National Iranian Steel Co.

Baft Steel Complex

DR & Material Handling Plant

Project

Contract Agreement

NISCO
Baft Steel Complex

DR & Material Handling Plant Project

TARA TARH

Engineering & Technological Co.

Contract Agreement

Page 1 of 1

CONTRACT AGREEMENT
Clause

1
2
3
3.1
3.2
4
5
6
7
8

Page

Preamble
Words and Expressions
Contract Documents
Covenants for Performance of the Works

1
2
2
4
4
4
4
5
5
5
5
7

The Contractor
The Employer
Contract Price
Effective Date of the Contract
Commencement Date
Time for Completion
Duration of the Contract
Annex 1: Power of Attorney

Table of Contents

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17-Sep-07

Rev 0

NISCO

DR & Material Handling Plant Project

TARA
TARH

Contract Agreement

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Baft Steel Complex

&T h l i l

THIS CONTRACT has been concluded on under number ...

BETWEEN
(1) National Iranian Steel Company with its principal office at No.685, Valiasr Ave., Tehran,
Iran, hereinafter in this Contract referred to as the Employer represented by Mr.
Mohammad Rahim Rasti on one part and
(2) ........ Consortium hereinafter referred to as the Contractor, consisting of
i

.... a company existing under the laws of .... registered in the

registration office in .... under No. ...., dated .... having its
principal office in ........, represented by ......; and

...., a company existing under the laws of ...., registered in the

registration office in .... under No. ...., dated .. having its
principal office in ......, represented by Messers ...... acting as
Consortium Leader,

who are legally authorized to sign this Contract by virtue of Power of Attorney attached
hereto as Annex 1, on the other part.
Consortium members shall be individually, jointly, and severally liable to the Employer for
fulfillment of all Contractors obligations under this Contract.

WHEREAS:
(A) concerning provincial steel plans of Iranian Government, the Employer intends to establish
a new steel complex at Baft, Iran;
(B) the Contractor has agreed to construct a direct reduction plant and raw material receiving
and handling plant at Baft Steel Complex as specified in the Employers Requirements;
(C) the Contractor has thoroughly visited and inspected the Site and has acquired complete
knowledge and sufficient information about the Site and is thoroughly familiar with battery
limits, environmental conditions, available manpower and their level of expertise and any
other matter which in any way affects the design and execution of Contract and its related
costs;

Contract No.:

Doc No.: TA-143-D00-G-TD002

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NISCO

DR & Material Handling Plant Project

TARA
TARH

Contract Agreement

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Baft Steel Complex

&T h l i l

(D) the Contractor has visited various local (Iranian) manufacturing workshops and has
concluded that with their organization, manpower, facilities and equipment, the local
manufacture of equipment destined for Local Supply is feasible both from quality and
delivery time schedule points of view;
(E) the Contractor is the owner of the offered process (if any) and/or entitled to grant licence
on behalf of process owner for design, construction and operation of the Plant;
(F) Contractor has thoroughly studied and examined the Contract Documents and fully
informed themselves as to all the condition and matters which can in any way affect the
Works and the cost thereof;
(G) the Contractor has sufficient experience, capability, skills, competence, and know-how in
design, engineering, supply, construction, erection, and commissioning and operation of
similar plants of the size and complexity as required by the Employer;
This Preamble is an integral part of this Contract Agreement.

NOW, THEREFORE, it is hereby agreed by and between the Parties as follows:

1. Words and Expressions

In this Agreement, words and expressions shall have the same meanings as are respectively
assigned to them in the General Conditions hereinafter referred to.

2. Contract Documents
The documents comprising the Contract shall be:
a) this Contract Agreement and its related Annex
b) the Particular Conditions and its related Annexes
c) the General Conditions
d) the Employers Requirements and its related Annexes consisting of:
(i)

Annex I; Plant Specification and Data Sheets

(ii) Annex II; Engineering Standards, Fluid Systems

(iii) Annex III; Engineering Standards, Electrical
(iv) Annex IV; Engineering Standards, Instrumentation and Control

Contract No.:

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NISCO
Baft Steel Complex

DR & Material Handling Plant Project

TARA
TARH

Contract Agreement

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&T h l i l

(v) Annex V; Engineering Standards, Material Handling Systems

(vi) Annex VI; Engineering Standards, General
(vii) Annex VII; Engineering Standards, Packing, Marking and Forwarding
e) the Time Schedule
f) the Tender
g) the Schedules of Prices and Price Breakdown

3. Covenants for Performance of the Works

3.1 The Contractor
In consideration of the payments to be made by the Employer to the Contractor as hereinafter
mentioned, the Contractor hereby covenants with Employer to design, procure, execute, and
complete the Works and remedy any defects therein in conformity with the provisions of the
Contract.

3.2 The Employer

The Employer hereby covenants to pay the Contractor, in consideration of the design,
procurement, execution and completion of the Works and the remedying of defects therein, the
final Contract Price at the times and in the manner prescribed by the Contract.

4. Contract Price
The total Contract Price is the sum of Euro .. .. (
..............)
as Foreign Portion and IRR ...... (
..................)
as Iranian Portion of the Contract Price including IRR ...... (
.............................)
as estimated price of adjustable portion of civil construction works. The Contract Price, except
for civil construction works prices, is fix, firm and not subject to any escalation of any nature
throughout the Contract duration. The breakdown of the Contract Price is according to the
Schedule of Prices and Price Break Down (Document B).

Contract No.:

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NISCO

DR & Material Handling Plant Project

TARA
TARH

Contract Agreement

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Baft Steel Complex

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5. Effective Date of the Contract

This Contract shall come into full force and effect on the date when all of the conditions
hereunder are fulfilled i.e.:
a) signing the Contract Agreement by the both Parties hereto;
b) receipt by the Employer, notification from the Contractor that all necessary approvals of
the competent authorities to execute the Contract have been granted;
c) receipt by the Contractor, notification from the Employer that all necessary approvals,
permissions or authorization of the competent Iranian authorities have been granted;
d) receipt by the Employer of Performance Security as per Annex No. 3 to Particular
Conditions;
e) receipt by the Contractor of letter of credit as per Sub-Clause 8.4 of Particular
Conditions;

6. Commencement Date
The Commencement Date shall be seven (7) days after Effective Date of the Contract. The
Contractor shall affect the delivery of the supplies and implementation of all services to be
rendered under this Contract in accordance with the Time Schedule. The Commencement Date is
the reference date for the Time Schedule.

7. Time for Completion

The time for completion of the Works shall begin from Commencement Date of the Contract and
shall terminate at the date of issuance of Taking-Over Certificate subject to provisions of Clause
10 [Employers Taking Over] of the General Conditions which shall occur 30 month after
Commencement Date.

8. Duration of the Contract

The Contract shall begin from Effective Date of the Contract and shall terminate at the date of
issuance of Performance Certificate subject to provisions of Sub-Clause 11.9 [Performance
Certificate] of the General Conditions except any obligation remains unperformed at that time as
provided in Sub-Clause 11.10 [Unfulfilled Obligations] of General Conditions.

Contract No.:

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17-Sep-07

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NISCO

DR & Material Handling Plant Project

TARA
TARH

Contract Agreement

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Baft Steel Complex

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IN WITNESS whereof each of the Parties has caused this Contract Agreement to be executed in
more than one copy each of which is deemed to be an original as of the day and year first above
written.

SIGNED by:

SIGNED by:

Mohammad Rahim Rasti

for and on behalf of the Employer

for and on behalf of the Contractor

in the presence of

in the presence of

Witness:

Witness:

Name: Ahmad Aminfar

Name:

Title: Planning & Development Manager

Title:

Contract No.:

Doc No.: TA-143-D00-G-TD002

17-Sep-07

Rev 0

NISCO
Baft Steel Complex

DR & Material Handling Plant Project

TARA
TARH

Contract Agreement

Page 7 of 7

&T h l i l

Annex 1

Power of Attorney

Contract No.:

Doc No.: TA-143-D00-G-TD002

17-Sep-07

Rev 0