TA-143-D00-G-TD003_0_Particular Conditions.pdf

7/23/2019 TA-143-D00-G-TD003_0_Particular Conditions.pdf

http://slidepdf.com/reader/full/ta-143-d00-g-td0030particular-conditionspdf 1/56

National Iranian Steel Co.

Baft Steel Complex

DDR R && MMaatteerriiaall HHaannddlliinngg PPllaanntt

PPrroo j jeecctt

“Particular Conditions”



TARA TARHEngineering Technological Co.

DR & Material Handling Plant ProjectNISCO

Page 1 of 3Particular ConditionsBaft Steel Complex

Table of ContentsDoc No.: TA-143-D00-G-TD003 17-Sep-07 Rev 0

PARTICULAR CONDITIONS

Clause Page

1 General Provisions 1

1.1 Laws and Language 1

1.2 Compliance with Laws 1

1.2.1 The Employer 1

1.2.2 The Contractor 1

1.3 Communications 2

2 The Employer 42.1 Right of Access to the Site 4

3 The Employer’s Administration 5

3.1 The Employer’s Representative 5

4 The Contractor 6

4.1 Scope of Work of the Contractor 6

4.2 Performance Securities 6

4.3 Contractor’s Representative 7

4.4 Subcontractor 7

4.5 Co-operation 7

4.6 Shipping 8

4.7 Delivery 8

4.8 Shipping and Delivery Documents 8

4.8.1 Shipping Documents 9

4.8.2 Delivery Documents 10

4.9 Employer’s Equipment 10

5 Staff and Labour 115.1 Foreign Staff and Labour 11

5.2 Alcoholic Liquor or Drugs 11

5.3 Arms and Ammunition 11

5.4 Festivals and Religious Customs 11

5.5 Epidemics 11

5.6 Disorderly Conduct 11







5.7 Observance by Subcontractors 12

5.8 Other Conditions 12

5.9 Returns of Labour 12

6 Plant, Materials and Workmanship 13

6.1 Quality Control, Inspection and Testing During Manufacture 13

6.2 Pre-shipment Inspection (Surveying) 15

6.3 Release for Shipment 15

7 Commencement, Delays and Suspension 17

7.1 Date of Delivery 17

7.2 Delay Compensations 177.3 Prolonged Delay 18

7.4 Delays Caused by Authorities 18

8 Contract Price and Payment 19

8.1 The Contract Price 19

8.2 Advance Payment 21

8.3 Application for Interim Payments 22

8.4 Schedule of Payments 22

8.5 Delayed Payments 27

9 Employer’s Financial Arrangement 28

10 Independent Entity 29

11 Separability of Provisions and Waiver 30

12 Observance of local laws and Respect of Local Customs 31

13 Modification and Entirety of the Contract 32

14 Act of Non-Intervention in Government Transactions 33

15 Use Before Taking Over 34

16 Insurances 35







17 Annexes to the Particular Conditions 36

Annex 1: Affidavit concerning Business Activities

Annex 2: Declaration concerning the Act of Non-Intervention in ……

Annex 3: Declaration of full acceptance of tender

Annex 3: Form of Performance Security

Annex 4: Form of Advance Payment Guarantee

Annex 5: From of Retention Money Guarantee



Contract No.:Doc No.: TA-143-D00-G-TD003 17-Sep-07 Rev 0

TARA

TARHE i i T h l i l

NISCO

Baft Steel Complex

DR & Material Handling Plant Project

Particular Conditions Page 1 of 52

1. General Provisions

1.1 Laws and LanguageThe Conditions of Contract shall in all respects be read, construed, and governed by the Laws of

Islamic Republic of Iran.

Contractor hereby declares that, he is fully aware and cognizant of all laws, regulations, and

ordinances of the Government of the Islamic Republic of Iran having an impact on the Contract

upto the Base Date. Any possible future claims in this regard shall be disregarded.

The Contract Agreement, these Particular Conditions, and General Conditions are prepared in

English.

All Drawings, Employer’s Requirements, etc are in English and are valid as such.

All communications shall be written in English.

1.2 Compliance with Laws

1.2.1 The Employer

The Employer shall assist the Contractor to obtain all import permits or licences required for any

part of the Plant and Materials in reasonable time having regard to the time for delivery of the

Plant and Materials and for completion of the Works. However, the Contractor shall submit well

in advance the details of Plant and Materials to the Employer. Payment of costs for obtaining

such licences and permits (if any) shall be made by the Employer but all the follow ups and

formalities shall be done by the Contractor.

The Employer undertakes to pay all custom duties of any kind whatsoever which may occur in

Iran in connection with Contractor’s Foreign Supply under the Contract, but all customs

formalities shall be carried out and risks resulting therefrom shall be born by the Contractor.

1.2.2. The Contractor

(a) The Contractor shall pay any taxes and duties at present and in future levied in the countries

of origin of the Contractor including Iran and of the Subcontractors and of the Contractor’s

supervisory personnel in connection with the Contract.

(b) The Contractor undertakes to pay all custom duties of any kind whatsoever which may occur

in Iran in connection with any parts and items imported for Local Supply under the Contract.

(c) All taxes, levies, charges, including social security and apprenticeship dues, customs duties




TARA

TARHE i i T h l i l

NISCO

Baft Steel Complex



pertaining to personal belongings of the Contractor’s personnel and payments imposed by

present Iranian Law to the Contractor, shall be paid by the Contractor, in accordance with the

said Law, provided that:

It is understood that the quotation of all rates, fees, and remuneration stated herein, is based

on the prevailing rate of the applicable taxes whatsoever, levies, charges, dues, customs

duties and other impositions in Iran on the Base Date.

In the event any additional taxes are required and/or effective change is made thereafter in

the said rates, necessary modification and adjustment to the Contract Price shall be made

accordingly.

(d) All taxes, levies, charges, including social security and apprenticeship dues related to civilconstruction works and erection works shall be paid by the Contractor according to

applicable Laws provided that:

It is understood that the quotation of all unit rates and prices is based on the prevailing rate of

applicable taxes whatsoever, levies, charges, dues and other impositions in Iran on the Base

Date.

In the event any additional taxes are required and/or effective change is made thereafter in

the said rates, necessary modification and adjustment to the Contract Price shall be made

accordingly.

Failure of the Employer to collect any legal deductions from payments to the Contractor shall not

relieve the Contractor of the obligation of payment of the same to the competent authorities.

1.3 Communications

The legal address of the Employer and Contractor are established as follows:

For the Employer

National Iranian Steel Company

No.685, Valiasr Ave., Tehran, Iran.

P.O.Box: 1594643118

Tel No. : (+9821) 88900995

Fax No. : (+9821) 88893279




TARA

TARHE i i T h l i l

NISCO

Baft Steel Complex



For the Contractor

P.O.Box:

Tel No. :

Fax No. :

All correspondence and legal communication are to be addressed as specified above. In case of

change of address, each Party to this Contract agrees to notify the other accordingly in Writing,

otherwise each Party is entitled to continue to direct their correspondence to the address givenabove and such correspondence will be considered legally valid.

The Employer reserves the right to require the Contractor to establish a coordination address in

Iran during execution of the Contract.

All communications shall be in Writing and shall include facsimile transmissions. Original

writings shall be sent by the issuing Party to the other Party.








TARA

TARHE i i T h l i l

NISCO

Baft Steel Complex



4. The Contractor

4.1 Scope of Work of the ContractorIn consideration of the payments to be made by the Employer to the Contractor and subject to the

terms and conditions of the Contract, the extent of the Contractor’s obligations shall cover

conceptual design, process design, basic design, detailed design, engineering, fabrication, testing,

painting, protection, packing, marking, DDU Site delivery (as per INCOTERMS 2000) of

Foreign Supply (including all its related customs formalities and risks resulting therefrom) and

DDP Site delivery (as per INCOTERMS 2000) of Local Supply of the complete Plant and

Materials as defined in Conditions of Contract (including any custom duties and costs related to

imported parts and components for Local Supply), together with construction management, civil

construction works including Temporary Works, proper off-loading and storage of both Foreign

Supply and Local Supply at Site, erection works, Tests on Completion and in general putting into

operation the entire Works on Site as well as provision of training, licence and know-how to

construct and operate the Works properly and efficiently at highest western world standards.

4.2 Performance Security

The Contractor shall submit to the Employer within 28 days after both Parties have signed the

Contract Agreement and before Effective Date of the Contract an unconditional performance

bank guarantee for the due performance of the Contract through a reputable bank acceptable to

the Employer and Central Bank of Iran, in the form enclosed to Particular Conditions for ten

percent (10%) of Foreign Portion of the Contract Price. The cost of this guarantee shall be at the

expense of the Contractor.

The Contractor shall also submit to the Employer within 28 days after both Parties have signed

the Contract Agreement and before Effective Date of the Contract an unconditional performance

bank guarantee for the due performance of the Contract through a reputable bank acceptable to

the Employer, in the form enclosed to Particular Conditions for five percent (5%) of Iranian

Portion of the Contract Price. The cost of this guarantee shall be at the expense of the Contractor.

The Performance Security shall be maintained in force until the issuance of Performance

Certificate in accordance with the requirements of Clause 4.2 [Performance Security] and Clause

11.3 [Extension of Defects Notification Period] of General Conditions.






TARA

TARHE i i T h l i l

NISCO

Baft Steel Complex



4.6 Shipping

The Contractor shall make use of Islamic Republic of Iran Shipping Lines (I.R.I.S.L.). In case

due to non-availability of I.R.I.S.L. ships other carriers have to be selected by the Contractor,

approval of the Employer shall be required. Non-availability of I.R.I.S.L. ships shall have to be

substantiated by the Contractor. In such cases any possible additional cost of selection of other

carriers shall be born by the Contractor.

4.7 Delivery

The Contractor shall be responsible for DDU Site delivery (as per INCOTERMS 2000) of

Foreign Supply and DDP Site delivery (as per INCOTERMS 2000) of Local Supply according todelivery dates stated in Time Schedule.

The Contractor shall give the Employer notice of his intention to proceed with shipment of

itemized parts of Foreign Supply, 42 days before the expected date of shipment. This notice shall

indicate the following:

(a) Number of Contract

(b) Port of shipment/place of delivery including information and specification of ports of

arrival

(c) Approximate total volume and gross weight

(d) kind of cargo

(e) Additional information about long and/or heavy lifts

The Contractor shall give the Employer notice of his intention to proceed with shipment of Local

Supply 28 days before the expected date of shipment. The notice shall indicate the followings:

(a) Number of Contract

(b) Approximate total volume and gross weight

(c) Additional information about long and/or heavy lifts.

4.8 Shipping and Delivery Documents

As proof of shipping and delivery, certain documents are to be provided. In order to differentiate

such proof for Foreign Supply and Local Supply in these documents they will be referred to as

Shipping Documents and Delivery Documents for Foreign Supply and Local Supply

respectively.




TARA

TARHE i i T h l i l

NISCO

Baft Steel Complex



4.8.1. Shipping Documents

Regarding Foreign Supply, the Shipping Documents shall be the following:

(a) full set of clean negotiable ocean bill of lading or airway bill or bill of freight or

equivalent transport document as the case may be, marked “Freight Prepared” evidencing

that goods are actually en-route and four extra copies or photocopies bearing the flight

stamp consigned to Employer's name and address.

(b) four (4) copies of Certificate of Origin, two (2) copies of which shall be certified by the

local Chamber of Commerce and legalized by the relevant Islamic Republic of Iran

Consulate;

(c) four (4) copies of packing list;(d) six (6) signed original commercial Invoices, confirming that Plant and/or Materials are in

compliance with the Contract and the relevant proforma invoice, 2 (two) of which shall

be certified by Local Chamber of Commerce and legalized by the relevant Islamic

Republic of Iran Consulate;

(e) inspection certificate in one (1) original and two (2) duplicates issued by Surveyor as

specified in Sub-Clause 6.2 of this Particular Conditions. The inspection certificate shall

certify that the quality, quantity, packing and marking of the goods shipped are strictly in

compliance with Employer’s Requirements and its related Annexes;

(f) four (4) copies of "Release Certificate for Shipment" issued by the Employer as in Sub-

Clause 6.3 of Particular Conditions of Contract;

(g) evidence of insurance of Plant and Materials in one (1) original and four (4) copies.

The Employer reserves the right to check the commercial Invoices. For the purpose of such

checking the Employer shall delegate a duly authorized representative who shall be present after

Contractor's 14 days written notice advising the places to check and certify that the commercial

Invoices are correct and complete. Such certification shall be made at the place(s) advised withinthe shortest possible time but not exceeding 21 days from Contractor’s written notice as to

accommodate of the Commercial Invoices.

Proof of delivery of Plant and Materials transported by truck or aeroplane is to be constituted by

other documents in accordance with special arrangements between the Employer and the

Contractor.




TARA

TARHE i i T h l i l

NISCO

Baft Steel Complex



4.8.2 Delivery Documents

Proof of DDP Site delivery regarding Local Supply shall be pending on submission of

documents referred to as Delivery Documents which shall consist of the following:

(a) Full set of bill of freight marked "Freight Prepaid";

(b) four (4) copies of packing list;

(c) four (4) copies of "Release Certificate for Shipment" issued by the Employer as in Sub-

Clause 6.3 of Particular Conditions;

(d) Inspections certificate in one (1) original and two (2) duplicates, issued by Surveyor,

certifying that the quality, quantity, packing and marking of goods are in compliance with

Employer’s Requirements and its related Annexes;(e) six (6) signed original commercial Invoices, two of which shall be certified by the

Employer;

(f) Certificate of delivery of Plant and/or Materials to the Site, in one (1) original and four

(4) copies.

The Employer reserves the right to check the commercial Invoices. For such purpose the

Employer shall nominate a duly authorized representative who shall be present after

Contractor’s 14 days written notice advising the places to check and certify that the

commercial Invoices are correct and complete. Such certification shall be made at the

places advised within shortest possible time but not exceeding 14 days from Contractor’s

written notice as to accommodate of the commercial Invoices.

4.9 Employer’s Equipment

The Employer shall not make available any Employer’s Equipment for use by the Contractor.




TARA

TARHE i i T h l i l

NISCO

Baft Steel Complex



5. Staff and Labour

5.1 Foreign Staff and LabourThe Contractor shall import any personnel who are necessary for the execution of the Works.

The Contractor must ensure that these personnel are provided with the required residence visas

and work permits. The Contractor shall be responsible for the return to the place where they were

recruited or to their domicile of imported Contractor’s Personnel. In the event of the death in the

Country of any of these personnel or members of their families, the Contractor shall similarly be

responsible for making the appropriate arrangement for their return or burial.

5.2 Alcoholic Liquor or Drugs

The Contractor shall not sell, give, barter or otherwise dispose of any alcoholic liquor or drugs or

permit or suffer any such importation, sale, gift, barter or disposal by his Subcontractors, agents

or employees.

5.3 Arms and Ammunition

The Contractor shall not give, barter or otherwise dispose of to any person or persons any arms

or ammunition of any kind or permit or suffer the same as aforesaid.

5.4 Festivals and Religious Customs

The Contractor shall, in all dealings with labour in his employment, have due regard to all

recognized festivals, days of rest and religious or other customs.

5.5 Epidemics

In the event of any outbreak of illness of an epidemic nature the Contractor shall comply with

and carry out such regulations, orders and requirements as may be made by the Government or

the local medical or sanitary authorities for the purpose of dealing with and overcoming the

same.

5.6 Disorderly Conduct

The Contractor shall at all times take all reasonable precautions to prevent any unlawful riotous

or disorderly conduct by or amongst his employees and for the preservation of peace and




TARA

TARHE i i T h l i l

NISCO

Baft Steel Complex



protection of persons and property in the neighborhood of the Works against the same.

5.7 Observance by Subcontractors

The Contractor shall be responsible for observance by his Subcontractors of the foregoing

provisions.

5.8 Other Conditions

Any other conditions affecting labour and wages shall be fulfilled by Contractor.

5.9 Returns of LabourThe Contractor shall, if required by the Employer, deliver to the Employer’s Representative or at

his office a return in detail, in such form and at such intervals as the Employer may prescribe,

showing the supervisory staff and the numbers of the several classes of labour from time to time

employed by the Contractor on the Site.




TARA

TARHE i i T h l i l

NISCO

Baft Steel Complex



6. Plant, Materials and Workmanship

6.1 Quality Control, Inspection and Testing During Manufacture(a) The Contractor shall submit to the Employer the quality control, inspection and testing

information called for in the Employer’s Requirements and its related Annexes and shall

carry out and adhere to the procedures approved, except where otherwise approved in

Writing by the Employer.

(b) The Contractor shall expedite the manufacture and the delivery of the Plant and

Materials. The Employer shall be entitled at all reasonable times during manufacture,

storage and packing, and as provided in the Employer’s Requirements and its related

Annexes, to inspect, examine and test on the Contractor’s or Subcontractor’s premises, in

warehouses, storage areas, piers and loading docks the qualities and workmanship of the

Plant and Materials, and the progress of the Works performed under the Contract.

If part of the said Plant and Materials is being manufactured, packed on the premises of

Subcontractors, it shall be the obligation of the Contractor to obtain for the Employer, the

permission to inspect, examine and test as if the said Plant and Materials were being

manufactured and/or packed on the Contractor’s own premises. Such inspection,

examination or testing if made shall not release the Contractor from any obligation underthe Contract.

(c) The Contractor shall furnish updated progress reports, and inspection and testing

schedules in a monthly basis. In order to facilitate the follow-up of the progress of work

by the Employer, the Contractor and/or Subcontractor shall provide the Employer all

pertinent information required, especially the quality control and testing manuals, as

approved by the Employer.

(d) If the quality control and testing manuals and/or the Employer’s Requirements and its

related Annexes call for testing of the Plant and Materials in the presence of the

Employer, the Contractor shall give the Employer at least 28 days notice by facsimile of

the date and place.

Testing procedures and methods shall be in accordance with the quality control

procedures of the above mentioned manuals and/or the Employer’s Requirements and its




TARA

TARHE i i T h l i l

NISCO

Baft Steel Complex



related Annexes. The required documents of the Plant shall be available at the place of

inspection and testing. The Employer shall give the Contractor at least 24 hours notice by

facsimile or telex of their intention to attend the tests. If the Employer does not attend at

the test at the date which the Contractor has stated in his notice, the Contractor then may

proceed and shall forthwith forward to the Employer duly certified copies of the test

results.

(e) Where the Contract provides for tests on the premises of the Contractor or of any

Subcontractor, the Contractor shall provide free of charge such assistance, labour,

materials, electricity, fuel, stores, apparatus and instruments as may be required and as

may be reasonably demanded to carry out such tests efficiently.

(f) As and when any Plant and Materials shall have passed the tests referred to in this Clause

and the tests have been witnessed by the Employer, the test protocol prepared by the

Contractor will be counter signed by the Employer. Such document shall not relieve the

Contractor of any obligation under the Contract.

(g) If as a result of such inspection, examination or test of the Plant and Materials (other than

a test on completion) the Employer shall decide that such Plant and Materials is defective

or not in accordance with the Contract, he shall notify the Contractor accordingly stating

in Writing his objection and reasons therefore. The Contractor shall with all speed make

good the defect or ensure that the Plant and Materials complies with the Contract.

Thereafter, if required by the Employer, the test shall be repeated under the same terms

and conditions save that all reasonable expenses to which the Employer may be put by

the repetition of the tests shall be deducted from the Contract Price.

(h) All traveling and living expenses of the Employer’s Personnel arising in connection with

the quality control, inspection and testing covered by this Clause shall be paid by the

Employer.




TARA

TARHE i i T h l i l

NISCO

Baft Steel Complex



6.2 Pre-Shipment Inspection (Surveying)

Upon opening of the Letter of Credit (L/C), the Employer shall notify the Contractor in Writing

the name and address of the surveyor appointed thereby. Employer shall be allowed to change

the surveyor, provided that the L/C is amended accordingly not later than three (3) Months prior

to the first scheduled shipment. It is agreed that the surveyor in this Contract is

_______________________________________.

Thereupon, the Contractor shall contact the surveyor and all necessary arrangements for

surveying will be made by the Contractor and the surveyor. The surveyor so appointed by the

Employer shall, not later than fourteen (14) days prior to the scheduled date of shipment set forth

in the relevant notice of readiness, carry out a quality and quantity inspection to verify thecompliance of the Plant and/or Materials with the relevant requirements of the Contract.

If the Employer fails to appoint the surveyor or such a surveyor appointed by the Employer fails

to carry out the surveying at the respective time after receipt of a sixty (60) days notice from the

Contractor and a period of ten (10) days elapses, the Contractor shall inform the Employer

immediately upon receipt of such information, the Employer shall appoint second (another)

surveyor, subject to approval by Central Bank of Iran (Bank Markazi Iran).

If, and immediately after, the results of the inspection satisfy the requirements, the surveyour

shall sign one (1) original and two (2) duplicates of the certificate of quality and quantity and

packing, and deliver same to the Contractor and then the Plant and/or Materials will be released

for shipment (actual readiness for delivery date). Signing of this certificate by the surveyour shall

not relieve the Contractor from any responsibility he has under the Contract, including

responsibility for errors, omissions. discrepancies and non-compliances.

The cost of surveying shall be paid by the Contractor. Payment to the Surveyour shall only be

affected by the instruction of the Employer.

6.3 Release for Shipment

Any Materials and Plant to be supplied under the Contract require a release for shipment prior to

dispatch from the manufacturer’s premises. The document hereinafter called “Release Certificate

for Shipment” will be issued by the Employer under the conditions listed below:

(a) Compliance with the requirements of the quality control and testing manuals as

mentioned under Sub-Clause 6.1 above




TARA

TARHE i i T h l i l

NISCO

Baft Steel Complex



(b) Notification by the Contractor to the Employer regarding cargo readiness for final

inspection; through facsimile 21 days before final inspection date

(c) Inspection and approval by the surveyor of cargo (Plant and Materials, boxes, crates and

the like)




TARA

TARHE i i T h l i l

NISCO

Baft Steel Complex



7. Commencement, Delays and Suspension

7.1 Date of DeliveryFor the purposes of Sub-Clause 7.2 the actual date of delivery of the Plant and Materials shall

mean the date at which 97% of the value of the Plant and Materials is delivered to Site for

Foreign Supply and Local Supply, provided however, that the balance of the items of Plant and

Materials shall be delivered in such a way that erection is not delayed.

7.2 Delay Compensations

If the Plant and Materials is not delivered within the periods set out in the Contract, Employer

shall have the right to demand and receive from the Contractor for compensation and not by way

of penalty, a sum of money equal to one half of one percent of the Contract Price of the

respective part which can not in consequence of the said delay be put to the use intended, for

each complete week by which the actual delivery date exceeds the Contract delivery date.

The compensation for delay in delivery in accordance with this Clause to be paid by the

Contractor are limited to a maximum of 5% (five percent) of the Contract Price. The said

compensation will not be claimed by the Employer if delay in delivery of the Plant and Materials

would not affect take over of the Works (issuance of Taking-Over Certificate). In the event

delivery of the Plant an/or Materials or such parts of Plant and/or Materials that on delivery

thereof postpones commissioning of the Plant, for a period exceeding six(6) Months, the

Contractor shall be liable for breach of the Contract.

If the Contractor shall fail to complete the Works within the Time for Completion, the Employer

shall be entitled, on giving to the Contractor within a reasonable time notice in Writing to

reduction of 0.07 per cent of Contract Price for each day between the Time for Completion and

the actual date of completion stated in Taking-Over Certificate, but the reduction for delay in

Time for Completion shall not in any case exceed 10 percent of Contract Price. Except as

provided in Sub-Clause 7.3 of this Clause such reduction shall be to the exclusion of any other

remedy of the Employer in respect of Contractor’s failure to complete as aforesaid, but shall not

relieve the Contractor from any other of his obligations under Contract.






TARA

TARHE i i T h l i l

NISCO

Baft Steel Complex



8. Contract Price and Payment

8.1 The Contract Price(1) In consideration of the supply of Plant and Materials and performance of other parts of the

Scope of Contract, as specified in the Contract Documents, the Employer shall pay the

Contractor the sum ofEuro ………………

(……………… ……………… ……………… ……………

)

as Foreign Portion andIRR ……………… (……………… ……………… ……………… …………)

as Iranian Portion of the Contract Price. The above mentioned prices is the total sum of the

following amounts:

(A)Iranian Portion(a) the price of design and engineering (which includes cost of conceptual design,

process design, basic design and detailed design) of IRR ………………

.

(b) the price of DDP Site (as per INCOTERMS 2000) of Local Supply (including related

operating, capital and commissioning spare parts) ofIRR ………………

.

(c) the price of local transportation and insurance of Foreign Supply as per Conditions of

Contract ofIRR ………………

.

(d) the price of insurance of the Works (total insurance less insurance of Local Supply

and Foreign Supply) as per Conditions of Contract ofIRR ………………

.

(e) the price of training as per Conditions of Contract ofIRR ………………

.

(f) the estimated price of civil construction works (as defined in the Employer’s

Requirements) as per Conditions of Contract ofIRR ………………

.

(g) the price of erection works (including offloading of Local Supply and Foreign Supply

at Site and any related supervision) ofIRR ………………

.

(h) the price of construction management ofIRR ………………

.

(i) the price of Tests on Completion of IRR ……………… .

(j) the price of licence and know-how (if any) ofIRR ………………

.




TARA

TARHE i i T h l i l

NISCO

Baft Steel Complex



(B)Foreign Portion

(a) the price of design (which includes cost of conceptual design, process design, basic

design and detailed design) and engineering ofEuro ………………

.

(b) the price of FOB supply (as per INCOTERMS 2000) of Foreign Supply (including

related operation, capital and commissioning spare parts) ofEuro ………………

.

(c) the price of shipment and insurance of Foreign Supply as per Conditions of Contract

of Euro ………………

.

(d) the price of insurance of the Works (total insurance less insurance of Local Supply

and Foreign Supply) as per Conditions of Contract ofEuro ………………

.

(e) the price of training as per Conditions of Contract ofEuro ………………

.

(f) the price of erection works (including any supervision) ofEuro ………………

.

(g) the price of construction management ofEuro ………………

.

(h) the price of Test on Completion ofEuro ………………

.

(i) the price of licence and know-how (if any) ofEuro ………………

.

(2) Prices mentioned in Sub-Clause 8.1(1) above are based on item prices set out in Schedule of

Prices and Price Breakdown (Document B) and shall include costs of packing and marking,terminal handling charges, etc. as per Conditions of Contract.

(3) Price of items missed to be separately indicated in the Price Breakdown shall be deemed as

have been included in the price of other items. Price of items indicated to be zero means that

the Contractor shall provide such items free of charge under the Contract.

(4) The Contract Price as in sections A(a), A(b), A(c), A(d), A(e), A(f), A(h), A(i), A(j), A(k),

B(a), B(b), B(c), B(d), B(e), B(f), B(g), B(h), and B(i) of Sub-Clause 8.1(1) above is fixed

and not subject to escalation or any adjustment under Sub-Clause 13.8 [Adjustment for

Changes in Cost] of General Conditions.

(5) Final price of section A(g) of Sub-Clause 8.1(1) above shall be calculated considering actual

volumes of civil construction works using item prices as specified in the Schedule of Prices

and Price Breakdown. The Contractor’s multiplication factor for civil construction works




TARA

TARHE i i T h l i l

NISCO

Baft Steel Complex



shall be …….. . Base adjustment indexes of the Contract (shakhese mabnaye peyman) shall be

the adjustment indexes declared by Management and Planning Organization of Iran for the……… quarter of Iranian year 1386.

(6) If the Contract shall not become effective within a period of 4 months after signature of the

Contract Agreement for reasons not attributable to the Contractor, the Contractor shall be

entitled to request revision of the Contract Price which however shall be fair and

substantiated by detailed documents and shall be agreed by both Parties.

8.2 Advance Payment

(1) Iranian Portion

Fifteen percent (15%) of Iranian Portion of the Contract Price equal to the amount of

IRR ………………………….. shall be made out of Local L/C (as defined in Sub-Clause 8.4(1))

and paid to the Contractor as Iranian Portion Advance Payment within the period set forth in

the General Conditions on presentation to the Local Bank (as defined in Sub-Clause 8.4(1))

of the Employer’s certificate that the Contractor has submitted the following documents to

the Employer:

(a) advance payment guarantee for the same amount in favour of the Employer in a form

according to Annex 4 of Particular Conditions.

(b) Performance Security in favour of the Employer in the amount set forth in Sub-

Clause 4.2 [Performance Security] of these Particular Conditions and in a form


(c) advance payment Statement addressed to the Employer in one original and five

duplicates.

After receipt of this advance payment by the Contractor, fifteen percent (15%) shall be

deducted from any Statement of Contractor regarding Iranian Portion as amortization rate

concerning Iranian Portion Advance Payment.

(2) Foreign Portion

Fifteen percent (15%) of Foreign Portion of the Contract Price equal to the amount of

Euro ……………….. shall be made out of Foreign L/C (as defined in Sub-Clause 8.4(2)) and




TARA

TARHE i i T h l i l

NISCO

Baft Steel Complex



paid to the Contractor within the period set forth in the General Conditions on presentation to

the Foreign Bank (as defined in Sub-Clause 8.4(2)) of the Employer’s certificate that

Contractor has submitted the following documents to the Employer:

(a) advance payment guarantee for the same amount in favour of the Employer in a form


(b) Performance Security in favour of the Employer in the amount set forth in Sub-

Clause 4.2 [Performance Security] of these Particular Conditions and in a form


(c) advance payment Statement addressed to the Employer in one original and five

duplicates.After receipt of advance payment by the Contractor, fifteen percent (15%) shall be deducted

from any Statement of Contractor regarding Foreign Portion as amortization rate concerning

Foreign Portion Advance Payment.

8.3 Application for Interim Payments

From any Statement of the Contractor regarding Iranian Portion of Contract Price ten percent

(10%) shall be deducted for good performance of the Contract as Retention Money.

Any Statement of the Contractor shall include amounts to be deducted for retention, advance

payment amortization, legal deductions, and any other amount as specified under Sub-Clause

14.3 of General Conditions or other Clauses of Conditions of the Contract.

8.4 Schedule of Payments

The total Contract Price shall be paid to the Contractor in the following manner:

(1) Iranian Portion

Subject to fulfillment of items (a), (b), (c) and (d) of Clause 5 of the Contract Agreement an

irrevocable and transferable Letter of Credit (L/C) shall be opened by the Employer equal to

one hundred percent (100%) of Iranian Portion of the Contract Price, hereinafter referred to

as the “Local L/C”, amounting toIRR ……………………. in favour of the Contractor through

one of commercial banks of Islamic Republic of Iran with corresponding bank in ______




TARA

TARHE i i T h l i l

NISCO

Baft Steel Complex



acceptable to Central Bank of Iran (Bank Markazi Iran) hereinafter referred to as the “Local

Bank”. The Local L/C shall expire thirty (30) Months after its opening date.

Partial shipment and partial payments shall be allowed under said Local L/C.

The text of Local L/C shall be in accordance with Uniform Customs and Practice for

Documentary Credits of the International Chamber of Commerce (Publication No. 600).

All the costs in Iran relevant to opening of the Local L/C shall be at the Employer’s account

and all the costs in Iran relevant to utilizing the Local L/C shall be at the Contractor’s

account. Transferring bank charges in respect of transfers shall be payable by the Contractor.

The transferable credit shall be transferred only once.

In the event of any delay in the performance of the Works with respect to the contractualTime Schedule, the Employer shall extend the validity of the Local L/C accordingly.

If the delay to perform the Contract according to the contractual Time Schedule is due to

reasons imputable to the Contractor, then the cost of extension of the Local L/C shall be

borne and paid by the Contractor keeping firm all other rights of the Employer under the

provisions of the Contract.


reasons imputable to the Employer then the cost of extension of the Local L/C shall be borne

and paid by the Employer keeping firm all other rights of the Contractor under the provisions

of the Contract.


Force Majeure in Iran the cost of the extension of the Local L/C shall be borne and paid by

the Employer and if the delay to perform the Contract according to the contractual Time

Schedule is due to Force Majeure outside Iran the cost of the extension of the Local L/C shall

be borne and paid by the Contractor.

Approved amounts of each Statement regarding following items shall be made out of the

Local L/C:

(1-1) Pro rata payment of price of design and engineering

The price of design and engineering shall be paid in proportion to design and

engineering works progress approved by the Employer’s Representative against

presentation to the Local Bank of monthly Statements approved by the Employer.




TARA

TARHE i i T h l i l

NISCO

Baft Steel Complex



(1-2) Pro rata payment of price of Local Supply

The price of DDP Site delivery of Local Supply shall be paid pro rata shipment of

Local Supply against presentation to the Local Bank of Delivery Documents, as defined

in Sub-Clause 4.8.2 herein for Local Supply, approved by the Employer.

(1-3) Pro rata payment of price of local transportation and insurance of Foreign Supply

The price of local transportation and insurance of Foreign Supply shall be paid pro rata

shipment of Foreign Supply against presentation to the Local Bank of DDU Site

delivery certificate approved by the Employer.

(1-4) Pro rata payment of price of insurance of the Works

The price of insurance of the Works (total insurance less insurance of Local Supply and

Foreign Supply) shall be paid in proportion to civil construction and erection works

progress approved by the Employer’s Representative against presentation to the Local

Bank of monthly Statement approved by the Employer.

(1-5) Pro rata payment of price of civil construction works

The price of civil construction works shall be paid in proportion to civil construction

works progress approved by the Employer’s Representative against presentation to the

Local Bank of monthly Statement approved by the Employer.

(1-6) Pro rata payment of price of erection works

The price of erection works shall be paid in proportion to erection works progress

approved by the Employer’s Representative against presentation to the Local Bank of

monthly Statement approved by the Employer.

(1-7) Monthly payment of price of construction managementThe price of construction management shall be paid in proportion to civil construction

and erection works progress approved by the Employer’s Representative against

presentation to the Local Bank of monthly Statement of the Contractor approved by the

Employer.




TARA

TARHE i i T h l i l

NISCO

Baft Steel Complex



(1-8) Monthly payment of price of Tests on Completion

The price of Tests on Completion shall be paid against presentation to the Local Bank

of monthly Statement of the Contractor approved by the Employer.

(1-9) Monthly payment of price of training

The price of training shall be paid in proportion to training progress against

presentation to the Local Bank of monthly Statement of the Contractor approved by the

Employer.

(2) Foreign Portion

Subject to fulfillment of items (a), (b), (c) and (d) of Clause 5 of the Contract Agreement an

irrevocable and transferable Letter of Credit (L/C) shall be opened by the Employer equal to

one hundred percent (100%) of Foreign Portion of the Contract Price, hereinafter referred to

as the “Foreign L/C”, amounting toEuro ……………

in favour of the Contractor through one

of commercial banks of Islamic Republic of Iran with corresponding bank in __________

acceptable to Central Bank of Iran (Bank Markazi Iran) hereinafter referred to as the

“Foreign Bank”. The Foreign L/C shall expire thirty (30) Months after its opening date.

Partial shipment and partial payments shall be allowed under said Foreign L/C.The text of Foreign L/C shall be in accordance with Uniform Customs and Practice for

Documentary Credits of the International Chamber of Commerce (Publication No. 600).

All the costs in Iran relevant to the Foreign L/C shall be at Employer’s account and all the

costs outside Iran relevant to the Foreign L/C shall be at the Contractor’s account.

Transferring bank charges in respect of transfers shall be payable by the Contractor. The

transferable credit shall be transferred only once.

In the event of any delay in the performance of the Works with respect to the contractual

Time Schedule, the Employer shall extend the validity of the Foreign L/C accordingly.


reasons imputable to the Contractor, then the cost of extension of the Foreign L/C shall be

borne and paid by the Contractor keeping firm all other rights of the Employer under the

provisions of the Contract.






TARA

TARHE i i T h l i l

NISCO

Baft Steel Complex



(2-4) Monthly payment of price of training

The price of training shall be paid in proportion to training progress against

presentation to the Foreign Bank of monthly Statement of the Contractor approved by

the Employer.

(2-5) Monthly payment of price of construction management

The price of construction management shall be paid in proportion to civil construction

and erection works progress against presentation to the Foreign Bank of monthly

Statement of the Contractor approved by the Employer.

(2-6) Monthly payment of price of Tests on Completion

The price of Tests on Completion shall be paid against presentation to the Foreign

Bank of monthly Statement of the Contractor approved by the Employer.

(3) Payment at Take Over

Fifty percent (50%) of Retention Money shall be paid to the Contractor after issuance of

Taking-Over Certificate. Remaining fifty percent of the Retention Money shall be paid to the

Contractor after issuance of Performance Certificate to the Contractor.

The Employer shall pay remaining fifty percent of the Retention Money against a bank

guarantee of the same amount in the form of Annex 5 to these Particular Conditions and

through a bank acceptable to the Employer. The said bank guarantee shall be valid until 70

days after the expiry of the Defects Notification Period and shall be extended at the request

of the Employer.

Specimen of the signature of Employer's authorized representatives who will sign the documents

shall be introduced to the Local/Foreign Bank within 14 days after opening of Local/Foreign

L/C. The Employer shall have the right to change the authorized representative. Specimen of the

signature of such new (if any) representative shall be introduced to the Local/Foreign Bank.

8.5 Delayed Payment

No financing charges shall be paid by the Employer to the Contractor under Sub-Clause 14.8 of

the General Conditions for foreign payments.




TARA

TARHE i i T h l i l

NISCO

Baft Steel Complex



9. Employer’s Financial Arrangements

The Employer shall not provide any evidence to that effect under Sub-Clause 2.4 [Employer’sFinancial Arrangement] of the General Conditions if such matter is against the law, regulations,

or his company policy.




TARA

TARHE i i T h l i l

NISCO

Baft Steel Complex



10. Independent Entity

Subject to the provisions of this Contract, this Contract is binding upon the Parties hereto onlyand does not bind the Government of Iran, any agency or instrumentality thereof. No seizure or

confiscation of Government of Iran property shall be permitted therefore.




TARA

TARHE i i T h l i l

NISCO

Baft Steel Complex



11. Separability of Provisions and Waiver

If any provision, in whole or in part, of this Contract should be found legally invalid, void orunenforceable by the provision of law or waived for any other reason, provided that such waiver,

invalidity, voidness and/or unenforceability does not affect the validity and/or execution of the

Contract wholly or substantially, the remaining provisions of this Contract shall not be affected

thereby, and the Parties hereto shall, by amendment to this Contract, promptly replace such

provision by a reasonable new provision which, as far as legally possible, shall approximate what

the Parties intended by such original provision to carry out their purposes.

No Party shall be deemed to have waived any right, power or privilege under this Contract or any

provision thereof unless such waiver is duly executed in writing and acknowledged by the Party

to be charged with such waiver.




TARA

TARHE i i T h l i l

NISCO

Baft Steel Complex



12. Observance of Local Laws and Respect of Local Customs

The Contractor shall respect and observe local laws, regulations, decisions and order and shallobey orders and instructions issued by local authorities.

The Contractor shall respect local customs, traditions and refrain from any conduct inconsistent

with or prejudicial to them. The Contractor shall also avoid any action, which can be prejudicial

to security and public order.




TARA

TARHE i i T h l i l

NISCO

Baft Steel Complex



13. Modification and Entirety of the Contract

This Contract shall constitute the entire agreement between the Parties hereto and supersedes all previous negotiations, commitments and writings with respect to the subject matter hereof and

may not be terminated, discharged, abandoned, canceled or modified in any manner except by

and instrument in writing signed by duly authorized representatives of each of Parties.




TARA

TARHE i i T h l i l

NISCO

Baft Steel Complex



14. Act of Non-Intervention in Government Transactions

By signing the Contract Agreement the Contractor maintains that he is in no way liable to fallunder or contravene the terms and conditions of Act of Non-Intervention in Government

Transactions passed on 22 Day 1337 (12 January 1959). The Contractor shall sign a written

undertaking to this effect which shall be an integral part of the Contract.




TARA

TARHE i i T h l i l

NISCO

Baft Steel Complex



15. Use Before Taking Over

If, by reason of any default on the part of the Contractor, Taking-Over certificate has not beenissued in respect of the Works within six Month after the Time for Completion or extended time

as the case may be, the Employer shall be at liberty to use the Works, in respect of which

Taking-Over Certificate has not been issued , provided that the Works, so used as aforesaid shall

be reasonably capable of being used and that the Contractor shall be afforded the earliest

possible opportunity of taking such steps as may be necessary to permit the issue of the Works

Taking-Over Certificate. Exercising above right by the Employer shall not in any way affect the

obligations of the Contractor under the Contract.




TARA

TARHE i i T h l i l

NISCO

Baft Steel Complex



16. Insurances

Insuring Party in this Contract is the Contractor.Evidence of insurance of the Works shall be submitted by the Contractor to the Employer before

any shipment is effected or any activity started at Site.

Insurance of risk listed in Subparagraph (c) of Sub-Clause 17.3 (Employer’s Risks) shall also be

in the Contractor’s scope of obligation under the Contract. Amount of deductible per occurrence

shall not exceed ten percent of insured occurrence amount.

Insurance of Foreign Supply shall be trough an Iranian insurance company approved by Central

Bank of Iran.




TARA

TARHE i i T h l i l

NISCO

Baft Steel Complex



17. Annexes to the Particular Conditions

The following documents are annexed to and form an integral part of these Particular Conditions:1. Affidavit concerning Business Activities

2. Declaration concerning the Act of Non-Intervention in Government Transactions

3. Declaration of full acceptance of tender

4. Form of Performance Security

5. Form of Advance Payment Guarantee

6. From of Retention Money Guarantee




TARA

TARHE i i T h l i l

NISCO

Baft Steel Complex



Annex 1

“Affidavit Concerning Business Activities”




TARA

TARHE i i T h l i l

NISCO

Baft Steel Complex



This AFFIDAVIT should be completed and subscribed and sworn by the Contractor before the

CONSUL IN IRAN OF THE CONTRACTOR’S OWN COUNTRY.

AFFIDAVIT concerning BUSINESS ACTIVITIES in IRAN

IRAN CITY OF ____________________________________________________________ )

EMBASSY OF ____________________________________________________________ )

_______________________________________________________, being first duly sworn,

Name _____________________________________________

deposes and says:

1. I am _________________________________________________________________ of

(Position)

_______________________________________________________________________

(Name of Company or the Contractor)

(the "Company"), having its principal place of business at ________________________

_________________________________________ , which proposes to engage in certain

(City and Country)

Business Activities (the "Business Activities"), whether or not including a written Contract,

with, for, or involving the Government of Iran (the "Government"), or a corporation or other

entity owned or controlled by the Government and I have personal knowledge of the facts

hereinafter referred to.

2. The Business Activities referred to in Paragraph 1 hereof consist of

________________________________________________________________________

(Describe nature of business and/or Contract)

________________________________________________________________________

_______________________________________________________________________

________________________________________________________________________

3. Affiant expressly affirms that it has made no payment , inside or outside Iran , and has no

contract, arrangement, or understanding to make such payment, to any third party (whether as

agent, consultant, finder, broker or otherwise) for which no commensurate services have been






TARA

TARHE i i T h l i l

NISCO

Baft Steel Complex



copy of this Affidavit, as signed, in the Record Book maintained by the Consulate in Iran and

to issue a certificate of recording in connection herewith.

_______________________________________

Signature of Affiant




TARA

TARHE i i T h l i l

NISCO

Baft Steel Complex



Annex 2

“Declaration Concerning

Act of Non-Intervention in Government

Transactions”

Dated 22 Dey 1337




TARA

TARHE i i T h l i l

NISCO

Baft Steel Complex



DECLARATION CONCERNING ACT OF NON-INTERVENTION IN GOVERNMENT

TRANSACTIONS (dated 22 DEY 1337)

In accordance with the attached interpretation of the Non-Intervention ACT We

.................................................. understanding the provisions of the above named Act undertake

to sign the following statement in the event of our being awarded the Contract and to observe in

full the implications of that Act during the period of tendering:

The Contractor states officially that he is not liable to the restriction mentioned in the Act dated

22 Dey 1337. If proved otherwise by National Iranian Steel Company, then National Iranian

Steel Company besides terminating the Contract, shall be empowered to encash the Contractor’s

deposit and guarantee. National Iranian Steel Company shall also assess at its discretion the

damages resulting from nullification and/or hold-up in the execution of the Contract and recover

these by drawing on the Contractor’s belongings.

The Contractor also covenants under no circumstances to take into partnership or share with any

of the individuals referred to in the Act any of the interests of the Contract until the completion

of the Contract and final settlement thereof. Failing which National Iranian Steel Company shall

be entitled to terminate the Contract, encash the Contractor’s guarantee and assess at its

discretion the losses arising from the cancellation and delay in execution of the Contract and

recover same from the Contractor’s properties.

The Contractor undertakes that if during the execution of the Contract any of his partners or

relatives of partners, directors or inspectors, supervisors and/or any of the partners referred to in

Note 1 of Article 1, the total of whose shares or interest and/or capital exceeds 20% shall attain

the position of a Minister or Assistant to the Minister and/or appointed to similar positions in the

National Iranian Steel Company, to report the matter to the National Iranian Steel Company at

once otherwise National Iranian Steel Company shall have the right to cancel the Contract.

In the event of failure on the part of the Contractor to report the case, National Iranian Steel

Company in addition to holding the power to cancel, shall be entitled to encash the Contractor’s

deposit and Letter of Guarantee, to assess directly the damages resulting from cancellation and

delay in execution of the Contract and to recover same from the Contractor’s properties.

Contractor __________________________________________________________________

By _______________________________ Signature ________________________________




TARA

TARHE i i T h l i l

NISCO

Baft Steel Complex



Title ______________________________________________________________________

Date ______________________________________________________________________

Address ___________________________________________________________________

INTERPRETATION OF NON-INTERVENTION ACT

DATED 22nd DEY 1337

In compliance with the Iranian Act, dated 22nd Dey 1337, the participation of the following

companies in government transactions is prohibited:

1. The companies which at least five percent of their stocks, capitals or returns belong to one, or

at least twenty percent of their stocks, capitals or returns belong to a few of the following

Iranian persons:

(a) Members of parliament

(b) Members of City Council

(c) Ministers

(d) Ambassadors

(e) Province Governors

(f) Employees of Government, Municipalities or affiliated organizations.

(g) Employees of banks or any organization with major portion or their stocks, capitals or

returns belonging to the Government, Municipalities or affiliated organizations.

(h) Persons who in a way receive salaries from Government Fund or Municipalities.

(i) Managers or employees of Social Aids corporation who are under financial support of

Government, Municipalities or affiliated organizations.

2. The companies which the major portion or their stocks, capitals or returns belong to the above-

mentioned companies.






TARA

TARHE i i T h l i l

NISCO

Baft Steel Complex






TARA

TARHE i i T h l i l

NISCO

Baft Steel Complex



Annex 4

“Form of Performance Security”




TARA

TARHE i i T h l i l

NISCO

Baft Steel Complex



Bank Guarantee Number _____________

On a request made by (*) _________________________________________________________

in connection with Contract for Baft DR & Material Handling Plant Project of National

Iranian Steel Company (whom the Contract defines as the Employer) dated

__________________ concluded between the aforesaid (*) _____________________

(hereinafter called the “Principal”) and National Iranian Steel Company (hereinafter called the

“Beneficiary”), and with a view to secure the good execution of the obligations deriving from the

above mentioned Contract; With a view also to consolidate the obligations therein undertaken by

the Principal.

This bank does hereby irrevocably and unconditionally undertake the following:In case and whenever the Beneficiary makes a claim to the effect that the Principal has somehow

derogated from any of the obligations undertaken by him under the aforementioned Contract;

this bank shall be bound to pay the Beneficiary (or on its order), any amount of money not

exceeding Euro .that may be claimed by the latter and at its discretion.

Such payment shall be made immediately upon receipt of the first intimation in writing whereby

this bank will be informed of such facts; and without there being any need for the

abovementioned interested party to issue any writ or official warrant in support of his claims; nor

to proceed with any further action through administrative or judicial channels; nor through any

other authority in order to prove the merits of such claims; nor shall he be bound to produce any

arguments or evidences in support of same. The present guarantee shall be valid until the closing

hour on (the date 70 days after the expected expiry of the Defects Notification Period for the

Works) ___________________ but may be extended on a request made by the Beneficiary for

any duration of time as indicated by same.

In case the bank is reluctant, or not in a position to extend the present Guarantee; or if the

Principal fails to create favorable circumstances for the extension of same prior to the expiration

of the aforementioned period of time, or if he fails to obtain from the bank an extension of the

guarantee, the bank shall be bound, in all such cases; to pay the Beneficiary (or its Locum

Tenens) the aforementioned amount without there being any need for the interested party to

claim same anew.

Date _______________ Bank’s Authorised Signature _________________




TARA

TARHE i i T h l i l

NISCO

Baft Steel Complex



Annex 5

“Form of Advance Payment Guarantee”




TARA

TARHE i i T h l i l

NISCO

Baft Steel Complex



We refer to the Contract concluded between National Iranian Steel Company (whom the

Contract defines as the Employer), Tehran/Iran, and …………… on ………… in …………….

for Baft DR & Material Handling Plant Project of National Iranian Steel Company

(hereinafter called the “Beneficiary”) with its principal office at 4th

floor, north tower, No.685,

Valiasr Ave., Tehran, Iran.

We have been informed that ……………………. (hereinafter called the “Principal”) is your

contractor under such Contract and wishes to receive an advance payment, for which the

Contract requires him to obtain a guarantee.

At the request of the Principal, we (name of bank) ……………………. hereby irrevocably and

unconditionally undertake to pay you, the Beneficiary/Employer, any sum or sums not exceedingin total the amount of ………………. (the “guaranteed amount”, say: ……………..) upon

receipt by us of your demand in writing stating that the Principal has failed to fulfil its

obligations under Contract.

The amount of this guarantee shall be reduced by the amounts of the advance payment repaid to

you, as evidenced by your notices issued under sub-clause 14.6 of the General Conditions.

Following receipt (from the Principal) of a copy of each purported notice, we shall promptly

notify you of the revised guaranteed amount accordingly.

Any demand for payment must contain your signature(s) which must be authenticated by your

bankers or by a notary public. The authenticated demand must be received by us at this office on

or before (the date 70 days after the expected expiry of the Time for Completion) …………..

(the “expiry date”), when this guarantee shall expire and shall be returned to us.

We have been informed that the Beneficiary may require the Principal to extend this guarantee if

the advance payment has not been repaid by the date 28 days prior to such expiry date. We

undertake to pay you such guaranteed amount upon receipt by us, within such period of 28 days,

of your demand in writing that the Principal has failed to fulfil its obligations under the Contract

and that this guarantee has not been extended.

This guarantee shall become effective upon receipt of the advance payment by the Principal and

shall be governed by the laws of Iran.





TARA

TARHE i i T h l i l

NISCO

Baft Steel Complex



Annex 6

“Form of Retention Money Guarantee”




TARA

TARHE i i T h l i l

NISCO

Baft Steel Complex



We refer to the Contract concluded between National Iranian Steel Company (whom the

Contract defines as the Employer), Tehran/Iran, and …………… on ………… in …………….

for Baft DR & Material Handling Plant Project of National Iranian Steel Company

(hereinafter called the “Beneficiary”) with its principal office at 4th

floor, north tower, No.685,

Valiasr Ave., Tehran, Iran.

We have been informed that ……………………. (hereinafter called the “Principal) is your

contractor under such Contract and wishes to receive early payment of [part of] the retention

money, for which the Contract requires him to obtain a guarantee.

At the request of the Principal, we (name of bank) ……………………. hereby irrevocably and

unconditionally undertake to pay you, the Beneficiary/Employer, in case and whenever theBeneficiary makes a claim to the effect that the Principal has somehow derogated from any of

the obligations undertaken by him under the aforementioned Contract, any sum or sums not

exceeding in total the amount of ………………….(the “guaranteed amount”,

say………………………………..) upon receipt by us of your demand in writing.

Such payment shall be made immediately upon receipt of the first intimation in writing whereby

this bank will be informed of such facts; and without there being any need for the Beneficiary to

issue any writ or official warrant in support of his claims; nor to proceed with any further action

through administrative or judicial channels; nor through any other authority in order to prove the

merits of such claims; nor shall he be bound to produce any arguments or evidences in support of

same.

Any demand for payment must contain your signature(s) which must be authenticated by your

bankers or by a notary public. The authenticated demand must be received by us at this office on

or before (the date 70 days after the expected expiry of the Defects Notification Period for the

Works) ……………………..,(the” expiry date”), when this guarantee shall expire and shall be

returned to us.

We have been informed that the Beneficiary may require the Principal to extend this guarantee if

the Performance Certificate under the Contract has not been issued by the date 28 days prior to

such expiry date. In case the bank is reluctant, or not in a position to extend the present

guarantee; or if the Principal fails to create favourable circumstances for the extension of same

before such period of 28 days, or if he fails to obtain from the bank an extension of the

guarantee, the bank shall be bound, in all such cases; to pay the Beneficiary (or its Locum



TARA

TARHE i i T h l i l

NISCO

Baft Steel Complex



Tenens) the aforementioned amount without there being any need for the interested party to

claim same anew.
