05.04.2018

Conclusion of Agreement with OGP Gaz-System S.A. for construction of the DN1000 Zdzieszowice-Wrocław gas pipeline, section Brzeg-Zębice-Kiełczów

With reference to current report 8/2018 of 12 February 2018, the Management Board of STALPROFIL S.A. informs that on 5 April 2018 an agreement was concluded between STALPROFIL S.A. (Contractor) and OGP Gaz-System S.A. with registered office in Warsaw (Ordering Party), whose subject is general implementation of an investment under the name: "Construction of the Zdzieszowice-Wrocław DN1000 MOP 8.4 MPa pipeline with associated facilities and infrastructure necessary for its operation, section I - Brzeg-Zębice-Kiełczów, as part of construction of the Zdzieszowice-Wrocław gas pipeline Brzeg-Zębice and gas pipeline - border of the Republic of Poland (Lasów) - Taczalin - Radakowice - Gałów - Wierzchowice gas pipeline Zębice-Kiełczów", 49.1 km long.
The total remuneration of the Contractor due to proper implementation of the investment, pursuant to the Agreement, is PLN 187,266,000.00 net (PLN 230,399,640.00 gross). The deadline for completing the investment has been set by the parties for 27 months from the date of conclusion of the Agreement.
In order to secure claims of the Ordering Party due to non-performance or improper performance of the Contract, the Contractor provided security in the form of a guarantee of proper performance of the Contract, including removal of defects during the guarantee and warranty period, in the amount of 10% of the total gross remuneration.
The Ordering Party is entitled to charge the Contractor with stipulated penalties, including a delay in making the Final Acceptance in relation to the date specified in the Agreement:
- during the first 30 days of delay - 0.02% of net remuneration for each commenced day of delay,
- in case of a delay exceeding 30 days - 0.04% of the net remuneration for each commenced day of delay falling after 30 days of delay,
The sum of contractual penalties calculated by the Ordering Party due to the delay in making the Final Acceptance in relation to the date specified in the Agreement may not exceed 15% of the net remuneration.
In case of withdrawal from the Agreement by any of the Parties for reasons attributable to the Contractor, the Ordering Party is entitled to charge the Contractor with a contractual penalty of 20% of the net remuneration indicated in the Agreement.
The total amount of contractual penalties due to the Ordering Party may not exceed 20% of the net remuneration indicated in the Agreement.
The orderer has the right to claim supplementary compensation, exceeding the amount of contractual penalties stipulated in this Agreement, on the general principles of the Civil Code.
The concluded contract should, during its implementation, significantly affect the growth of the results generated by the Company in the segment of gas transmission network infrastructure. This segment is serviced by the self-balancing Branch of STALPROFIL S.A. in Zabrze, which is responsible for the execution of construction works under the Agreement.