TECHNICAL PROPOSAL FOR THE MAINTENANCE OF

STACKER AND BUCKET WHEEL RECLAIMER

CUSTOMER: STEEL AUTHORITY OF INDIA LIMITED

BOLANI, ODISHA, INDIA

M T Ramesh
Sr. Manager - O&M Sales
Proposal Ref. No: CS/O&M/PRO/00149, Rev.0
Date: 11.10.2016

CONTRACT CONDITIONS FOR THE MAINTENANCE OF

STACKER AND BUCKET WHEEL RECLAIMER

Between

STEEL AUTHORITY OF INDIA LIMITED (SAIL)

BOLANI, ODISHA, INDIA

and

FLSMIDTH PRIVATE LIMITED

CHENNAI, INDIA

DATED: 11 OCTOBER 2016

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Proposal Ref. No: CS/O&M/PRO/00149, Rev.0
Date: 11.10.2016

TABLE OF CONTENTS
DESCRIPTION PAGE NO.
ARTICLE 1: SCOPE OF THE AGREEMENT .............................................................. 5
ARTICLE 2 : DIVISION OF RESPONSIBILITIES ................................................... 5
ARTICLE 3: PRICE ............................................................................................ 12
ARTICLE 4: PERFORMANCE GUARANTEE AND LIQUIDATED DAMAGES .............. 12

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Date: 11.10.2016

AGREEMENT

This Agreement of The Maintenance of Stacker and Bucket Wheel Reclaimer is

entered on ______________ (“Agreement”)

By and Between

(1) STEEL AUTHORITY OF INDIA LIMITED (SAIL), a company, duly

established, incorporated under Companies Act, 1956 and existing under
the laws of India, having its registered office at Ispat Bhavan, Lodi Road,
New Delhi – 110 003.

(hereinafter referred to as the “OWNER”, which expression shall, unless

repugnant to the context or meaning hereof, include its successors and assigns)

and

(2) FLSmidth Private Limited, a company duly incorporated under

Companies Act, 1956 and existing under the laws of India, having its
registered office at FLSmidth House, 34-Egatoor, Kelambakkam, Rajiv
Gandhi Salai, Chennai -603 103.

(hereinafter referred to as the "CONTRACTOR", which expression shall, unless

repugnant to the context or meaning hereof, include its successors and assigns)

The OWNER and CONTRACTOR shall be collectively referred to as the "Parties"

and individually as a "Party".

Preamble:

Whereas, OWNER wishes to engage a qualified company to carry out the

Maintenance of the Plant and provide relevant services as specified in
accordance with the terms and conditions as hereinafter set forth, and

Whereas, CONTRACTOR warrants that it is qualified to carry out the said

technical management, Maintenance and to provide the required services and is
willing to undertake same in accordance with the terms and conditions
hereinafter set forth, and

Now, therefore, it is hereby agreed and declared by and between the Parties
hereto as follows:

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Article 1: Scope of the Agreement

1.1 CONTRACTOR will carry out the Technical Management, Maintenance of

the Stacker and Bucket wheel Reclaimer (mechanical, electrical and
instrumentation) as listed in the annexure 2, with the objectives of:

(a) Ensuring a smooth, economic and efficient maintenance of the Plant.

(b) Attaining and optimizing the availability according to guaranteed

figures stated under this Agreement.

(c) Maintaining the Best Safety Practices as per OHSAS 18001:2007.

1.2 The Technical Management, Maintenance of the Plant will consist of the
following:

(a) Technical Management, Maintenance:

 Ensuring the attainment of plant availability targets.

 Planning and execution of preventive, corrective maintenance,

condition monitoring (Temperature & vibration monitoring only)
and Predictive Maintenance.

 Implementation of all Health & Safety management systems to

ensure that meets the accepted standards.

 Reporting plant performance and equipment condition on a

periodic basis to OWNER.

Article 2 : Division of Responsibilities

2.1 Responsibilities of CONTRACTOR:

(a) Establish the organization and staff with qualified personnel:

 Appoint competent qualified personnel to provide all technical

management, Maintenance services.
 Pay for the cost and expenses (including salaries, other perks,
insurance etc.) of all CONTRACTOR employees.
 Arrange accommodation and transport of all CONTRACTOR
employees from their place of residence to the work place and
vice versa.
 At the end of the term of this Agreement or at the time of its
termination, for whatever the reason, CONTRACTOR is
responsible for all rights and obligations towards its employees
working at the Plant.

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 CONTRACTOR shall follow the good and safe engineering

practices in course of delivering Services under this Agreement.

(b) Establish and implement systems for plant maintenance

management, HR management and Health & safety management.
Such systems will include documented policies, procedures, work
instructions, records and processes for planning, monitoring,
evaluation and improvement of performance. All related records shall
be kept up to date and be made available for audits.

(c) CONTRACTOR shall train his personnel to effectively implement the

management systems. The OWNER may also at his discretion, impart
training to the CONTRACTOR’s personnel on maintenance or safety
related matters; however, such training by the OWNER shall not
absolve the CONTRACTOR from his responsibility for training his
personnel.

(d) Maintenance of all Mechanical and Electrical & Instrumentation

components of the Stacker & Reclaimer (at field only).

(e) The CONTRACTOR shall attend all breakdowns due to the reasons not
attributed to CONTRACTOR's scope of work. However charge for
additional manpower if required for major breakdowns shall be paid
by OWNER as per the rate specified in annexure-1.

(f) Maintenance of field switches & lighting in the Stacker & Reclaimer.

(g) CONTRACTOR shall achieve the (Key Performance Indicators) KPI’s

as defined in this Agreement as per annexure-4.

(h) The CONTRACTOR shall be required to change out assemblies and

spares from time to time as the preventive/predictive or breakdown
maintenance dictates.

(i) For Extraordinary Maintenance carried out offsite, the CONTRACTOR

shall undertake the task of removing the component for sending it for
offsite maintenance and reinstall the component received from offsite
maintenance.

(j) CONTRACTOR shall plan for spare parts, lubricants, fuel, other
materials and consumables as may be required well in advance and
advice OWNER for procurement. OWNER shall procure them, ensure
its availability as and when required and supply to the CONTRACTOR.

(k) All CONTRACTOR’s Equipments, its Spares and maintenance

consumables etc., purchased by CONTRACTOR for the services is the
property of CONTRACTOR.

(l) Routine inspection and refilling of lubricants for all bearing

points/Gear boxes.

(m) To Maintain log sheet for running hours & maintenance schedule etc.

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(n) CONTACTOR shall provide maintenance consumables which are used

for only maintenance activities such as welding electrode, Oxygen
and acetylene gas, Grinding wheel, cotton waste, cleaning agents,
Emery paper and paint for touch up work.

(o) Pulley lagging shall be in CONTRACTOR scope.

(p) Belt Vulcanizing and Hot & Cold Patch work shall be in CONTRACTOR
scope.

(q) Supply all the tools and tackles for executing the Services of the
Plant.

(r) CONTRACTOR shall be responsible for AMC and Technical Expert

service

(s) All spent oil shall be collected and returned by the CONTRACTOR to
the stores.

(t) The CONTRACTOR shall be responsible for the housekeeping of his

own office and other areas used exclusively by him for his staff or for
storing his material and equipment.

(u) Provide work uniforms and special job-safety equipment of any kind
(PPE) required for its personnel such as helmets, goggles, safety
shoes, gloves, tie-offs, welding shields, observation shields, hot
environment suits, leggings for hot area cleaning, confined space
entry equipment as per acceptable standards.

(v) Arrange for planning or review meetings to take place on such dates
as may be reasonably requested by OWNER’s Representative, to
discuss any matter related to services, and in particular, to
coordinate and align CONTRACTOR’s guaranteed plans with the
target of OWNER’s Stacker & Reclaimer system requirements.

2.2 Conditions and Exclusions to CONTRACTOR’s Responsibilities:

(a) CONTRACTOR’s tasks, obligations and responsibilities as set out in

Article 2.1 are always subject to OWNER having complied with its
obligations as set out in Article 2.3. CONTRACTOR will not be
responsible for any failure to carry out its obligations, nor for any
defect, non-operation etc., which is not attributable to
CONTRACTOR, such as but not limited to:

 failure in any part of the Plant due to faulty design, material,

manufacturing, installation, commissioning, operation, entry of
foreign materials; and

 Supply of insufficient or improper utilities, non-availability of

spare parts, defective civil and structural design and/or works.

(b) CONTRACTOR is under an obligation to perform the Services at a

level to be expected from a well-experienced, well-reputed company

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within the Mining Industry. CONTRACTOR is under no obligation to

modernize or keep up-to-date of Plant, or any of the plans, systems
or programs to be delivered under this Agreement, unless explicitly
set out herein.

(c) CONTRACTOR reserve the right to replace any employee/employees

by another person suitable for the job and this will be done without
affecting work and with the consent of OWNER.

2.3 OWNER Obligations and Responsibilities

(a) The OWNER shall be responsible for obtaining all Permits necessary
for fulfilment of its obligations under this Agreement.

(b) OWNER shall release payments to the CONTRACTOR as per the

provisions of this agreement specified in the Article 3.

(c) Ensure that none of its employees, agents or sub-contractors or its

Representative, take any steps which could adversely affect
CONTRACTOR’s obligations and responsibilities under this
Agreement.

(d) Ensure that all faults, errors or dysfunctions as per Punch Lists
submitted by CONTRACTOR are remedied within a reasonable time.
CONTRACTOR’s responsibility for any equipment and its guarantee
on performance will not be considered until the corresponding punch
list items are remedied.

(e) Obtain and renew all necessary governmental approvals and licenses
for Operation of the Plant.

(f) Provide continuously, adequate quantities of all the necessary

materials including, but not limited to all spare parts, lubricants and
all other utilities like fuel, water, electric power, diesel oil etc., that
needed for the proper operation of the Plant as free issue material.
The OWNER shall issue the spares and consumables ex-stores.

(g) The OWNER shall provide crane/hydra for lifting the

spares/consumables and loading them onto the truck provided by
the CONTRACTOR.

(h) OWNER shall provide all specialized tools including any special
welding electrodes.

(i) Housekeeping of the equipment shall be in OWNER scope.

(j) Any breakdown due to the reasons not attributed to the contractor
scope of services and major/annual shutdown. However
CONTRACTOR shall depute its man power on chargeable basis as per
annexure 1.

(k) OWNER shall be responsible for all renovation, modification and up

gradation of equipment, structures, any painting & anticorrosion

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treatment etc., and supply of any kind of steel for maintenance.

However, where any welding/cutting is carried out by the
CONTRACTOR as part of his maintenance activities, the
CONTRACTOR shall be responsible for carrying out touch up to the
satisfaction of the OWNER.

(l) In case of emergencies and exigencies, the CONTRACTOR shall fully

support the OWNER. If the exigency is not related to the normal
scope and work of the CONTRACTOR, and if it leads to any additional
cost/effort by the CONTRACTOR, the OWNER agrees to reasonably
compensate the CONTRACTOR for its additional cost/effort and same
shall be settled through mutual consent.

(m) OWNER shall arrange vulcanizing machine along with vulcanizing

compound/adhesive kit for belt splicing and patchworks.

(n) OWNER shall arrange rubber/ceramic material and adhesive

compound for Pulley Lagging.

(o) Motor rewinding, Cable Jointing and transformer oil cleaning shall be
in OWNER Scope.

(p) OWNER shall be Responsible for Civil and Structural & Track
Maintenance.

(q) OWNER shall be responsible for Maintenance of yard conveyor.

(r) OWNER shall equip and maintain the mechanical & electrical
workshop with necessary machines and allow CONTRACTOR to use
the facility as and when required during execution of services.

(s) OWNER shall provide training to all CONTRACTOR’s employees

regarding the safety practices and procedures to be followed at
Plant.

(t) OWNER shall supply mobile lifting equipment/heavy earth movers

(Hydra, Crane etc.) as and when required during execution of
services and heavy earth movers like dozer (Front End Loader),
excavator etc., OWNER shall be responsible for the Maintenance of
these equipments.

(u) Specialized tests such as Laser alignment, vibration analysis, oil and
grease sampling, etc., shall be outside the scope of the
CONTRACTOR. If it is found necessary to carry out such specialized
tests, same shall be arranged by the OWNER at his cost. However,
the CONTACTOR shall render all help and assistance to such
specialized testing agencies when they undertake the testing.

(v) Overall plant’s (machines, equipments and other general facilities)

watch and ward/security shall be in OWNER’s Scope.

(w) The OWNER shall provide access to their occupational health centre
to CONTRACTOR’s personnel.

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(x) OWNER shall provide space for the CONTRACTOR’s site office.

(y) OWNER shall provide land line telephone and internet connection.
The electricity and portable water for CONTRACTOR’s site office shall
be provided by the OWNER on free of cost.

(z) Insurance coverage for the equipments coming under Maintenance.

(aa) Provide CONTRACTOR a hard/soft copy of:

 all project documents relevant to the performance by

CONTRACTOR of the obligations and responsibilities stipulated in
this Contract;

 any instructions, procedures and recommendations available and

issued by any manufacturer and/or Supplier of equipment,
machinery or material used at the Plant, and

 all other available technical and operational information with

respect to the Plant, including specifications, installation
protocols, as-built drawings, diagrams, Maintenance manuals,
manufacturer’s quality assurance documents, job books and all
other pertinent data, information and documents in OWNER’s
possession.

In case the environmental laws and/or other regulations impose new obligations
that cannot be fulfilled within the Plant’s design guarantee figures, OWNER shall
take the necessary actions to upgrade the Plant to meet new rules and
regulations. OWNER shall bear the cost of required upgrading.

OWNER shall also be liable to provide the following only at its best effort
basis:

Plant:

(a) OWNER is responsible for general maintenance of roads and the area
between roads and equipment at the Plant.

(b) Adequate road lighting and lighting around equipment shall be

provided.

(c) Permanent supply of plant utilities to be ensured for the operation of

the plant from the effective date of Agreement.

(d) OWNER shall maintain the fire fighting equipments for its proper
function.

(e) High-speed broad band Internet connection lines, which shall be

ADSL or its equivalent.

(f) Provide amenity buildings sufficient for CONTRACTOR´s labourers

equipped with toilet facilities at feed & discharge ends.

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(g) CONTRACTOR’s personnel can avail canteen facilities at same terms

and charges applicable for OWNER's staff

(h) OWNER shall provide drinking water at free of cost.

(i) Uninterrupted power supply for CONTRACTOR site offices.

(j) Provide adequate on-site warehouses at CONTRACTOR’s disposal for

storage of materials, Consumables and Spare Parts required for the
general upkeep and proper maintenance of the Plant.

(k) OWNER shall provide permanent gate pass to the CONTRACTOR

employees.

OWNER shall provide safety at Plant site only as per industry practices:

(a) Provide equipments and installation as foreseen by legal

requirements for fire-fighting; such equipments shall pass the
relevant test standards of national regulations.

(b) Provide fire-fighting truck according to national regulations.

(c) CONTRACTOR shall be responsible for the removal of temporary

works, debris, wastes, etc., generated while discharging its
obligation under this Agreement.

If OWNER is unable to fulfil its obligations as set out herein in due time,
CONTRACTOR shall notify OWNER of the influence hereof on CONTRACTOR’s
performance including potential suspension, and CONTRACTOR shall not be liable
for any consequences of such shortcomings.

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Article 3: Price

3.1 In consideration of all Services provided by CONTRACTOR under the

Agreement, OWNER shall pay to CONTRACTOR a lump sum price on a
monthly basis as per the table given below:

Monthly Annual
Contract Base Price
YEAR DESCRIPTION OF JOB
Price (INR (INR
Crores) Crores)

Year 1 xxxx xxxx

Year 2 xxxx xxxx
Maintenance of Stacker &
Year 3 xxxx xxxx
Bucket Wheel Reclaimer
Year 4 xxxx xxxx
Year 5 xxxx xxxx
Total Contract Value xxxx

The Price above covers the services to be provided under this Agreement.

Notwithstanding anything contained herein, for this purpose a year shall

be counted as 12 full months commencing from the date, on which the
Maintenance of the Plant is handed over to the CONTRACTOR by the
OWNER (not exceeding 3 months, under any circumstances, from the date
of execution of this Agreement), of every calendar year and ending on the
preceding date, of such handover, of the succeeding calendar year.

3.2 For avoidance of any doubt, the annual base price indicated in the above
table is exclusive of service tax. In case of any revisions in the direct
statutory duties/taxes/cess/levies/wages the same shall be borne by
OWNER from its effective date and Agreement shall be amended
accordingly.

Article 4: Performance Guarantee and Liquidated Damages

This guarantee is given on the basis that OWNER has complied with all
obligations and responsibilities as set out in the Article 2.3 under this agreement
and sets targets sufficient to achieve the guarantee.

4.1 Plant Availability Targets shall be as below:

a) CONTRACTOR shall stand for a Guarantee of 90% of the Plant

availability when OWNER requires the Plant in operation.

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b) In case the Plant is not available beyond 10%, by the reason

attributed to the CONTRACTOR, OWNER shall deduct an amount of
x% of the monthly price per percentage loss in availability. The
cumulative overall price reduction as penalty in a month is limited to
maximum of x% of the monthly price. This will not be applicable if
the OWNER has not allowed minimum 10% time in the month for
preventive/condition based maintenance, excluding the major jobs
like belt replacement, annual shutdown/overhauling etc., if required
as per the Preventive Maintenance schedule.

c) If the Plant availability is achieved above 95%, a bonus of x% of

monthly price per percent gain above 95% but limited to a maximum
of x% of monthly contract value shall be paid.

The cumulative overall price reduction as penalty in a month under

liquidated damage or any other provisions of this Agreement shall be
limited to maximum x% of the monthly contract price.

4.2 Should OWNER wish the CONTRACTOR to operate the Plant with
alternative material to be conveyed or methods, then CONTRACTOR shall
not be responsible of the impact of such decision on the level of
guaranteed availability of the plant and life/consumption of the parts and
consumables.

4.3. In case the break down or the failure is due to the "FORCE MAJURE” and
Infant & Chronic failures due to discrepancy of design, material,
manufacture, installation and entry of foreign materials etc., then the
penalty to the CONTRACTOR shall not be applicable.

4.4 The Performance Guarantee under this contract shall become effective
only after the PG test is conducted and proved by the OWNER/Main
Supplier. Any shortfall in the guarantee due to discrepancies of Main
Supplier scope of services, contractor shall not anyway be held
responsible.

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LIST OF ANNEXURES

Annexure-1 : Additional Scope of Services:

Rate for Manpower

Annexure-2 : List of Equipment Covered Under the Agreement

Annexure-3 : List of Manpower for Operation & Maintenance

Annexure-4: Key Performance Indicators (KPIs)

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ANNEXURE-1

ADDITIONAL SCOPE OF SERVICES

Rate for Manpower:

Man-Day* Rate
S.No. Category
(IN INR)

01 ENGINEER xxxx

02 SUPERVISOR xxxx

03 FITTER/TECHNICIAN xxxx

04 WELDER xxxx

05 CUTTER xxxx

06 RIGGER xxxx

07 HELPER xxxx

*Man-Day shall mean 8 hours of working per person per day. The Man hour
rate is for the first contract year and an escalation rate of 15% per annum
shall be considered from second year onwards.

Note:
Tax: All taxes and duties will be extra at actual.

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ANNEXURE-2

List of Equipment Covered Under the Contract

Sl. No. Description Nos.

1. Stacker 1

2. Bucket Wheel Reclaimer 1

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ANNEXURE-3
List of Manpower for Maintenance

Shift
General
S.No. Description/Category Total
Shift Relieving
A B C Shift
(Reliever)
General and Technical
Staff
1 Plant Manager 1 0 0 0 0 1
Mechanical Maintenance
2 1 0 0 0 0 1
Engineer
3 E&I Maintenance Engineer 1 0 0 0 0 1
4 Admin In-charge 1 0 0 0 0 1
5 Safety In-charge 1 0 0 0 0 1
Mechanical Maintenance
6 0 1 1 1 1 4
Supervisors
7 Safety Steward 0 1 1 1 1 4
8 Stores Keeper 1 0 0 0 0 1

Maintenance Crew
1 Millwright Fitter 1 0 0 0 0 1
2 General Fitter 1 1 0 1 1 4
3 Welder cum Gas Cutter 1 1 0 1 1 4
4 Rigger 2 1 0 1 1 5
5 Technicians 2 1 0 1 1 5
6 Hydraulic Technician 1 0 0 0 0 1
7 Helper 2 1 0 1 1 5

E & I Crew
1 Electricians 2 1 1 1 1 6
Control and Instrument
2 1 0 0 0 0 1
Technician

Non -Core Activities

1 Office Assistant 1 0 0 0 0 1

GRAND TOTAL 20 8 3 8 8 47

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ANNEXURE-4

Key Performance Indicators (KPIs):

𝐶𝑎𝑙𝑒𝑛𝑑𝑒𝑟 𝑇𝑖𝑚𝑒−𝑀𝑎𝑖𝑛𝑡𝑒𝑛𝑎𝑛𝑐𝑒 𝐷𝑜𝑤𝑛𝑇𝑖𝑚𝑒

 Availability = 𝐶𝑎𝑙𝑒𝑛𝑑𝑒𝑟 𝑇𝑖𝑚𝑒
=90%

𝑁𝑜 𝑜𝑓 𝐿𝑜𝑠𝑡 𝑇𝑖𝑚𝑒 𝐼𝑛𝑗𝑢𝑟𝑖𝑒𝑠

 Safety = × 1,000,000 𝐻𝑟𝑠 = <1
𝑇𝑜𝑡𝑎𝑙 𝑀𝑎𝑛 𝐻𝑜𝑢𝑟𝑠

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