technical audit 55
11.6 Inspection of construction records 55
11.7 Monthly progress reports 55
11.8 Inspection 55
11.9 Samples 56
11.10 Tests 56
11.11 Examination of work before covering up 57
11.12 Rejection 57
11.13 Remedial work 57
11.14 Delays during construction 58
11.15 Quality control records and Documents 58
11.16 Video recording 58
11.17 Suspension of unsafe Construction Works 58
12 Completion Certificate 60
12.1 Tests on completion 60
12.2 Provisional Certificate 60
12.3 Completion of remainingWorks 62
12.4 Completion Certificate 62
12.5 Rescheduling of Tests 62
13 Change of Scope 63
13.1 Change of Scope 63
13.2 Procedure for Change of Scope 63
13.3 Payment for Change of Scope 65
13.4 Restrictions on Change of Scope 65
13.5 Power of the Authority to undertake works 65
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14 Maintenance 67
14.1 Maintenance obligations of the Contractor 67
14.2 Maintenance Requirements 68
14.3 Maintenance Programme 68
14.4 Safety, vehicle breakdowns and accidents 68
14.5 Lane closure 69
14.6 Reduction of payment for non-performance of Maintenance obligations 69
14.7 Authority’s right to take remedial measures 69
14.8 Restoration of loss or damage to Project Highway 70
14.9 Overriding powers of the Authority 70
15 Supervision and Monitoring during Maintenance 72
15.1 Inspection by the Contractor 72
15.2 Inspection and payments 72
15.3 Tests 73
15.4 Reportsof unusual occurrence 73
16 Traffic Regulation 74
16.1 Traffic regulation by the Contractor 74
17 Defects Liability 75
17.1 Defects Liability Period 75
17.2 Remedying Defects 75
17.3 Costofremedying Defects 75
17.4 Contractor’s failure to rectify Defects 76
17.5 Contractor to search cause 76
17.6 Extension of Defects Liability Period 76
18 Authority’s Engineer 77
18.1 Appointment of the Authority’s Engineer 77
18.2 Duties and authority of the Authority’s Engineer 77
18.3 Delegation by the Authority’s Engineer 77
18.4 Instructionsofthe Authority’s Engineer 78
18.5 Determinationby the Authority’s Engineer 78
18.6 Remunerationof the Authority’s Engineer 79
18.7 Termination of the Authority’s Engineer 79
PART IV
FinancialCovenants
19 Payments 83
19.1 Contract Price 83
19.2 Advance Payment 83
19.3 Procedure for estimating the payment for the Works 85
19.4 Stage Payment Statement for Works 85
19.5 Stage Payment for Works 85
19.6 Monthly Maintenance Statement of the Project Highway 86
19.7 Payment for Maintenance of the Project Highway 86
19.8 Payment of Damages 87
19.9 Time of payment and interest 87
19.10. Price adjustment for the Works 88
19.11 Restrictions onpriceadjustment 91
19.12. Price adjustment for Maintenance of Project Highway 92
19.13 Final Payment Statement 92
19.14 Discharge 93
19.15 FinalPaymentCertificate 93
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19.16 Finalpayment statement for Maintenance 93
19.17 Change in law 94
19.18 Correction ofInterim PaymentCertificates 94
19.19 Authority’s claims 95
19.20 Bonus for early completion 95
20 Insurance 96
20.1 Insurance for Works and Maintenance 96
20.2 Notice to the Authority 97
20.3 Evidence of Insurance Cover 97
20.4 Remedy for failure to insure 97
20.5 Waiver of subrogation 98
20.6 Contractor’s waiver 98
20.7 Cross liabilities 98
20.8 Accident or injury to workmen 98
20.9 Insurance against accident to workmen 99
20.10 Application of insurance proceeds 99
20.11 Compliance with policy conditions 99
Part V
Force MajeureandTermination
21 Force Majeure 103
21.1 Force Majeure 103
21.2 Non-Political Event 103
21.3 Indirect Political Event 104
21.4 Political Event 104
21.5 Duty to report Force Majeure Event 105
21.6 Effect of Force Majeure Event on the Agreement 105
21.7 Termination Notice for Force Majeure Event 106
21.8 Termination Payment for Force Majeure Event 106
21.9 Disputeresolution 107
21.10 Excuse from performance of obligations 107
22 Suspension ofContractor’s Rights 109
22.1 SuspensionuponContractorDefault 109
22.2 Authority to act on behalf of the Contractor 109
22.3 Revocation of Suspension 109
22.4 Termination 110
23 Termination 111
23.1 Termination for Contractor Default 111
23.2 Termination for Authority Default 113
23.3 Termination for Authority’s convenience 114
23.4 Requirements after Termination 114
23.5 Valuation ofUnpaidWorks 114
23.6 Termination Payment 115
23.7 Other rights and obligations of the Parties 116
23.8 Survival of rights 117
PART VI
OtherProvisions
24 Assignment and Charges 121
24.1 Restrictions on assignment and charges 121
24.2 Hypothecation of Materials or Plant 121
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25 Liability and Indemnity 122
25.1 General indemnity 122
25.2 Indemnity by the Contractor 122
25.3 Notice and contest of claims 123
25.4 Defence of claims 123
25.5 No consequential claims 124
25.6 Survival on Termination 125
26 Dispute Resolution 126
26.1 Dispute Resolution 126
26.2 Conciliation 126
26.3 Arbitration 126
26.4 Adjudication byRegulatoryAuthority, TribunalorCommission 127
27 Miscellaneous 128
27.1 Governing law and jurisdiction 128
27.2 Waiver of immunity 128
27.3 Delayed payments 128
27.4 Waiver 129
27.5 Liability for review of Documents and Drawings 129
27.6 Exclusionof implied warranties etc. 129
27.7 Survival 129
27.8 Entire Agreement 130
27.9 Severability 130
27.10 No partnership 130
27.11 Third Parties 131
27.12 Successors and assigns 131
27.13 Notices 131
27.14 Language 131
27.15 Counterparts 132
27.16 Confidentiality 132
27.17 Copyright and Intellectual Property rights 132
27.18 Limitation of Liability 133
28 Definitions 134
28.1 Definitions 134
Schedules
A Site of the Project 147
1. The Site 147
Annex-I:Site 148
Annex-II: Dates forproviding Right of Way 153
Annex-III: Alignment Plans 154
Annex-IV : Environmental Clearances 155
B Development of the Project Highway 156
1.Development of the Project Highway 156
2.[Rehabilitation and augmentation] 156
3.Specifications and Standards 156
Annex-I: Description of[Two-Laning and strengthening] 157
C Project Facilities 170
1.Project Facilities 170
2.Description of Project Facilities 170
D Specifications and Standards 171
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1.Construction 171
2.Design Standards 171
Annex-I: Specifications and Standards for Construction 172
E Maintenance Requirements 173
1.Maintenance Requirements 173
2.Repair/rectification of Defects and deficiencies 173
3.Other Defects and deficiencies 173
4.Extension of time limit 173
5.Emergency repairs/restoration 174
6.Daily inspection by the Contractor 174
7.Pre-monsoon Inspection/Post-monsoon Inspection 174
8.Repairs on account of natural calamities 174
Annex-I:Repair/rectification of Defects and deficiencies 175
F Applicable Permits 179
1.Applicable Permits 179
G Annex-I:Form of Guarantee forPerformance Security 180
Annex-II: Form of Guarantee for Withdrawal of Retention Money 184
Annex-III:Form of Guarantee for Advance payment 188
H Contract Price Weightages 191
I Drawings 200
1. Drawings 200
2. Additional drawings 200
Annex-I: List of Drawings 201
J Project Completion Schedule 202
1. Project Completion Schedule 202
2. Project Milestone-I 202
3. Project Milestone-II 202
4. Project Milestone-III 202
5. Scheduled Completion Date 202
6. Extension of time 203
K Tests on Completion 204
1. Schedule for Tests 204
2. Tests 204
3. Agency for conducting Tests 205
4. Completion Certificate 205
L Provisional/ Completion Certificate 206
M Payment reduction for non-compliance 208
1.Payment reduction for non-compliance with theMaintenance 208
Requirements
2. Percentage reductions in lump sum payments 208
N Selection of Authority’s Engineer 210
1.Selection of Authority’s Engineer 210
2. Terms of Reference 210
3. Appointment of Government entity as Authority’s Engineer 210
Annex-I: Terms of Reference for Authority’s Engineer 211
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O FormsofPaymentStatements 218
1.Stage Payment Statement for Works 218
2. Monthly MaintenancePaymentStatement 218
3. Contractor’s Claim for Damages 219
220
P Insurance
1. Insurance during Construction Period 220
2. Insurance for Contractor's Defects Liability 220
3.Insurance against injury to persons and damage to property 220
4.Insurance to be in joint names 221
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Overview of the framework
The Twelfth Plan envisages investment of USD 1 trillion in infrastructure for a
sustained and inclusive growth of the economy. To meet these expanding
demands, large investments will be needed in roads, railways, ports and civil
aviation sectors for augmentation of capacities and modernization. The public
sector is expected to continue to play an important role in building transport
infrastructure.
India has the second largest road network in the world totaling 4.2 million km
A modern EPC
but most of it is of poor quality. A significant part of the existing National framework is a
pre-requisite for
Highways (NH) consists of single-lane roads, which have suffered from a efficient delivery
prolonged neglect. Their length is about 20,000 km, which could increase further
during the Twelfth Plan on account of expansion of the NH network. These
single–lane national highways would have to be upgraded and augmented to
two-lane standards. Since most of these roads have low density traffic, they may
not be viable on PPP basis. Experience also suggests that annuity based projects
are comparatively expensive, while conventional contracts are prone to time and
cost overruns. It has, therefore, been decided to adopt the Engineering,
Procurement, Construction (EPC) mode of construction. A programme for
upgradation of 20,000 km to two-lane standards on EPC basis is to be taken up
during the Twelfth Plan.
Need for EPC contracts
National Highways Authority of India (NHAI) had hitherto been building roads
Item ratecontracts
through the conventional item rate contracts where the Government provides the are outdated
detailed design as well as the estimates of quantities for different items of work
(Bill of Quantities). Payments to the contractor are made on the basis of
measurements of the work done in respect of each item. Experience shows that
item rate contracts are prone to excessive time and cost overruns. The reasons for
their poor performance include inadequate project preparation and estimation
coupled with allocation of construction risks largely to the Government/NHAI.
For these reasons, the item rate mode of contracting has been abandoned in the
developed world.
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