Conclusion of an agreement with PGNiG Technologie S.A. for execution of construction and assembly of pipeline DN700 Hermanowice-Strachocina
The Board of STALPROFIL S.A. informs that on 11 May 2017 an agreement was concluded between STALPROFIL S.A. (subcontractor) and PGNiG Technologie S.A. located in Krosno (Contractor), the subject of which is: Execution of construction and assembly of a segment of pipeline DN700 Hermanowice-Strachocina from a drilling under river San to 51.9 km to magazine Strachocina 71.7 km, including 19.8 km within the framework of investment realized by Gaz-System S.A. (Employer): "Construction of gas pipeline DN700 Hermanowice-Strachocina including infrastructure necessary to support it".
The value of the contract amounts to 28,862,033.00 PLN net and its implementation will take place within 17 months from transfer of land to build on to the Subcontractor.
The agreement will be implemented by STALPROFIL's branch in Zabrze, which were brought all the assets and liabilities of the subsidiary ZRUG Zabrze S.A., incorporated to STALPROFIL S.A. on 1 December 2016. The signed agreement expands the portfolio of orders for services the construction of gas pipelines owned by STALPROFIL SA branch in Zabrze and significantly increases the chances of recovery by the STALPROFIL S.A. Capital Group's profitability in this sector of activity, subject of restructuring in 2015 and 2016.
With the execution of this Agreement comes risk of charging contractual penalties on the Subcontractor, including but not limited to: delay in making the final acceptance, delay in acceptance, failure to achieve the declared level of defective weld line, delay in accession to removal and delay in removal of defects during the warranty period and warranty and withdrawal from the Contract for reasons attributable to the Subcontractor. Contractual penalties provided for in the Agreement is not subject to delay due to reasons attributable to the Contractor.
The total amount of contractual penalties Subcontractors accrued pursuant to the Agreement may not exceed 20% of net payment. Contractor shall have right to seek additional compensation, in excess of the reserved contractual penalties in the Agreement, according to general principles of the Civil Code.