Conclusion of contracts with OGP Gaz-System S.A. for the construction of the DN1000 gas pipeline Pogórska Wola - Tworzeń, Parts 1 and 2

With reference to the current report 19/2019 dated 19 April 2019, the Management Board of STALPROFIL S.A. informs that on 9 July 2019 it learned about signing by OGP Gaz-System S.A. of two Agreements between STALPROFIL S.A. (Contractor), and OGP Gaz-System S.A. with its registered office in Warsaw (Ordering party), whose subject is the general implementation of two of the three parts of the Pogórska Wola - Tworzeń gas pipeline DN1000 MOP 8.4 MPa with associated facilities and infrastructure necessary for its operation, including:
1. Contract for general implementation of Part 1 of the Pogórska Wola gas pipeline - Tworzeń DN1000 - Section Pogórska Wola - Pałecznica, about 78 km long and net value of 272 898 762.14 PLN,
2. Contract for general implementation of Part 2 of the Pogórska Wola gas pipeline - Tworzeń DN1000 - Section Pałecznica-Braciejówka about 56 km long and net value of PLN 141,000,000.00.
The deadline for completing the investments listed in points 1 and 2 have been agreed by the parties for 28 months from the date of conclusion of the aforementioned Agreements.
In order to secure the claims of the Ordering Party due to non-performance or improper performance of the Contracts, the Contractor provided security in the form of a guarantee of proper performance of each of the Agreements concluded, including removal of defects and faults 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 the delay in making the Final Receipts in relation to the dates indicated in the Agreements:
- 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 a delay in making the Final Acceptance in relation to the date specified in the Agreement may not exceed 15% of the net remuneration.
In the event 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 each Contract.
The Ordering Party has the right to claim supplementary compensation, exceeding the amount of contractual penalties stipulated in these Agreements, on the general principles of the Civil Code.
The concluded contracts should, during their implementation, significantly affect the growth of revenues 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 said Agreements.