ANNEXURE R DELIVERY, SHIPMENTAND HANDLING. Special Requirements per Delivery Terms:

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1 1. Delivery Instructions: DELIVERY, SHIPMENTAND HANDLING The Equipment shall be delivered in accordance with INCOTERMS 2000 subject to the special terms specified in the Agreement/Purchase Order and the provisions stipulated below in this Annexure R. Special Requirements per Delivery Terms: In the case of F.A.S deliveries the Equipment shall be unloaded by the Contractor in co-ordination with the Purchaser s Freight Forwarder at Contractor s risk and cost on the dock alongside ship and within reach of its loading tackle. In the case of F.C.A deliveries the Equipment shall be unloaded by the Contractor in co-ordination with the Purchaser s Freight Forwarder at the designated place of delivery at Contractor s risk and cost. In the case of delivery D.E.Q port of import, the Equipment shall be unloaded by the Contractor at Contractor s risk and cost either onto Purchaser s inland transportation vehicles situated alongside the vessel or onto the dock as designated by Purchaser s Customs Agent. Transshipment is permitted subject to Purchaser s prior written approval, which shall not be unreasonably withheld. The Contractor shall be obliged to ensure that all original shipping documents required for Israeli Customs clearance and release from the port in Israel are received by the Purchaser s Import Department at least five (5) working days prior to the arrival of the vessel ( due date ). (iv) (v) (vi) In the case of D.D.P deliveries the Equipment shall be unloaded by the Purchaser at Purchaser s risk and cost inside Purchaser s warehouse, on site or elsewhere as designated by Purchaser. In the case of Ex-Works deliveries the Equipment shall be loaded by the Contractor at Contractor s risk and cost onto Purchaser s transportation vehicles. Where the specified place of the delivery is outside Israel, the Contractor shall, within ninety (90) days of the execution of the Contract, or within such other time as shall be agreed upon, obtain from the Purchaser s Supply and Stores Division Import Department, the name and address of the Purchaser s freight forwarder(s) and all shipments shall be made in coordination with and through such forwarder(s) and in accordance with its instructions. No other forwarder shall be employed without the Purchaser s express prior consent in writing IEC-Anx-R Delivery 2005 F rev M BM 620 P1 P. 1 of 12

2 The Contractor shall give the Purchaser and Purchaser s forwarder a sixty (60) day preliminary general written notification of intended delivery and at least a thirty (30) day detailed final written notification of the date on which Equipment is to be ready for delivery in order to enable the Purchaser or forwarder to advise the Contractor of the vessel or vessels to which the said Equipment is to be shipped, and the approximate date upon which they are to be delivered to the dockside. (vii) Where the place of delivery is in Israel, notice of Readiness for Delivery shall be given to the Purchaser s Supplies and Stores Division at least seven (7) working days prior to such delivery. (viii) Notices required under Sub-paragraphs (vi) and (vii) above shall include an estimation of the number of packages, and weights, volumes and values of the packages. Such aforesaid notice shall also emphasize and give details of any shipment which contains Equipment which is perishable or hazardous or have a limited life span. The delivery of any and all such shipment(s) shall be especially coordinated with the Purchaser. (ix) (x) The Purchaser shall not be obliged to accept early deliveries, and unless otherwise specified in the Summary of Prices and Delivery Schedule, Annexure C1, each actual delivery should not be made earlier than one (1) month prior to the date specified therein as the latest date of delivery. Reserved. 2. Shipping Documents: Each delivery shall be accompanied by Shipping Documents in accordance with the distribution list (Attachment R1) and as described herein below: Types of Shipping Documents: Invoices: All invoices shall be issued in accordance with Article 8 of Annexure A. Packing Lists: Packing lists shall bear the Contract number, Purchase Order number, Package number, and Order Item number and shall include a detailed description of all items, consistent with the Bill of Materials and the appropriate catalogue number appearing in the relevant Purchase Order IEC-Anx-R Delivery 2005 F rev M BM 620 P1 P. 2 of 12

3 If full details of contents, weights and measures of each case or package, are shown on the invoice and description is as required above, an independent packing list is not required provided copies of said invoice are eventually distributed to the recipients of the of the packing list as required in Attachment R1. Certificates of Origin: EUR.1 / EUR-MED / FTA / Non Manipulation Certificate or such other exporter s declaration (invoice declaration) or other necessary certificate of origin shall be provided in accordance with either the preferential agreement concluded between Israel and the European Union or FTA, as applicable. (iv) Bills of Lading/Airway Bills: Clean on board non-negotiable Bills of Lading or Airway Bills shall be made out to the order of the issuing bank (the Israeli bank), bearing substantially the following clause: In view of danger of confiscation this vessel/aircraft is not to call at ports/airports and not to enter the territorial waters/air space of Iran, Sudan, Syria, Lebanon, Iraq, Saudi-Arabia, Yemen, Libya or other Arab countries, except for Jordan or Egypt, prior to unloading in Israel, unless in distress or subject to Force Majeure (v) Quality Control Certificates: Quality Control Certificates shall be issued in the format of Form 5 attached hereto. (vi) Freight Forwarder Receipts: Freight Forwarder Receipts (which shall only be required in cases in which payment is not made against a Bill of Lading or Airway Bill) shall be issued by the Forwarder to the Contractor at the Non-Israeli port/airport of export as follows: 1. in the format of Attachment R3 against presentation of the Equipment in accordance with the packing list and the documentation as listed in Attachment R1. 2. in the format of Attachment R4 acknowledging receipt of shipping documents for onwards transmission to Purchaser s Import Department IEC-Anx-R Delivery 2005 F rev M BM 620 P1 P. 3 of 12

4 (vii) Tally Reports: Tally Reports shall be issued by the Tally Company to the Contractor and the Purchaser or its agent, in the case of DEQ deliveries at the Israeli port of import. The Contractor shall mark in the Tally Report its containers or Equipment designated for delivery to the Purchaser; (viii) Delivery Notes (to Purchaser s designated store): Delivery Notes shall be issued by the Israeli Sub-Contractor in case of deliveries of Israeli Content Ex-Works Israeli subcontractor manufacturing plant or DDU/DDP Purchaser s store and shall be countersigned by an authorized representative of the Purchaser against receipt of the Equipment as detailed in the packing list. (ix) Reserved. Recipients of Shipping Documents: Advising Bank: The bank designated by Contractor for purposes of payment, in accordance with the provisions of Article 18 of the General Conditions (Annexure A ). Purchaser s Freight Forwarder: The representative designated by Purchaser for purposes of receiving Equipment delivered to the Purchaser outside Israel and/or for arranging and coordinating shipments. Import Department: Purchaser s Import Department, (all correspondence and/or documents to be addressed Attention: Head of Import Department ). All Shipping Documents required to be delivered so as to arrive at least one week prior to the arrival in Israel of the shipment in the case of sea freight. In the case of air freight, any Shipping Documents not in possession of Contractor ten (10) days before shipment, shall be faxed as soon as possible and not later than three days prior to the arrival in Israel of the shipment, and the originals mailed to Purchaser s Import Department IEC-Anx-R Delivery 2005 F rev M BM 620 P1 P. 4 of 12

5 (iv) Accounting Department: Purchaser s Accounting Department, attention designated person to contact. Recipient of Shipping Documents for payment to Israeli Subcontractors. (c) Distribution of Shipping Documents: Shipping Documents shall be distributed and attached to the delivered packages under the various delivery terms specified in this Contract in the quantities of originals/copies stipulated in Attachment R1 attached hereto. (d) Late Arrival of Shipping Documents In respect of deliveries of non-israeli Equipment, where the Shipping Documents fail to arrive in due time, due to Contractor s fault, and thereby prevent the release of the Equipment promptly from the port or airport of import, the Contractor shall, on its account, take all such reasonable steps as the Purchaser may reasonably request so as to permit the Equipment to be released from the port or airport. Any direct costs incurred by the Purchaser resulting from the Contractor s failure to provide the Shipping Documentation or other acceptable means to permit the release of the Equipment as aforesaid including costs of any bond, demurrage, storage, freight handling and clearance shall be for the Contractor s account. 3. Shipping and handling instructions: In order to avoid dislocation, delay and damage to the Purchaser in taking delivery of Equipment, and its subsequent erection or installation, the Contractor shall comply with the following provisions: Contractor shall make no delivery earlier than one (1) month in advance of the contractually specified delivery dates, without first obtaining Purchaser s written approval. Where Equipment is supplied from Non-Israeli sources, the Equipment and all components thereof shall, at the cost of Contractor, be preserved, packaged, crated, and braced in good and workmanlike manner, in accordance with Contractor s best commercial export practices. In order to save time and avert damage to Equipment of a sensitive nature, such as electronic components, as well as components of high value and low volume, the Contractor shall advise the Purchaser and upon Purchaser s instructions, such Equipment shall be packed for shipment by airfreight IEC-Anx-R Delivery 2005 F rev M BM 620 P1 P. 5 of 12

6 Where Equipment is supplied from Israeli sources the Contractor shall insure safe inland transportation to the Purchaser s designated point of delivery. Unless otherwise agreed upon, packaging shall also be suitable for open storage at the Purchaser s designated site taking into consideration high humidity and salty atmosphere for a period of up to twelve (12) months after delivery, provided that the protective packaging remains intact during such time period. Packing shall be such as to ensure safe arrival at destination, fully overcoming sea and other hazards including inclement weather conditions, exposure to salty atmosphere, open storage, high humidity conditions, and normal handling. For Equipment which is not suitable for open storage, special storage instructions shall be provided by the Contractor to the Purchaser s Supply and Stores Division, Divisional Project Management, with a copy to the engineering Project Manager, at least ninety (90) days before its delivery. The Contractor shall secure the right of Purchaser to retain the containers in which the Equipment is stored, for the full period of storage on site, without extra cost to the Purchaser, in order to meet the above stated transportation and storage on site requirements. (c) Weights and Sizes: The Equipment shall be delivered so that no component will have an as lifted weight in excess of 35 metric tons. If this limitation can not be met, Contractor shall provide a list of Equipment exceeding 35 metric tons, and special arrangements for shipment and unloading shall be agreed upon between the Contractor and the Purchaser. To the greatest extent possible whenever Equipment is delivered on pallets, same should be the size of 1.0 x 1.2 meters and weight not exceeding 1500 kg. (d) Marks: Each case/package shall be clearly marked and labeled for easy identification on the outside as follows: Specification No.; (i.e. ABC1234 and Contract number) Equipment Assembly and consecutive package nos.; (e.g. 1/3 for Unit Number 1, package number 3) 0180-IEC-Anx-R Delivery 2005 F rev M BM 620 P1 P. 6 of 12

7 (iv) (v) (vi) I.E.C. designated port or airport of import (if applicable) (e.g. Haifa/Ashdod/Ben Gurion) designated site (e.g. Alon Tabor/Gezer/Eshkol) weights and measurements. 4. Insurance: Without derogating from the Contractor s obligation to insure the Equipment in accordance with Article 26 (Insurance) of Annexure A and Annexure L, the Purchaser may for its own convenience and interest, insure the Equipment from the time it leaves the manufacturer s plant until its arrival at ultimate destination. Contractor is required, therefore, to advise Purchaser by or facsimile in good time but not less than seven (7) working days before delivery, of the following particulars required for insurance: (c) (d) (e) (f) (g) (h) (j) (k) (l) Contractor s full name and address of manufacturer s plant/warehouse; Purchaser s Contract and/or Purchase Order Number; Power Station Unit Number/Code Number appearing in the relevant Purchase Order; Number of items to be shipped; Number of packages; Exact weight (gross) of consignment; Total E.X.W./F.O.B./F.A.S./F.C.A./D.E.Q./D.D.U./D.D.P. value of Equipment shipped; Estimated Contractor s costs of ocean/air freight and inland transportation (where applicable); Date on which Equipment leave manufacturer s plant; Name of vessel/air carrier (if applicable); Name of port/airport of export (if applicable). Name of port/airport of import (if applicable) IEC-Anx-R Delivery 2005 F rev M BM 620 P1 P. 7 of 12

8 5. Delivery of Short Shipped or Damaged Items: Equipment or any parts thereof which Contractor has failed to include in the main shipment, or in the event any items are included in the packing list and/or the Bill of Lading/Airway Bill but are not actually included in the package, shall, unless otherwise agreed upon by the Purchaser, be shipped airmail, airfreight or courier on the Contractor s account, freight prepaid, taking into consideration the urgency with which the short shipped items are required for installation and erection. The delivery hereunder shall be D.D.P. to site indicated by Purchaser excluding VAT, if any upon such shipments, which shall be borne by Purchaser. Upon Contractor s request, Purchaser shall render Contractor reasonable assistance, at Contractor s cost, for customs release. In the event the Equipment after having been delivered in accordance with Article 13 (Delivery) of Annexure A is lost or damaged during shipment and the value (including price adjustment, if any) stated in the invoice or notified to the Purchaser is less than the related Contract Price of the Equipment or the related portion thereof (the difference being hereinafter referred to as the Amount of Undervalue ), the Contractor shall bear such proportion of loss or damage to the Equipment as the Amount of Undervalue bears to said related Contract Price of the Equipment or the related portion thereof. 6. VAT Payment Upon Release in Israel: In the event of deliveries to Purchaser s site of Non-Israeli Equipment D.D.U. or D.D.P., the procedure for Purchaser s payment of VAT upon release of said Non-Israeli Equipment from the port/airport of import in Israel is as follows: The Contractor undertakes to utilize the services of the Purchaser s designated Customs Agent for purposes of release of the Equipment from customs. Without derogating from the DEQ/DDU/DDP terms of delivery, the Bill of Lading/Airway Bill shall designate the Purchaser as the consignee and, shall be made out to The Israel Electric Corporation Ltd. through/care of/notify* (Israeli Company, agent or persons designated by the Contractor for purposes of release from customs) *- to be determined by the Purchaser s Customs Agent, if the customs clearance is to be made by or under the responsibility of Purchaser. (c) The commercial invoice used for customs clearance accompanying the Equipment shall be made out to the Purchaser and shall be clearly marked with the words: VALUE FOR CUSTOMS/ NO CHARGE IEC-Anx-R Delivery 2005 F rev M BM 620 P1 P. 8 of 12

9 (d) (e) All consignments shipped shall be accompanied by a packing list which shall detail the content of each package or crate. The Import Entry (Reshimon Yevu) shall be in the name of the Purchaser through/care of/notify* (Israeli company, agent or persons designated by the Purchaser for purposes of release from customs *-to be determined by the Customs Agent, if the customs clearance is to be made by or under the responsibility of Purchaser. (f) (g) The Contractor shall supply the Purchaser - attention Head of Import Department, Supply and Stores Division with copies of the documents detailed in this subarticle. The Contractor acknowledges that failure to adhere fully to any of the provisions of this Annexure may cause the Purchaser inconvenience or severe damage and serious difficulties with the customs, port, VAT or other relevant Israeli Governmental authorities. 7. Shipment Effected by the Contractor: In the event Equipment is to be delivered F.O.B., F.A.S. or F.C.A.: If requested by the Purchaser, as a Change Order, the Contractor will, in respect of any part of the Goods, arrange and pay for ocean/air freight to the port of destination in Israel. The payments and expenses in respect of the shipment of any part of the Goods and the cost of the ocean/air freight, if paid by the Contractor, shall be reimbursed to the Contractor in accordance with the provisions of Article 18 of Annexure A, on production of evidence satisfactory to the Purchaser or payment thereof by the Contractor. 8. Annexure C1, Annexure I (including Purchaser s Catalogue Numbers, Purchase Orders and special instructions for partial deliveries) and Bills of Materials: Annexure C1 - Summary of Prices and Delivery Schedule: Annexure C1 is a summary in tabular form of the prices, mode of delivery, delivery schedule and payment terms applicable for all deliverables under this Contract. Annexure C1 is also used to form a common basis for the reports to be provided by Contractor (Contractor s Project Schedule, Equipment Shipment Schedule, Progress Report and Cash Flow Report). Annexure C1 is subject to all the relevant provisions of the Agreement and these General Conditions and in any case of inconsistency, the Agreement and these General Conditions shall prevail. In the event of inconsistency between Annexure C1 and the Equipment Shipment Schedule and/or any of the other reports described below, Annexure C1 shall prevail IEC-Anx-R Delivery 2005 F rev M BM 620 P1 P. 9 of 12

10 Annexure I - Equipment Shipment Schedule and Purchase Orders: (iv) (v) (vi) Annexure I is a report of actual deliveries to be prepared by the Contractor and to be used by the Contractor and the Purchaser as a mechanism of electronically exchanging data with respect to such deliveries (preferably as an Excel file). Annexure I shall contain all components, assemblies and parts comprising the Equipment which are individually identifiable for shipment, and any special (usually on site) services to be rendered. An item for delivery as appearing in the Equipment Shipment Schedule may be a component of a larger piece of the Equipment, or a complete item of Equipment, or a package containing several pieces of the Equipment and/or components, or it may be services payable in a lump sum, services payable at an hourly or per diem rate, or portions of Work as defined by milestones, etc. (hereinafter each of such components, packages or Services shall be individually referred to in this Article as a Deliverable Item ). To enable Purchaser maximum review and control of the financial aspects of the Contract, the Purchaser, utilizing a central computerized data base, shall attribute a unique catalogue number of no more than eight digits to each such Deliverable Item and shall insert the information and data contained in Annexure I, as well as certain pertinent provisions of the payment clause, Article 18, into Purchaser s internal computerized purchase order forms (the Purchase Orders ). The Purchaser shall indicate the catalogue number on the Equipment Shipment Schedule and shall provide the Contractor with a copy of the Purchase Orders for review and confirmation. To enable timely processing of invoices and release of payment, the Contractor shall provide the Equipment and services and submit invoices in strict conformity with the terminology and the catalogue numbering issued by Purchaser and used in the Purchase Orders. Annexure I in its initial version (version 0) which conforms with Annexure C1 is attached to the Contract. Two (2) months after signing of the Contract or six (6) months before first shipment, whichever occurs later, the Contractor shall submit, for review and approval, to the Purchaser s Project Manager with a copy to Purchase s Supply and Stores Division (Attention Divisional Project Manager), an updated version of Annexure I, reflecting if necessary further division of shipments IEC-Anx-R Delivery 2005 F rev M BM 620 P1 P. 10 of 12

11 The Purchaser shall confirm the receipt and contents of Annexure I within 14 calendar days of receipt thereof and will allocate in its confirmation the applicable catalogue numbers. Thereafter a monthly report shall be submitted containing actual shipment data and Contractor s confirmation of its intention and ability to meet the delivery requirements of the balance of items to be shipped, until all delivery requirements under the Contract have been fulfilled. (vii) In case the Contractor intends to further subdivide shipments after submission of the most current updated version of Annexure I, then the Contractor shall, at least forty-five (45) days prior to the delivery date specified in the latest version of the report, submit for Purchaser s review and approval, a request for Annexure I revision. The approval shall be given within ten (10) working days and shall not be unreasonably withheld. Upon approval, the Purchaser shall issue new catalogue numbers and revised Purchase Orders to the Contractor. The new catalogue numbers and the revised Purchase Orders shall form from then on the basis for the balance of deliveries. The same procedure shall apply in the event of the issuance of any Change Order. (viii) For the avoidance of doubt, the payment pro-rata Deliverable set out in Subarticle 18(c) of Annexure A should be invoiced once only per Deliverable (as identified in the price breakdown in Annexure C1 or later on in Annexure I ) upon completion of delivery of such Deliverable. Subject to the provisions of Subarticle 8(vii) above, in the event the Contractor wishes to effect and invoice partial deliveries per Deliverable, the Contractor shall issue the invoices for such partial deliveries ensuring that the net amount of said invoices reflects a deduction of the amounts paid as Down/Advance payment on account of said Deliverable from the payment for the first related partial delivery and, in the event the amount of the Down/Advance payment exceeds the price of said partial delivery, from the related next consecutive partial deliveries. For purposes of clarification, in cases of partial deliveries per Deliverable, circumstances may well arise whereby delivery is made to the Purchaser and (because of the deduction of the Down/Advance payments) no actual payment is effected to the Contractor through the letter of credit or financing disbursements - until such time as the value of the Down/Advance payment has been deducted in full IEC-Anx-R Delivery 2005 F rev M BM 620 P1 P. 11 of 12

12 (ix) Notwithstanding any other remedy available to Purchaser under the Contract, failure by Contractor to provide Annexure I in compliance with the foregoing within ten (10) working days from the date of Purchaser s written notification of noncompliance shall be deemed to constitute delay in submitting a Critical Document. (c) Bill of Materials: Along with the updated Equipment Shipment Schedule required above, Contractor shall issue a Bill of Materials. The Bill of Materials shall allocate all the components, assemblies and subassemblies to be delivered to the relevant Deliverable Item and to the appropriate shipment. The Bill of Materials shall contain such cross-reference data as shall allow the Purchaser to verify compliance with the scope of Work and to locate and identify items during erection. The Bill of Materials shall be issued on an agreed upon magnetic media (preferably as an Excel file) in the format of Attachment R2 attached hereto, giving the following details in conformance with the Equipment Shipment Schedule and the packing lists: name of Power Station, Contract Number, Unit Number, Purchase Order number, related product tree number, related Purchaser s catalogue number, item description, reference drawing number and revision, quantity ordered, dimensions, weight and type of storage. The Contractor shall submit to the Purchaser s Supply and Stores Division (Divisional Project Management) with the monthly Equipment Shipment Schedule reports, updates of the Bill of Materials, reflecting the actual scope of Work as soon as the relevant design was completed. The Contractor shall verify that all the items included in a packing list are properly listed in the Bill of Materials and if necessary shall issue special updates not later than three (3) working days prior to actual shipment. The Bill of Materials and each update thereof is considered to be a Critical Document and the provisions of Article 2(c) shall apply thereto. - Final IEC-Anx-R Delivery 2005 F rev M BM 620 P1 P. 12 of 12