Current report no 15 / 2017

Execution of works for the modernisation of the railway line No 7 along the Otwock-Lublin section – selection of the bid from the consortium of Mostostal Kraków, PKP Energetyka SA and Schweerbau GmbH&Co. KG Bauunternehmen

The Management Board of Budimex SA announces that on 10 March 2017 it was informed by PKP Polish Railway Lines SA about the selection of the bid from the consortium of Mostostal Kraków (a wholly subsidiary of Budimex SA) – the leader of the consortium with the share of 45% and Schweerbau GmbH&Co.KG Bauunternehmen, as the most advantageous bid in the tender for the execution of the works on the railway line No 7 Warszawa Wschodnia Osobowa – Dorhusk, along the section Warszawa-Otwock-Dęblin-Lublin Phase I – in the scope of a partial order B – execution of the modernisation on the railway line No 7 along the Otwock-Lublin section in km 55.600-km 107.283.

Contract value: PLN 597,410,754.55 net.

Works commencement date: within 4 months from the signing of the contract.

Works completion date: 22 months from the works commencement date.

Guarantee period: 72 months.

Warranty period: 72 months.

Advance payment: 10% of the Gross Contract Value.

Payment: within 30 days from the date of receipt by the Employer of a valid invoice in accordance with the annexed Interim Payment Certificate and acceptance certificates.

Bank performance bond: 10% of the Accepted Gross Contract Value.

Contractual penalties paid by the Contractor:

- For not executing on time of the phase set forth in the Time Schedule: 0.02% of the Accepted Contract Value per each phase for each day of the delay (instead of the penalty, the Contractor may submit a Bank Guarantee and in the case of completing the whole Project on time, the penalty may be annulled).

- For not submitting a Progress Report for the works: PLN 2,000 for each day of the delay.

- For commencing the works without the approved Quality Assurance Programme, the Temporary Traffic Organisation Plan: PLN 5,000 for each day of irregularity.

- For commencing the works without the approved Temporary Traffic Organisation Regulations or for conducting the work contrary to the Regulations: PLN 5,000 for each day of irregularity.

- For not safeguarding the work site in compliance with the guidelines: PLN 10,000 for each day of irregularity.

- For failing to submit the Time Schedule, for the lack of the update of the Time Schedule: PLN 5,000 for each day of the delay.

- For failing to keep the deadline to rectify defects specified in the Work Acceptance Certificate: 1% of the gross value of the individual works which the fault pertains to.

- For failing to keep the deadline to rectify a fault/defect during the fault reporting period within a deadline set forth by the Ordering Party: PLN 1,000 for each commenced hour of the delay.

- For the late submission of the Insurance Policy document: PLN 40,000 for each day of the delay.

- For the need to use the replacement signals following to the extension of the works due to the contractor’s fault: PLN 10,000 for each day.

- For subcontracting the works to unapproved Subcontractors: PLN 20,000.

- For failing to submit a copy of the subcontractor’s agreement: PLN 10,000.

- For failing to amend the payment deadlines in the subcontractor’s agreements: PLN 10,000 for each day of the delay in the summoning to change the agreement.

- For the absence or for the untimely payment to the Subcontractors: PLN 25,000 for each instance.

- For withdrawal from the Contract by the Ordering Party out of reasons stipulated in Sub-clause 15.2: 30% of the Accepted Contract Value.

The Ordering Party reserves the right to demand supplemental damages up to the value of the actual loss that was incurred, in accordance with the provisions of the Polish Civil Code, including the loss of the EU funds due to reasons attributable to the Contractor.

The bid value exceeds the threshold of PLN 102,680 thousand.