Contract Issues

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Two Alternative Contract Strategies

Contract issues discussion

Strength - Weakness

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If you like challenges, try an interface

Why EPC contract

• Single point responsibility for safety, progress, quality and warranties

• Potential for reduced execution time

• Potential for reduced investment costs

• Few contractual interfaces

• Multi discipline execution and coordination

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EPC alternatives

Main alternative EPC Contracts: FIDIC, NTK/NF and NS 8407

• FIDIC: «no» tradition in Major Norwegian Industry Companies

• NTK/NF: used extensively by Major Norwegian Industry Companies in Norway and abroad, on- and offshore (Statoil, Hydro, Norske skog, etc.)

• NS 8407: used by JBV, Statsbygg, SVV and construction generally in Norway.

FIDIC: Fédération Internationale Des Ingénieurs-Conseils NTK/NF: Norsk totalkontrakt/Norsk fabrikasjonskontrakt NS: Norsk standard

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NS 8407

• 1938: NS 401 • 1952: NS 401 A. • 1969: NS 3401 • 1991: NS 3430 • 1992: NS 3431 (totalentreprise (EPC)) • 2004 :NS 8405 • 2006: NS 8406 («enklere variant» av NS 8405) • 2008: NS 8405 (mindre revisjon) • 2011: NS 8407 (totalentreprise (EPC))

Merk: NS 3431 og NS 8407 er totalentrepriser, øvrige NS er byggherrestyrte kontrakter.

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NTK/NF

• 1974: Norsk Hydro contract for Ethylene Plant, Rafnes • 1977: Norsk Hydro Model Contract • 1983: North Sea Offshore Lump Sum Construction

Contract (MVL (=Norsk industri) and NIFO) • 1987: Norsk Fabrikasjonskontrakt 1987 (NF 87) • 1992: NF 92 • 2000: Norsk Totalkontrakt 2000 (NTK 2000) • 2005: NF 05 • 2005: NTK 05 • 2007: NF 07 • 2007: NTK 07

7 Note: NTK is EPC («design-build»); NF is PC («design-bid-build»)

NTK/NF vs NS

NTK07/NF07 • Structured with

Attachments. • Used by major Norwegian

industry companies domestically and abroad. Good experience.

• More Owner friendly than NS 8407, e.g. NO preclusion regarding changes.

NS 8407 • Layer-on-layer principle

(«mountain» of contradictory pages).

• Not used by major Norwegian industry companies.

• Not Owner friendly, e.g. preclusion regarding changes.

Conclusion: FB will use NTK07 modified; NS 8407 is too risky. 8

The Approved Contract Strategy

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The Appoved Contract Strategy

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Requirements on our Contractors

High safety standard

• Documented excellent safety record at previous

projects

• Bidders to describe in detail how to obtain top

class safety standard at FB sites

Ability to perform the work according to agreed

quality, schedule and cost

• Experienced and competent organization

Ability to cooperate with client

• Construction close to tracks in operation

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Requirements on Ourselves

High Quality ITT’s and Contacts

• High Quality Geotechnical Baseline Report (GBR)

• Fair sharing of risk

• Fair and clear compensation mechanisms

Walk-to-Talk

• Role model on safety issues

• Keep our sheet clean (e.g. no delay on approvals

of drawings, etc.)

• We keep what you promise

Make the Contractors good

• Enable the Contractors to excel

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Main Follo Line Contracts

Oslo S Tunnel

Ski D&B TBM

EPC Oslo S EPC D&B EPC TBM EPC Ski

Substructure

(~ 2 mrd. NOK)

Substructure

(~1 mrd. NOK)

Substructure

(~ 7 mrd. NOK)

Substructure

(~ 2 mrd. NOK)

+ Railway Systems

(~ 0,5 mrd. NOK)

+ Railway Systems

(~ 1,2 mrd. NOK)

+ Railway Systems

(~ 0,7 mrd. NOK)

Signal (Oslo S GS extension) (~ 0,4 mrd. NOK) EPC Signal (Thales) (~ 0,5 mrd. NOK)

Clean interface to Main EPC’s & Enhancement of Owner organisation

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Type of Scope Oslo S Langhus-Ski Oslo - Ski

Clean Interface to Main EPC’s Preparatory Work

Demolition Demolish: Borgen Garasjen Presenningtørka Fyrhus

Modify part of Skeidarbygget Demolish Omformerhall

Technical Scope Locate and relocate cables Prep. Work for track and rail tech.

Locate and relocate Cables Extend Cable bridge

Establish power supply to Åsland for 4 TBM and segment prefab.

Rig Areas, adit tunnels Rig area Oslo S Rig area Langhus Rig area Åsland Adit tunnel Åsland Prep. Work Sydhavna (soil transp.)

Enhancement of Owner Organisation

Project Service Agreement (PSA)

Technical resources Technical resources Technical resources

Follobanen Langhus – Ski og

Ski hensetting

Informasjonsmøte 24. oktober 2012

Questions?

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