3.

CONDITIONS OF CONTRACT

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CONDITIONS OF CONTRACT
The Conditions of Contract comprises two parts: (a) (b) General Conditions of Contract, and Conditions of Particular Application.

CONDITIONS OF CONTRACT The Conditions of Contract comprise the "General Conditions", which form part of the "Conditions of Contract for Construction" First Edition 1999 published by the Fdration Internationale des Ingnieurs-Conseils (FIDIC), and the following "Particular Conditions" which include amendments and additions to such General Conditions.

These General Conditions are not attached but can be purchased by the Tenderer from FIDIC Secretariat P.O. Box 86 CH-1000 Lausanne 12 Switzerland Facsimile: +41 21 653 5432 Telephone: +41 21 654 4411 E-mail Website fidic@pobox.com http://www.fidic.org

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PARTICULAR CONDITIONS

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CONTENTS
PAGE Ch=4

1 CLAUSE 1 GENERAL PROVISIONS...................................................5 2 CLAUSE 3 THE ENGINEER................................................................6 3 CLAUSE 4 THE CONTRACTOR.........................................................6 4 CLAUSE 6 STAFF AND LABOUR.......................................................7 5 CLAUSE 13 VARIATIONS AND ADJUSTMENTS...............................7 6 CLAUSE 14 CONTRACT PRICE AND PAYMENT..............................9 7 CLAUSE 15 TERMINATION BY EMPLOYER...................................10

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1 1.1

CLAUSE 1 Sub-Clause 1.1

GENERAL PROVISIONS Definitions

1.1.1 The Contract IN SUB-CLAUSE 1.1.1.4 ADD "as included in Section 8," AFTER "Letter of Tender," IN SUB-CLAUSE 1.1.1.9 REPLACE "which are appended to" WITH "which are included in Section 8". IN SUB-CLAUSE 1.1.1.10 ADD THE FOLLOWING SENTENCE: "The word Schedule of Quantities is synonymous with Bill of Quantities." 1.1.4 Money and Payment IN SUB-CLAUSE 1.1.4.10 ADD THE FOLLOWING PARAGRAPH: "Where sums are stated in the Schedules of Quantities for covering the Prime Cost for goods or material to be supplied under this Contract, the amount to be paid shall be determined in terms of paragraph (b) of Sub-Clause 13.5 Provisional Sums." 1.1.5 Works and Goods IN SUB-CLAUSE 1.1.5.5 ADD THE FOLLOWING: "Notwithstanding the primary definition of 'Section' as defined, where the context of the Contract Documents so permits, 'Section' shall also mean a specific part of the Contract Documentation." 1.2 Sub-Clause 1.6 Contract Agreement

REPLACE THE SECOND SENTENCE: The Contract Agreement WITH THE FOLLOWING The Contract Agreement shall be based on the forms included in Section 9 of the Document." 1.3 Sub-Clause 1.8 Care and Supply of Documents

IN THE FIRST PARAGRAPH, REPLACE "and of each subsequent Drawings cost of the Contractor." WITH "excluding the Drawings. The Contractor shall however be issued with one 0,05 mm thick transparent polyester print of each Drawing free of charge." ADD THE FOLLOWING SUB-CLAUSE 1.15: 1.4 "Sub-Clause 1.15 Details to be Confidential "The Contractor shall treat the details of the Contract as private and confidential, except to the extent necessary to carry out obligations under it or to comply with applicable Laws. The Contractor shall not publish, permit to be published, or disclose any particulars of the Works in any trade or technical paper or elsewhere without the previous agreement of the Employer."

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2 2.1

CLAUSE 3 Sub-Clause 3.1

THE ENGINEER Engineer's Duties and Authority

"The Engineer shall obtain the specific approval of the Employer before taking action under the following Sub-Clauses of these Conditions: (a) (b) (c) (d) (e) Sub-Clause 4.12 certify additional cost under unforeseeable physical conditions, Sub-Clause 10.1 Taking Over of the Works and Sections, Sub-Clause 10.2 Taking over of Parts of the Works, Sub-Clause 12.3 Evaluation, Sub-Clause 13.1 Right to vary, (i) (ii) (f) in an emergency situation, as reasonably determined by the Engineer; or if such variation would increase the Contract Price by less than R25 000,00; or

Sub-Clause 8.4 determining Extension of Time for Completion."

ADD THE FOLLOWING SUB-CLAUSE: 2.2 Sub-Clause 3.6 Management Meetings

"The Engineer or the Contractor's Representative may require the other to attend a management meeting in order to review the arrangements for future work. The Engineer shall record the business of management meetings and supply copies of the record to those attending the meeting and to the Employer, in the record, responsibilities for any actions to be taken shall be in accordance with the Contract."

3 3.1

CLAUSE 4 Sub-Clause 4.2

THE CONTRACTOR Performance Security

REPLACE ", and shall be in the form annexed to the Particular Conditions" IN THE SECOND PARAGRAPH WITH ", and shall be in the form included in Section 10 of the Document." AT THE END OF THE SECOND PARAGRAPH OF SUB-CLAUSE 4.2, INSERT: "If the Performance Security is in the form of a bank guarantee, it shall be issued either (a) by an institution registered in South Africa, or (b) directly by a foreign institution licensed to do business in the country and acceptable to the Employer." 3.2 Sub-Clause 4.3 Contractor's Representative

AT THE END OF SUB-CLAUSE 4.3, ADD: "If the Contractor's Representative, or these persons, is not fluent in English, the Contractor shall make a competent interpreter available during all working hours."

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3.7 ADD NEW SUB-CLAUSE 4.25: 3.3 "Sub-Clause 4.25 Bribes If the Contractor or any of his Subcontractors, agents or servants offers to give or agrees to offer or give to any person, any bribe, gift, gratuity or commission as an inducement or reward for doing or forbearing to do any action in relation to the Contract or any other contract with the Employer or for showing or forbearing to show favour or disfavour to any person in relation to the Contract or any other contract with the Employer, then the Employer may enter upon the Site of the Works and terminate the employment of the Contractor and the provisions of Clause 15 hereof shall apply as if such entry and termination had been made pursuant to that Clause.

4 4.1

CLAUSE 6 Sub-Clause 6.1

STAFF AND LABOUR Engagement of Staff and Labour

DELETE "Except as otherwise stated in the Specifications," AND REPLACE "the" WITH "The" IN THE FIRST LINE. 4.2 Sub-Clause 6.8 Contractor's Superintendence

INSERT AT THE END OF SUB-CLAUSE 6.8: "A reasonable proportion of the Contractor's superintending staff shall have a working knowledge of English or the Contractor shall have a sufficient number of competent interpreters available on Site during all working hours." ADD THE FOLLOWING NEW SUB-CLAUSE 6.12: 4.3 "Sub-Clause 6.12 Alcoholic Liquor or Drugs The Contractor shall not, otherwise than in accordance with the Statutes, Ordinances and Government Regulations or Orders for the time being in force, import, 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, staff or labour."

5 5.1

CLAUSE 13 Sub-Clause 13.8

VARIATIONS AND ADJUSTMENTS Adjustment for Changes in Cost

REPLACE THE ENTIRE CONTENTS OF THIS SUB-CLAUSE WITH THE FOLLOWING: Subject to the provisions of the Contract, the values, to the extent which the Engineer considers these to be due and payable in terms of the Contract, of statements submitted in terms of Sub-clause 14.3 of the General Conditions and excluding the value of the special materials, if any, specified in the Contract shall be increased or decreased by applying a Contract price adjustment factor calculated according to the formula and conditions set out hereunder. Price adjustments for variations in the costs of special materials specified in the Contract shall be made in the manner set out in Sub-clause 13.9. Contract price adjustment schedule (i) Contract price adjustment factor The value of each statement (excluding adjustments under these Particular Conditions and the value of the special materials referred to in Sub-clause 13.9
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3.8 submitted in terms of Sub-clause 14.3 of the General Conditions shall be increased or decreased by the amount obtained by multiplying "Ac", defined in Sub-clause 13.8(ii), by the contract price adjustment factor determined according to the formula: (1 - x) (a Lt P M F + b t + c t + d t - 1) Lo Po Mo Fo

in which the symbols have the following meanings : "x" is the proportion of "Ac" not subject to adjustment. The value of x shall be 0,15. "a", "b", "c" and "d" are the coefficients determined by the Engineer and stated in the Appendix to Tender, and are deemed, irrespective of the actual constituents of the work, to represent the proportionate values of labour, plant, materials (other than special materials referred to in Sub-clause 13.9) and fuel respectively. The arithmetical sum of "a", "b", "c" and "d" shall in all cases be unity. "L" is the "Labour Index" and shall be the "Consumer Price Index" for the urban area specified in the Appendix to Tender, as published in the Statistical Release P0 141.1, Table 21, of Statistics South Africa. "P" is the Plant Index and shall be the "Civil Engineering Plant Index" as published in the Statistical New Release P0142.1 (PPI), Table 16 of Statistics South Africa. "M" is the Materials Index and shall be the "Civil Engineering Materials Index", as published in the Statistical News Release P0142.1 (PPI), Table 15 of the Statistics South Africa. "F" is the fuel index, and shall be the pump price of diesel fuel at Ondangwa. The suffix "o" denotes the basic indexes applicable to the base month. The base month shall be the month prior to the month in which the closing date for the tender falls. The suffix "t" denotes the current indexes. The current indexes are applicable to the month in which the last day of the period falls to which the relevant certificate of payment relates. If any index relevant to any particular certificate is not known at the time the value of the certificate is calculated, the Engineer shall estimate the value of such index. Any correction that may be necessary shall be made by increasing or decreasing the subsequent monthly payments to the Contractor. (ii) In order to calculate the adjustment in the value of the relevant certificates, the amount "Ac" shall be determined by the formula Ac = T-S-D-E-G-Ap. The symbols in the formula have the following meanings: "T" is the total value of preliminary and general items, work done and materials on site as certified in the certificate under consideration, before the deduction of any retention moneys or penalties and before any adjustment made in terms of this schedule. "S" is the aggregate of (a), (b) and (c) included in "T" and having the following meanings: (a) the amounts actually expended and substituted for any prime cost sums (b) the value of any work done against provisional sums

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3.9 (c) the value of any extra or additional work where special arrangements were made for price adjustments in respect of such work and recorded at the time the work was ordered. "D" is the value of work included in "T" and done at new rates fixed in terms of Subclause 12.3 of the General Conditions, where such rates are not based on labour, plant or materials costs in force at the time of tendering. Generally new rates may be based on current costs and de-escalated to the base month, in which case work done at these rates shall not be included in the value "D". "E" is the amount included in "T" and paid for any day work executed at cost plus percentage allowances, as set out in Sub-clause 13.6 of the General Conditions. "G" is the amount included in "T" for materials classified and dealt with as "special materials" in terms of Sub-clause 13.9. "Ap" is the sum of all "Ac" amounts determined in terms of this Sub-clause for all certificates preceding in time the certificate under consideration." ADD THE FOLLOWING NEW SUB-CLAUSE 13.9: 5.2 "Sub-Clause 13.9 Adjustment for Special Materials Price adjustments for variations in the costs of special materials specified in the Appendix to Tender shall be made as follows: (a) The price of every special material referred to above shall be increased or reduced by the net amount of any variation occurring after the date of the tender, on the basis set out in the Contract provided that any claim for adjustment in terms hereof shall be substantiated by the submission of acceptable invoices and other supporting documents that may be required by the Engineer for that purpose. For the purposes of paragraph (a) the "net amount of any variation" in respect of a particular material referred to as a special material hereof shall be calculated by multiplying the difference between the rate or price as stated by the Contractor for that material in the Contract, and the corresponding rate or price actually paid by the Contractor for that material, by the quantity of material concerned. The rates and prices stated in the Contract by the Tenderer for special materials shall include all applicable taxes and duties and transport to site."

(b)

6 6.1

CLAUSE 14 Sub-Clause 14.3

CONTRACT PRICE AND PAYMENT Application of Interim Payment Certificate

REPLACE THE WORD "six" IN THE FIRST LINE WITH "ten". 6.2 Sub-Clause 14.7 Payment

"In sub-paragraph (b) of Sub-Clause 14.7, delete '56 days after the Engineer' and substitute '45 days after the Employer' ".

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7 7.1

CLAUSE 15 Sub-Clause 15.5

TERMINATION BY EMPLOYER Employer's entitlement to Termination

INSERT AT THE END OF SUB-CLAUSE 15.5: "The Employer shall also pay to the Contractor the amount of any other loss or damage resulting from this termination."

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