Acacia Cellulose International Sdn Bhd

Acacell Pulp Mill Project

Sarawak, Malaysia

Engineering, Procurement
& Construction Contract

23-11-2012/JOH
1 EPC Contract
Engineering, Procurment & Construction Contract

1. GENERAL PROVISION
2. THE EMPLOYER
3. THE EMPLOYER’S ADMINISTRATION
4. THE CONTRACTOR
5. DESIGN
6. STAFF AND LABOUR
7. PLANT, MATERIALS AND WORKMANSHIP
8. COMMENCEMENT, DELAYS AND SUSPENSION
9. OPERATION TEST RUN AND TESTS BEFORE
TAKING-OVER
10. EMPLOYER’S TAKING-OVER
11. DEFECTS LIABILITY
12. TESTS AFTER COMPLETION
13. VARIATION AND ADJUSTMENTS
14. CONTRACT PRICE AND PAYMENT
15. TERMINATION BY EMPLOYER
16. SUSPENSION AND TERMINATION BY CONTRACTOR
17. RISK AND RESPONSIBILITY
18. INSURANCE
19. FORCE MAJEURE
20. CLAIMS DISPUTES AND ARBITRATION

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2 EPC Contract
SCHEDULE 1

• Employer’s Representative name and address

• Time for Completion
• Defects Notification Period
• Electronic transmission systems
• Time for access to the Site
• Performance Bond
• Commencement Date
• Liquidated and ascertained damages for the Works
• Maximum amount of liquidated damages (total,
cumulative and aggregate)
• Total advance payment
• Currencies of payment
• The rates of exchange
• Terms and Type of insurance
• Periods for submission of insurance:
• (a) evidence of insurance
• (b) relevant policies
• Amount of third party insurance
• Composition of Dispute Adjudication Board (DAB)
• Appointing entity or official

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APPENDIX 1 - EMPLOYER’S REQUIREMENTS

I. Agreed Amendments and Deviations from

the Request for Proposal (RFP)
Documentation
NOTE: (agreed Amendments and Deviations are
identified on a separate page in accordance with
the structure of the RFP Documentation)

II. MCC’s TECHNICAL PROPOSAL, 02-04-2012

and Metso “as-sold” technical Proposal
(initialled 10-01-2012)
APPENDIX 1 - EMPLOYER’S REQUIREMENTS

III. The Employer’s Project Requirements

1. The Testing and Take-over Point Procedures and

Taking-over Criteria (16IPP1372-C0007 Rev. B)
2. Certificate Models
– End of Erection
– Completion
– Taking-over
– Acceptance
– End of Defects Liability Period
3. Employer’s Description and Requirements to Scope
of Work
– VOLUME I - Technical Specifications for EPS Supplier
Areas (by Metso)
– VOLUME II - Technical Specifications for BOP Areas
– VOLUME III - Technical Specifications for Millwide
Systems and Auxiliary Equipment
– VOLUME IV - Standards and Technical Specifications
– VOLUME V - Technical Specifications for Installation
– VOLUME VI - Civil and Structural Works
– VOLUME VII – Not applicable
– VOLUME VIII – Services
– VOLUME IX - Typical Drawings

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APPENDIX 1 - EMPLOYER’S REQUIREMENTS

4. Project Time Schedule

– Instructions for Time Scheduling and Progress Reporting
– Contract Control Schedule (by Contractor)
– Contractor’s Detailed Time Schedules (by Contractor)
– Contractor’s Manpower Schedule (by Contractor)
5. Documentation Regulations and Time Schedule
– Engineering and Technical Documentation
– Managing of Instructions, Technical Documents and Data
– Operation and Maintenance Instructions
– General Instructions for Contractor´s Training Services
6. Insurance Cover (by Contractor)
7. Not used
8. Specification for Internal and External Environment
– Quality Assurance Requirements
– Contractor's Quality Assurance Plan (by Contractor)
– Project Environmental Policy and Targets
– Occupational Health and Safety Management
– Contractor's Occupational Health and Safety Plan (by
Contractor)
– List of Subcontractors (by Contractor)

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APPENDIX 1 - EMPLOYER’S REQUIREMENTS

9. Indexation (by Contractor)

10.Exchange Rate Adjustment (by Contractor)
11.Regulations Regarding Malaysian Occupational Health
and Safety Standards (to be submitted at the later
date)
12.Not used
13.Marking and Transportation of Machinery, Equipment
and Goods (to be submitted at the later date)
14.Contact Personnel, Project Supervisors and Project
Managers
– Employer’s Project Organisation (to be submitted at the
later date)
– Contractor’s Project Organisation (by Contractor)
15.Not used
16.Not used (ref. Appendix 9)
17.Administrative Requirements
– Overall Project Implementation Plan / Contractor's ”Project
Book” (by Contractor)

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APPENDIX 2 – FORM OF PERFORMANCE BOND

Export-Import Bank of China

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APPENDIX 3 – FORM OF WARRANTY BOND

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APPENDIX 4 – OPERATION TEST RUN
CONDITIONS

After the Start-Up of all Process Areas have been accepted,

the Test Run ( three-shift work) shall be started at the
responsibility of the Contractor and under his supervision.

The four (4) weeks Test Run period shall take place within
ninety (90) days following issuance of the last Certificate of
Start-Up Acceptance. Within the aforesaid timeframe the
Contractor is entitled to utilise the period before start of the
Test Run for tuning and adjustments at full discretion of the
Contractor.

The Operation Test Run period will be four (4) weeks during
which time the seventy-two (72) hours uninterrupted Fiberline
Capacity Test Run shall take place according to criteria specified
in Appendix 5.

OPERATION TEST RUN

During the four weeks Operation Test Run period the average
production measured at the baling lines of the Pulp Dryer shall
be at least seventy percent (70 %) of the Fiber Line design rate
(2 700 ADt/d).

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APPENDIX 4 – OPERATION TEST RUN
CONDITIONS

During the Operation Test Run period, excluding the Fiber Line
Capacity Test Run period, an unlimited number of interruptions
attributable to the Contractor are permitted. There are neither
any limitations regarding the durations of the interruptions.
Should the average production requirement (52 920 ADt) during
the Operation Test Run be not fulfilled the verification period will
be shifted ahead until the requirement is met. However, the
Operation Test Run shall be carried out within six (6) months
from the Start-Up of the Plant.

The Parties shall not less than one (1) month prior to the
scheduled Operation Test Run, draw up an advance plan for
carrying out the Operation Test Run of the Plant. Requirement
of material and personnel for the Operation Test Run shall be
defined in the plan in detail.

The Contractor shall ensure adequate and correct instructions

relating to the operation of the Plant has been made available
to the Employer’s operating and maintenance personnel prior to
and during the Operation Test Run, so that the Plant under the
supervision and instructions of the Contractor can be properly
and safely operated by the Employer’s operators and no
unnecessary damage will occur during the said period. The
Contractor shall also supply the First Fill for the operation of the
Plant for the Operation Test Run.

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 APPENDIX 5 – FIBER LINE CAPACITY TEST RUN
CONDITIONS

During the seventy-two hours uninterrupted Fiber Line Capacity

Test Run period the average production measured at the baling
lines of the Pulp Dryer shall be at least seventy percent (75 %) of
the Fiber Line design rate (2 700 ADt/d) representing 6 025 Adt
production. During the Fiber Line Capacity Test Run period
interruptions at the baling lines attributable to the Contractor are
not permitted.

After the Operation Test Run and Fiber Line Capacity Test Run
has been accepted, a Taking-Over Certificate will be issued.
The Taking-Over Certificate means minutes prepared by the
Contractor and signed by the Employer in accordance with the
Employer’s Requirements, confirming that the requirements
stipulated for Taking-Over have been met and list possible faults
and defects still detected in the Plant and that the Plant has been
taken over in accordance with the EPC Contract. Faults and
defects (category 3 items on the Punch List) that are not decisive
for the normal Continuous Commercial Operation of the Plant
shall not prevent the signing of the inspection minutes and the
approval of the Fiber Line Capacity Test Run provided that the
Contractor agrees to rectify the faults and defects listed in the
minutes as soon as possible or within an agreed time.

The test procedures and test methods to verify the successful

completion of the Fiber Line Capacity Test will be defined by both
Parties at least two (2) months before the test.
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APPENDIX 6 – PERFORMANCE GUARANTEES
AND DAMAGES FOR FAILURE TO
MEET

EPS PACKAGES
1.Woodhandling Plant (Metso)
2.Cooking Plant (Metso)
3.Fiberline (Metso)
4.Pulp Dryer (Metso)
5.Evaporation (Metso)
6.Recovery Boiler (Metso)
7.Power Boiler (Metso)
8.Recausticizing (Metso)
9.Lime Kiln (Metso)

EPS PACKAGES (BOP)

1.Water Treatment Plant (MCC)
2.Effluent Treatment Plant (MCC)
3.Turbogenerator 1 (MCC)
4.Turbogenerator 2 (MCC)
5.Chloralkali Plant (MCC)
6.Chlorine Dioxide Plant (MCC)
7.Oxygen Plant (MCC)

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APPENDIX 7 – PERFORMANCE TEST
PROCEDURES AND PROTOCOL

EPS PACKAGES
1.Woodhandling Plant (Metso)
2.Cooking Plant (Metso)
3.Fiberline (Metso)
4.Pulp Dryer (Metso)
5.Evaporation (Metso)
6.Recovery Boiler (Metso)
7.Power Boiler (Metso)
8.Recausticizing (Metso)
9.Lime Kiln (Metso)

EPS PACKAGES (BOP)

1.Water Treatment Plant (MCC)
2.Effluent Treatment Plant (MCC)
3.Turbogenerator 1 (MCC)
4.Turbogenerator 2 (MCC)
5.Chloralkali Plant (MCC)
6.Chlorine Dioxide Plant (MCC)
7.Oxygen Plant (MCC)

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APPENDIX 8 – FORM OF ADVANCE PAYMENT
GUARANTEE

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15 EPC Contract
APPENDIX 9 – SCHEDULE OF PAYMENTS

– Schedule of Prices (by Contractor)

– Matrix of Milestone Payments (by Contractor)
– Prices for Options and Validity Time (by Contractor)
a. Add-on prices
b. Take-out prices
c. Unit prices
– Indexation (by Contractor)
– Exchange Rate Adjustment (by Contractor)
– List of Imported Goods (by Contractor)
– Invoicing Instructions (to be submitted at the later
date)
– Change Order Procedure (by Acacell)

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APPENDIX 10 – DISPUTE ADJUDICATION
AGREEMENT

1. Definitions
2. General Provisions
3. Warranties
4. General Obligations of the Member
5. General Obligations of the Employer and the
Contractor
6. Payment
7. Default of the Member
8. Default of the Member

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APPENDIX 11 – PROCESS AREAS

Water Treatment Plant (812)

Demineralised Water and
Condensate Treatment Systems
(731)
Effluent Treatment Plant (821)
Woodyard (100)
Cooking Plant (211)
Fiberline (200)
Drying Machine (300)
Evaporation Plant (411)
Recovery Boiler (421)
Recausticizing Plant (431)
Lime Kiln (441)
Power Boiler (711)
Turbogenerator 1 (721)
Turbogenerator 2 (722)
Chloralkali Plant (511)
Chlorine Dioxide Plant (521)
Oxygen Plant (531)
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