INDEX TO SCOPE OF WORK

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1 ENQUIRY LE 0493 ANNEXURE B SCOPE OF WORK PLEASE TAKE NOTE THAT A PRE-TENDER MEETING WILL BE HELD IN RICHARD BAY HARBOUR IN THE BOARDROOM OF THE OFFICES OF ARCELORMITTAL. PRE-TENDER MEETING PLACE: NORTHMOOR ROAD, PORT OF RICHARDS BAY DATE: THURSDAY, 8 MAY 2014 TIME: 12H00 PLEASE CONFIRM YOUR ATTENDANCE WITH BENNET MARIE OR DONOVAN NIEPAGE ON ON OR BEFORE 7 MAY 2014, 13H00. INDEX TO SCOPE OF WORK 1 DEFINITIONS LEGISLATION, STANDARDS AND CODES OF PRACTICE CRITERIA TO ADHERE TO STEVEDORING IN RESPECT OF DISCHARGE OF BULK PRODUCT SCOPE (PROJECT SPECIFICATION) PRODUCT CHARACTERISTICS PRODUCT VOLUMES OPERATIONAL REQUIREMENTS HOURS OF DUTY COMMERCIAL TERMS PERFORMANCE BONUS / PENALTY RISKS GENERAL

2 SCOPE OF WORK TO ACT AS ARCELORMITTAL S STEVEDORE THE PROVISION, MAINTENANCE AND OPERATION OF FRONT-END-LOADERS FOR THE DISCHARGE OF COKING COAL ON AD HOC BASIS AT DRY BULK TERMINAL /PREMIUM BERTHS, TRANSNET PORT TERMINAL, RICHARDS BAY FOR A PERIOD OF 3 OR 4 YEARS 1 DEFINITIONS AMSA Contractor DBT Gross Time Hold Manager Motorola GP680 Product Stevedoring TPT ArcelorMittal South Africa The successful tenderer who will be appointed as a result of his tender against this Enquiry. The Dry Bulk Terminal that is part of Premium Berths import section situated in the Port of Richards Bay Time taken to discharge vessel excluding hatch change delays as per clause 11 Space below the deck of a ship which holds the Product. The Manager at the Richards Bay AMSA office or any subordinate authorized by him. The required two-way radio prescribed for communication in the execution of the Contract to be used for communication with AMSA and TPT/Premium Berth Supervisory personnel on board during discharge (TPT/Premium Berth Channel to be used). The cargo in question, namely coking coal. The operation performed by the Contractor on board the vessel to assist with the discharging of the Product. Transnet Port Terminals. 2 LEGISLATION, STANDARDS AND CODES OF PRACTICE Latest revisions or amendments of the listed Acts, Codes and/or Specifications that will be applicable to the Contract which does not constitute an exhaustive list: Number Title / Description Revision 1.1 Occupational Health and Safety Act Act 85 of ISO 9000 Quality System Series 1.3 SABS 1200 (All relevant specifications) 1.4 Hazardous Chemical Substance Regulation

3 All work listed in this scope of work shall be completed in accordance with the Acts, Codes and/or Specifications as listed above and any other Acts, Codes and/or Specifications that is required to act as a Stevedore. It is the responsibility of the Tenderer to be in possession of the latest Acts, Codes and/or Specifications as listed above and as required to perform the acts of stevedoring. 3 CRITERIA TO ADHERE TO Essential criteria: In this regard special reference is inter alia made to the following, which does not constitute an exhaustive list: Number Tile/Description Revision 2.1 Contractor to be a registered Contractor approved by TNPA to operate within Port of Richards Bay as a Stevedoring Service 2.2 Public Liability Insurance Cover 2.3 Workman Compensation 2.4 Submit Standard Operating Procedures for all envisaged operations 2.5 Induction at TPT / Premium Berths Richards Bay 2.6 Contractor must have a valid Stevedore License It is the responsibility of the Tenderer to be in possession of the latest standards and codes as listed above as well as any other legal requirements in the execution of his duties as a Stevedore. Certified documents must be submitted together with the tender documents. 4 STEVEDORING IN RESPECT OF DISCHARGING OF THE COAL A full Stevedoring Service is required in the Port of Richards Bay at berth 701 and/or berth 702 (or berth as allocated by the Port Authority), at which berths the Product will be discharged by way of Transnet Port Terminals gantry crane grab. The Stevedoring Service must include the following: 4.1 The safe and productive direction of Transnet Port Terminals equipment, i.e. cranes, grabs and conveyors, in accordance with and to the satisfaction of AMSA, TPT and the Vessel s requirements. 4.2 Cranes to be directed in such a manner that NO holes are created in the center of the Holds during discharge. 3

4 4.3 Pay loading/moving of the Product with front-end-loaders from wings into Hold square to ensure that TPT s grabs have uninterrupted, safe access to material in the center of the Holds at all times. 4.4 Ensure the Product in the Hold is level at all times, thus preventing the vessel from listing. 4.5 Communication with both AMSA and TPT Personnel via Motorola GP680 and/or mobile phone on a 24 / 7 basis. 4.6 The immediate reporting (verbally and in writing) of all stoppages exceeding 10 minutes to the appointed AMSA Port Agent, AMSA and TPT. 4.7 The Contractor must compile a report on a daily basis, detailing all discharge times, stoppages and delays which report must be supplied to AMSA during the daily pre-plan meeting. 4.8 Provide 12 laborers to clean the hatch covers, vessel walkways and spillages on the vessel on an ongoing basis. 4.9 The Contractor may only employ personnel and equipment which comply with national, terminal and harbour regulations to operate on the relevant vessels on which the Contractor must operate as a Stevedore Before departure of any vessel, repairing at Contractor s time and expense any damage to the vessel caused by the Contractor, the Contractor s employees or Contractor s equipment. Such repairs must be carried out to the satisfaction of the Master of the vessel and the appointed vessel Class Surveyor as applicable before sailing and/or during discharge of the vessel. Should the vessel be delayed due to repairs not completed by the Stevedore, the cost incurred will be recovered ex the Stevedore Cleaning and removing of the Product behind pipes and stairs, in ribs, on an ongoing basis with Stevedore laborers in line with the discharge progress to ensure there is NO Product left on completion of vessel discharge Follow the discharge sequence as agreed between the vessel Master and AMSA as submitted on the daily pre-plan meeting by the Port Agent. NO unauthorized deviation on the discharge sequence will be allowed, except if the changes are accepted by AMSA and the Master of the vessel. Any requests by the Contractor for changes in the discharge sequence must be submitted to AMSA. NOTE: All operations are based on hot seat changes, i.e. no stoppages in utilizing the front-end-loaders in the Holds, including no stoppages during shift changes. No delays with regard to discharge of vessels are allowed. 4

5 5 SCOPE (PROJECT SPECIFICATION) The Scope covers the following and should be inclusive of your tender tariff: The provision, maintenance, fuelling and operation of FOUR NEW FRONT- END-LOADERS (also refer to clause for specification), PLUS one spare front-end loader, as well as providing suitably qualified licensed drivers that are permanently employed by the Contractor (valid driver s certificate to be provided) to work in the hatches of the said vessels to enable discharge of the Product at a rate of 18,000mt/day. The full stevedoring duties that comprises of cleaning of the Holds, the hatch covers, the walkways and other spillages with a minimum of 12 laborers and inclusive of 1 (one) qualified gangway operator per Hold (qualified and permanently employed by the Contractor, valid certificates to be provided). The provision of own Motorola GP680 Radio s for communication with AMSA and TPT Supervisory personnel on board during discharge.(tpt/premium Berth Channel to be used). All requirements as reflected in clause 4 will also apply. 6 PRODUCT CHARACTERISTICS 6.1 The Product is considered a hard coal with suitable characteristics for use in blast furnaces. 6.2 Density is between 0.8 and 0.95 tons per m 3 depending on the moisture content. 6.3 Moisture content will vary between 6% and 12% depending on the length of time standing. Moisture content will also vary through the vessel and stockpile profile. 7 PRODUCT VOLUMES 7.1 Shipments of the Product will arrive at the port for discharge in batches of between 40,000 and 200,000 tons. 7.2 The quantity of Product over the next 3-4 years is anticipated to be between 1,5 million and 2,1 million tons per annum. 7.4 The average required target of discharging a vessel is 18,000 metric tons per day. This target rate is applicable on a per vessel basis. 7.5 In general, and for the purposes of this tender, only one vessel will berth at any one time. Should a second vessel berth then AMSA will request otherwise and the additional service will be handled on a vessel by vessel basis outside of the Contract. The 1 st option to perform the Stevedoring on a second vessel will be offered to the Successful Tenderer. 5

6 8 OPERATIONAL REQUIREMENTS 8.1 In the case of Stevedoring operation, the Contractor will be required to: Perform the operation inside the holds of the vessel by moving the Product with front-end-loaders to enable the TPT crane grab to discharge the Product. Pay loading/moving of cargo from wings into hatch square/center to ensure that grabs have uninterrupted, safe access to material at all times The immediate report verbally via Motorola GP680 Radio and if requested, in writing, any major stoppages exceeding 10 minutes to AMSA and its appointed Port Agent Compile a report on a daily basis, detailing all discharge times, stoppages and delays which report must be supplied to AMSA during the daily pre-plan meeting Provide a NEW fleet of minimum four (4) front-end-loaders of 140 kw (minimum) with a bucket capacity of 4 5 cubic meters for on board working, PLUS a minimum of 1 (One) spare front-end-loader with the same size and capacity alongside the vessel in case of breakdowns to ensure the TPT machinery consisting of two crane grabs per vessel can reclaim at the system design rate of 2,200 metric tons per hour to achieve an actual stevedoring discharge rate of 18,000 tons per day Never have less than 4 fully operational front-end-loaders available on board with adequate backup machinery in the event of fleet maintenance and/ or failure The maximum wet mass (fuelled) of each front-end-loader must not exceed 16,000kg (16 tons) Provide adequate and safe lifting equipment accessories, i.e chains etc to permit placement of front end loaders on board the vessel using TPT quayside discharge machines. Valid safety certificates for such lifting equipment accessories must be submitted Provide gangways (certified). Any Foreigners used as gangways/ laborers/ supervisors must have satisfied the immigration requirements of the department of home affairs. Any and all training required will be provided by the Contractor. No uncertified Gangways may be used Provide and ensure verbal communication channels by means of Motorola GP680 two-way radios are in place at all times between Contractor s operators and TPT personnel. Maintenance and the replacement of missing radios/ communication devices shall be for the Contractor s account Continued cleaning operation with 12 laborers minimum within the Holds and on deck from start to completion of discharging the vessel, incorporating the removal of all Product behind pipes and in ribs of the Hold going down, sweeping of Holds, decks and hatch covers as well as spillage on the quayside Ensure that: Front-end-loaders are refueled on the quayside; Any fuel spillage must be cleaned up in accordance with required standards when refueling on quayside takes place. Formatted: Bullets and Numbering 6

7 9 HOURS OF DUTY 9.1 The Port of Richards Bay/TPT/DBT Premium Berths operates 24 hours per day and 7 days a week 9.2 Exceptions are 3 days in the year, namely Workers day, Christmas day and New Year s Day when the Premium Berths are normally closed. 9.3 Exceptions to these days may occur and the Contractor is expected to collaborate if so required by the Manager. 9.4 The Contractor shall comply with TPT s hot shift change pattern as per the stipulated times below: Morning shift: 05h45 to 13h45 Afternoon shift: 13h45 to 21h45 Night shift: 21h45 to 05h45 10 COMMERCIAL TERMS 10.1 An Agreement will be concluded with the successful tenderer for a period of three (3) or four (4) years to commence on 1 July 2014 or to commence close to 1 July The Contractor should thus submit tender tariffs for a contract period of three as well as for four years The successful Contractor will be paid on a per ton basis and should quote as such. Tariffs should include ALL fixed and variable costs but exclude VAT Tariffs will be volume dependent and based on a sliding scale refer clause 10.6 below The volumes as reflected in the sliding scale will be the volumes per each year of the contractual 3- or 4-year period Each of the above 1-year cycles should contain tariffs based on annual volume ranges as follows: million tons or less per annum; million tons up to 2.25 million tons per annum, which range will increase with ton increments (Refer to Annexure C of the Draft Agreement); maximum range will be 2.25 million tons per annum and greater. Tariffs must be incrementally based as reflected in Annexure C of the Draft Agreement Within the Agreement, a performance based penalty/bonus system will apply to tariffs quoted. The principle is that an average of 18,000 tons per day should be achieved per vessel, and deviations would either positively or negatively affect the tariff paid. The penalty/bonus system will be finalized and discussed with the successful Contractor. 7

8 10.8 Within the final agreement, provision is made for immediate contract cancellation should contractual performance fall below the agreed 18,000 tons performance tonnage per day on two consecutive vessels In the case of the Stevedoring operation, the volumes handled will be as depicted on the mate s receipt/bill of Lading The successful Contractor will NOT be permitted to sub-contract the Stevedoring services. 11 PERFORMANCE BONUS / PENALTY 11.1 The minimum nett discharge rate per vessel (after deducting all delays) is 18,000 metric tons per day The following conditions will be applicable: Time allowed for Stevedore hatch changes = 9 hours on a Cape Size ( ,000 ton) and 7 hours on a Handymax ( 25,000 to 45,000 ton) 7 hours Panamax (60,000-85,000) No time allowed for shift changes, hot seat changes will apply Any delays caused by the Stevedores other than the above and exceeding the above, will count against the Stevedores The Contractor must provide a tally service and record and submit all delays at the daily vessel meeting on-board to the AMSA representative. Any deviations from the official TPT delays must be clarified with TPT by the Contractor before the ship meetings A standard Bonus / Penalty will apply on a vessel by vessel basis > 18,500 tons per day = 5% bonus based on the BOL mass, i.e. Stevedoring tariff per ton as reflected above, PLUS 5% < 18,000 tons per day = 5% penalty based on the BOL mass, i.e. Stevedoring tariff per ton as reflected above, MINUS 5% The Bonus/Penalty will be calculated and paid on a vessel to vessel basis and will be as agreed upon at the debrief session between AMSA and the Contractor, which debrief session will be held within 3 working days of completion of the discharge of each vessel. 8

9 12 RISKS Tenderers must also submit their business continuity plan that will cover strikes, breakdowns and any other occurrences that will influence or delay the critical activities. 13 GENERAL 13.1 Any damage caused by the Contractor s front-end-loaders or Contractor s Employees on-board any vessel, will be for the Contractor s account. The damage must be repaired by a certified Engineering company at the Contractor s cost, whilst the vessel is in the port. The damage must be reported immediately to the AMSA /TPT and DBT Premium Berth Managers and the appointed Port Agent. A written incident report must be submitted within 8 (eight) hours to AMSA, including corrective actions taken. The Stevedoring Company/Contractor must provide Proof of Insurance against claims ex Third Parties The Contractor must comply with the prevailing safety, labour and municipal by-laws Front-end-loaders and all other equipment accessories must be maintained in a road worthy and fully operational condition by the Contractor at their own expense The Contractor accepts full responsibility for his own equipment, equipment accessories and personnel All lifting equipment accessories must be tested and certificates must be submitted and available on request The attached Service Level Agreement will be utilized as the performance measurement on a vessel per vessel basis The Contractor will at its own cost provide and maintain Motorola GP680 two-way Radio s to its personnel on board to ensure communication with AMSA, TPT and Premium Berth Supervisors. 9

10 TENDER TARIFFS STEVEDORE OPERATION Tonnage handled per annum Rand/ ton Handling [A] First 1.5 million tons 1.5 to 1.75 million tons 1.75 to 2.0 million tons 2.0 to 2.25 million tons In excess of 2.25 million tons EXCEPTION PRICING IF APPLICABLE SHOULD A 2 ND VESSEL BE IN RICHARDS BAY PORT SIMULTANOUSLY AS THE 1 ST VESSEL Additional front-end loaders Minimum hours [B] Rand / hour/ machine [C] Normal time Hours R Overtime Hours R Sunday time hours R 2 ND Vessel simultaneous discharge Cost/mt Any lead time premium to obtain equipment [D] [A] [B] [C] On board stevedoring plus cleaning of holds/ hatch covers, material behind stairs and pipes in the hold and deck as well as supply of gangways and 12 laborers/ vessel Minimum guaranteed hours of work required 24 hours/day( shift base) Hire Equipment/ charge with drivers 10

11 SERVICE LEVEL AGREEMENT FOR THE STEVEDORING OF IMPORT COAL Service Level Agreement: AMSA & SUCCESSFUL TENDERER Date:.. Vessel name:.. Discharge period: 00/00/10 01/00/10 STANDARD MEASUREMENT BT % PT Actual Score Scoring Scale Comments Attendance at pre-plan meeting The agreed number of five front-end-loaders (as agreed as per contract) to be available for quayside and hatch operations for duration of discharge Recording of all vessel delays daily (weather, mechanical or operational delays). Hot seat shift change on all payloaders To notify AMSA of any delays exceeding 10 minutes or when visible water is detected in a hold. Grab loading of Conveyors/ hoppers ex holds to be supervised and controlled along with TPT to prevent blockages by stopping discharge when applicable Back-up front-endloader to be alongside vessel whilst discharging vessel Supervisor to attend the meeting Pay loaders to be present for inspection Daily / shift delays to be recorded on shift sheets and be discussed on daily on-board meetings. Copying of Transnet delays not allowed No delays during shift changes Notification within 30 min after delay occurred No overloading of conveyors No damage caused to trucks or property. Supervisor to be on board at all times No delays recorded as result of shortage of front-end-loaders 5 5 Yes = 5 10 N/A 3 5 No = 0 Yes = 10 No = 0 Yes = 3 No = 0 3 N/A Yes = 3 No = Yes = 5 No = 0 10 N/A 1 incident = 10 2 incidents = 5 3 incidents = 0 2 N/A No delays = 2 Any delay = 0 11

12 Supervisor attend the daily on board vessel meetings Hatch pay loading to be done efficiently and effectively with the surface staying level. No buildup of cargo in wings. No contamination of cargo Minimum discharge rate of 18,000mt per 24hrs No damages to vessel All hatches to be cleaned and free of cargo with no delays whilst going down and on completion. Pay loaders to assist with cleaning of quayside / Slab area Attendance of supervisor at daily on-board meetings No delays to be recorded. No incidents of contami-nation Daily draft / weighbridge tonnages to be discussed at onboard meeting Damage reports to be attached to daily reports. Inspection of all hatches by AMSA or it s appointed Surveyors Pay loaders to be available until quayside is cleaned 2 10 Attendance = 2 No attendance = No delays = 2 Any delay = No incident = 20 Any incident = 0 N/A < = = > = No incident record = 28 Any incident = No delays = 5 Any delay = 0 5 N/A No delays = 5 Any delay = 0 SCORE 100% 100 % Approved and Accepted on Behalf of AMSA.... NAME IN PRINT SIGNATURE DATE Approved and Accepted on behalf of Stevedores.... NAME IN PRINT SIGNATURE DATE 12