Current report no 22 / 2016

Construction of Olsztyn ring road — new contract of Budimex SA

The Management Board of Budimex SA advises that the contract for construction of the S51 road from Olsztyn to Olsztynek at the section from Olsztyn-Wschód to Olsztyn-Południe (formerly: Construction of the Olsztyn ring road as part of the national road No 16 — Task No 2: from approx. km 10+000 to the end of the prepared area on approx. km 24+701 (behind the Olsztyn-Wschód junction)” was signed on 29 March 2016 with the General Directorate for National Roads and Motorways, Branch in Olsztyn.

• Contract value: PLN 742,290,952 net.
• Works commencement date: on the contract date.
• Works completion date: 28 months from the conclusion of the contract. The implementation time does not include winter periods (i.e. from 15 December to 15 March).
• Guarantee periods: 10 years for pavement structure (excluding wearing course), acoustical barriers, traffic signs, concrete prefabricates, road engineering structures; 5 years for the wearing course; 4 years for thick layer traffic marks; 3 years for greenery and 1 year for thin layer traffic marks.
• Financial terms and conditions:
  • Advance payment: from 5% to 10% of the accepted gross contract amount.
  • Payment: 30 days from the receipt of a VAT invoice by the investor.
  • Bank performance bond: 10% of the accepted gross contract amount.
• Maximum penalties payable by the contractor:
  • 20% of the accepted gross contract amount.
• Maximum penalties payable by the investor:
  • 15% of the accepted gross contract amount for withdrawal from the contract due to reasons attributable to the investor.
• The investor reserves the right to demand supplemental damages in excess of contractual penalties to the amount of the actual or potential loss caused by improper performance of the contract by the contractor.

The contract value exceeds 10% of the equity of Budimex SA.