2. Performance Test Schedule and Certificates. 2.1 Definitions

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1 2. Performance Test Schedule and Certificates 2.1 Definitions Unit shall mean the complete Power Station Assembly/Unit as defined in the Agreement (which consists of equipment provided by Contractor and by others) Equipment Package shall mean the Equipment to be provided by the Contractor under this Contract for a related Unit as defined in the Agreement Shop Test and Shop Test Report shall mean a performance test conducted at the manufacturer s facilities (if applicable, as agreed upon and stipulated herein) and a report of the values observed, measured, recorded and analyzed in the course of such test, respectively Erection and/or Installation shall mean all the on site erection and installation activities, as applicable, including fabrication, assembly, construction, alignment, leveling, installation, interfacing, piping, welding, preheating, annealing, insulating, lagging, painting, grouting, fastening and anchoring, clearing, checking, oil filling and treating, adjusting, quality testing, and all other activities and procedures not specified in detail in this Annexure or in the Specification (Annexure B ), which are necessary for the proper installation of the Equipment Package to allow its Commissioning and effective operation Commissioning is the process of taking the Equipment Package from its agreed state of completed Erection to the point where its ability to meet its design and commercial requirements can be demonstrated through operation. The Commissioning consists of two major stages, Cold Commissioning and Hot Commissioning, as follows: Cold Commissioning of an Equipment Package is the process of verifying completion of all the mandatory erection works and preoperation checks of each Equipment Package with the related Unit in accordance with a check list to be established during the detail design stage by mutual agreement (not to be unreasonably withheld) of Purchaser and Contractor to allow first start up of the Equipment Package. Rev D 3

2 Hot Commissioning of an Equipment Package is the process of taking said Equipment Package with the related Unit from the agreed state of completion of Cold Commissioning, through the stage of first start up of the Equipment package to the point of demonstrating safe and reliable operation of the Equipment Package with the related Unit, the Equipment Package having successfully performed twelve (12) hours of continuous operation (excluding normal interruptions not attributable to Contractor) at 95% or more of its Rated Load and being ready to start the Trial Run Trial Run is a process of preliminary tuning and demonstration of effective operation, including without limitation, flexibility of operation and inherent reliability of the Equipment Package, Characterized as follows: Readiness to Start the Trial Run shall mean completion of Erection, Cold and Hot Commissioning Preliminary Tuning is the procedure of setting the adjustable measures (instruments, software parameters) of the Unit including the Equipment Package to achieve simultaneously two major objectives: (a) (b) Safe, reliable and smooth change-over through all the operating conditions and loading sequences meeting the functional and operational requirements as detailed in the Specification, Annexure B. Performances in the range of the Minimum Performances Acceptable for Provisional Acceptance, as detailed in Article 1 of this Annexure D Successful Completion of the Trial Run of an Equipment Package shall mean that said Equipment Package has been available for safe and reliable operation in all modes of operation at more than 95% of said Equipment Package Rated Load as demonstrated by means of onbase measurement instruments, without any limitation, for a continuous period of four weeks (excluding interruptions not attributable to said Equipment and excluding up to 2 interruptions of no more than 6 hours each attributable to the Equipment). Rev D 4

3 In case the Equipment Package can not meet the operational and loading requirements as detailed above for reasons attributable to the Contractor, the count down of four weeks shall restart Performance Tests are those tests conducted to verify that the Equipment Package allows the Unit to actually achieve the performance levels Guaranteed by Contractor with respect to the performance parameters tabulated in Article 1 of this Annexure. With respect to such Performance Tests the following definitions shall apply: Provisional Acceptance Tests and Provisional Acceptance Test Report shall mean Performance Tests conducted after Successful Completion of the Trial Run and a report of the values observed, measured, recorded and analyzed in the course of such tests, respectively Provisional Acceptance of the Equipment Package shall mean, without derogation from the general definition in the General Conditions, Successful Completion of the related Trial Run and that said Equipment Package has gone through a Provisional Acceptance Test and was found to meet all the Minimum Performance Levels as documented in the Provisional Acceptance Test Report Provisional Acceptance Certificate shall have the meaning as set forth in the General Conditions, namely, a certificate issued to the Contractor stating the date upon which Provisional Acceptance of the Equipment Package has been achieved Final Acceptance Test and Final Acceptance Test Report shall mean a Performance Test of an Equipment Package to be conducted at Purchaser s discretion at any time within six (6) months after Provisional Acceptance Test of said Equipment Package and prior to its Warranty cut off date, and a report of values observed, measured, recorded and analyzed in the course of such tests including a final comparison of the actual performance levels with the related Guaranteed Performance Levels, respectively Reserved Reserved. Rev D 5

4 Final Acceptance of the Equipment Package shall (only) mean that the Guaranteed Performance Levels in accordance with the Final Acceptance Test Report are either met or compensated for in accordance with the Contract The Performances Guaranteed by the Contractor are tabulated in Article 1 of this Annexure using the following definitions: Guaranteed Performance Parameters shall mean the technical definition of the guaranteed feature/quality Guaranteed Performance Levels shall mean the level guaranteed in the applicable unit of measure that has to be achieved and demonstrated through the Final Acceptance Test to allow issuing the Contractor a Final Acceptance Certificate (FAC), as detailed below Minimum Performance Level shall mean a performance level within a tolerable range of deviation from the related Guaranteed Performance Level, which has to be achieved and demonstrated through performance testing as a precondition for issuing the Contractor a Provisional Acceptance Certificate (PAC), as detailed below The types of parameters guaranteed by the Contractor are tabulated in Article 1 of this Annexure using the following definitions: L.D. Parameter shall mean a performance parameter where the Contractor is liable to pay liquidated damages for under performance at the rates specified in Article 5 below (hereinafter Liquidated Damages for Under Performance or LDUP ) A.D. Parameter shall mean a performance Accept-Decline parameter where the Equipment Package is either Accepted for normal operation or declared to be in material non-conformance with the Contract requirements and therefore Declined for normal operation Unit Contract Price shall mean the contract price allocated for the Equipment Package, as defined and stipulated in the Agreement, without the Cost of Financing. Rev D 6

5 Rated Load of an Equipment Package shall mean achievement of the design parameters as set forth in Part 1 for Demineralized Water flow rate of 440 m 3 /hr. 2.2 Scheduling requirements and related Purchaser s and Contractor s responsibilities The major on site activities/milestones in putting an Equipment Package into operation with the related Unit are as follows: 1. Erection. 2. Cold Commissioning. 3. Hot Commissioning 4. Notification to Contractor of the Expected Provisional Acceptance Date (as defined in the General Conditions Annexure A ). 5. Readiness to start the Trial Run. 6. Trial Run including Preliminary Tuning. 7. Provisional Acceptance Tests. 8. Provisional Acceptance and issuance of PAC (where adequate). 9. Final Acceptance Test During the design phase of the Equipment Package and as scheduled in the Documentation Submission Schedule, the Contractor shall submit the Instruction Manual in its preliminary format which allows installation, operation and maintenance of the Equipment Package in an adequate, safe and reliable manner, and shall provide detailed test procedures for all the Guaranteed Performance Parameters for Purchaser s review and approval During the Commissioning phase, prior to starting the Trial Run, the Contractor shall nominate an authorized representative to witness the Provisional Acceptance Tests and confirm Test measurements The Trial Run shall be scheduled to start at Purchaser s discretion after successful completion of Hot Commissioning Upon Readiness to start of the Trial Run the Purchaser shall notify the Contractor in writing of the Expected Provisional Acceptance Date (as defined in the General Conditions Annexure A ), eventually allowing 90 days for the successful completion of the Trial Run and the Provisional Acceptance Tests. Rev D 7

6 2.2.6 During the Trial Run the Purchaser and the Contractor shall determine by mutual agreement the timing, duration, conditions, preparations, extent of testing and other factors of the Provisional Acceptance Tests Prior to each Provisional and/or Final Acceptance Test, the Purchaser shall provide detailed lists of the measuring instruments and their calibration records After Successful Completion of the Trial Run, the Purchaser shall conduct Provisional Acceptance Tests to verify that the Equipment Package actually achieves the Minimum Performance Levels for the related Performance Parameters listed in Article 1 above. The Contractor shall be given an advance notice and its representative(s) shall be given full access to witness (at Contractor s expense) these tests After completion of measurements and recording test results the Purchaser shall issue a Provisional Acceptance Test Report including analysis of performances The Purchaser undertakes to make all the necessary coordination, provide all the necessary labor force and all the necessary consumables, and conduct the Provisional Acceptance Tests within a period of two (2) weeks, as soon as practically possible (taking into consideration the balance of plant functionality and the grid requirements) following the Successful Completion of the Trial Run, and to issue the Provisional Acceptance Test Report within six (6) weeks thereafter In all cases the Purchaser shall be entitled to perform a Final Acceptance Test for an Equipment Package within six (6) months after related Provisional Acceptance, and to issue the Final Test Report within six (6) weeks thereafter, however prior to said Equipment Package Warranty cut off date, in order to finally and accurately determine the extent of compliance of the Equipment Package actual performance levels with the Guaranteed Performance Levels. The Contractor shall be given an advance notice and its representative(s) shall be given full access (at Contractor s expense) to witness these tests. 2.3 Scope of testing and analysis of results Each Equipment Package supplied under this Contract should meet - as part of the basic scope of Work, and without derogating from any other contractual requirement - each of the Guaranteed Performance Levels specified in Article- 1 above. Rev D 8

7 2.3.2 The Purchaser may test each Equipment Package to verify achievement of the Guaranteed Performance Levels The Guaranteed Performance Levels stipulated in Article 1 above should be interpreted as already accounting for sufficient degradation allowance with respect to an Equipment Package until its related Warranty cut off date The performances of the Equipment Package shall be tested in accordance with the latest editions (valid on the date of Signature of the Contract) of the following: a. ANSI: American National Standards Institute, Inc. b. ASME: American Society of Mechanical Engineers. c. ASTM: American Society for Testing and Materials. d. AWS: American Welding Society. e. HEI: Heat Exchange Institute. f. API: American Petroleum Institute. with all the conforming procedures attached hereto [to be provided by Contractor as part of its proposal] and the detailed procedures to be provided for Purchaser s review in accordance with sub article above The Performance Tests shall be performed and analyzed as follows: Prior to Performance Testing, if applicable, the Equipment Package shall be tuned by Purchaser and Contractor The Performance Test shall be conducted under conditions as close as possible to the conditions assumed for the Guaranteed Performances All Guaranteed Performances shall be tested and achieved simultaneously for each load The Performance Tests shall be evaluated in accordance with the correction curves / formulas for deviations of the actual test operation conditions from the design conditions provided by the Contractor and attached hereto [to be submitted during the technical evaluation stage as part of the proposal]. Rev D 9

8 Test results shall be reported as calculated from test observations, using calibrated instruments by an internationally accredited traceable laboratory, applying Zero tolerance to the measurements results Both the Purchaser and the Contractor shall certify the test observations in writing. 2.4 Acceptance Certificates With respect to Provisional Acceptance Certificate: The Purchaser shall issue a Provisional Acceptance Certificate for an Equipment Package provided that: The Unit with the Equipment Package have Successfully Completed the Trial Run as defined in article above; and The Unit with the Equipment Package achieved all the Minimum Performance Levels as indicated by the Provisional Acceptance Test Report as defined in article above With respect to Final acceptance Certificate: The Purchaser shall issue a Final Acceptance Certificate for an Equipment Package provided that: The related Final Acceptance Test was successfully completed and said Equipment Package achieved all the Guaranteed Performance levels as indicated by the Final Acceptance Test report The Equipment Package achieved in the Final Acceptance Test all the Minimum Performance levels and to the extent applicable the Contractor paid the Purchaser Liquidated Damages for Under Performance. 3. Performance Testing, Rectifying Procedures and Contractor s Responsibilities Rev D 10

9 3.1 The Contractor shall conduct at Contractor s expense, if applicable, Shop Performance Tests (in case such tests are called for by the Contract) as an integral part of its Inspection and Test Plan and all the Contractual requirements pertaining to Quality Control and Quality Assurance shall apply thereto. The Purchaser shall witness these tests and shall be entitled to obtain independent test data by installing in parallel to Contractor s test instruments its own instruments and/or shall be allowed at its own discretion to introduce random upsets to verify proper response of the Equipment Package. Successful results indicated by the Shop Test Report and approved by Purchaser shall form in such case a pre condition for delivery to Purchaser. 3.2 The Purchaser shall conduct at Purchaser s expense the Provisional Acceptance Tests and the Final Acceptance Tests. 3.3 Upon completion of the Provisional Acceptance Tests, then: In case one or more of the Minimum Performance Levels of the Equipment Package has not been achieved due to any fault attributable to the Contractor, then: or The Purchaser shall not issue a Provisional Acceptance Certificate; The Purchaser shall be entitled to put the Equipment Package into operation as part of the operation of the Unit, provided however that the Purchaser will take all the necessary measures to ensure that the Equipment Package will not be damaged by such an operation; For any period the Equipment Package is out of operation (for reasons attributable to the Contractor), the Contractor shall be liable for delays in Provisional Acceptance (as set forth in the General Conditions, Annexure A ) and shall be obliged within a period of thirty (30) days to propose corrective measures and implement them as further detailed in sub article 3.4 below; Immediately after completion of the corrective measures the Purchaser and the Contractor shall retest the Equipment Package; In case all the Minimum Performance Levels of the Equipment Package has been achieved, then: Rev D 11

10 The Purchaser shall promptly issue a Provisional Acceptance Certificate as detailed above; The Purchaser shall be entitled to put the Equipment Package into operation as part of the operation of the Unit; The counting of WP1 months (as set forth in the Agreement) towards the expiration of the Warranty period for the related Equipment Package shall begin; The Contractor shall be entitled, if necessary and subject to the provisions of sub article 3.4 below, to propose and implement within the first one (1) month after Provisional acceptance, corrective measures, to improve the performance levels of the Equipment Package. In case Contractor elects to improve the performance levels, the Purchaser shall in addition to the periods when the Unit is undergoing scheduled and/or unscheduled outages allow the Contractor up to four (4) days as non-penalised downtime to perform corrective work. However the Purchaser and Contractor shall reasonably agree when these four days shall occur. If the Contractor exceeds these four days the Contractor shall be liable for payment of liquidated damages for deemed delays as further detailed in sub article 3.6 (c) below. The Purchaser shall not unreasonably interfere with the Contractor s preparation for and repetition of any Performance Test. The Warranty period for the related Equipment Package shall be extended by a period equal to the period during which said Equipment Package cannot be used by reason of Contractor performing corrective measures during unplanned shutdowns attributable to the Contractor. 3.4 In case the Contractor either have to (under above) or wishes (under above) to propose corrective measures, the Contractor shall analyze the deficiency, and propose such measures (hereinafter the Repair Plan ) necessary to bring the performance of the Unit with the Equipment Package up to the Guaranteed Performance Levels (hereinafter the Repairs ). The Repair Plan shall indicate the period within which the Repairs are to be completed (hereinafter the Repair Period ) including all direct and indirect activities, such as diagnosis, technical details, restoration, final checks, testing, etc. Rev D 12

11 The Repair Plan shall meet the following requirements: (a) (b) (c) (d) Replacement or repair of defective components. Minimum reduction of power output. Shortest possible down-time. Re-Testing by Purchaser and witnessing by Contractor. 3.5 The Purchaser shall review the proposed Repair Plan and shall reasonably endeavor to let the Contractor implement it, as soon as possible, subject to mutual agreement on timing, warranty extension for down time in excess of four (4) days, duration, scope, test procedure and expected performance levels. 3.6 In case a Repair Plan is agreed upon, the Contractor shall: (a) (b) (c) (d) Utilize the Repair Period conscientiously and make good faith attempts to adhere to its obligations according to the Contract. Bear the entire costs of the Repairs and of such further tests (excluding the costs of the Final Acceptance Test) as may be required to demonstrate that the Unit with the Equipment Package has achieved the Guaranteed Performance Levels. Pay liquidated damages for deemed delays (hereinafter LDDD ) for the periods stipulated as applicable in article above, where the amount payable as LDDD shall be at the same rates specified in Annexure A for delays in Provisional Acceptance and shall form an integral part thereof. Extend the Warranty Period to compensate for the periods during which the Equipment Package is in the process of being repaired and is non available for power generation. 3.7 After the Repair Period as detailed above and prior to the related Warranty cut off date the Purchaser shall perform the Final Acceptance Test and shall issue the Performance Test Report and the following shall apply: In case the results of the Final Acceptance Test indicate that the performance of the Equipment Package does not meet a Minimum Performance Level with respect to any L.D. Parameter, or a Guaranteed Performance Level with respect to any A.D. Parameter, the Purchaser: With respect to L.D. Parameters: Rev D 13

12 a. firstly, shall allow the Contractor repair the Equipment Package upon terms and conditions to be agreed upon; then b. secondly, in the event the provisions of subarticle (a) above are not met, may avail itself of the applicable Liquidated Damages for Under Performance on the basis of the test results at the rates detailed in Article 5 below; then - c. thirdly, in the event the amount payable as Liquidated Damages exceeds the caps set forth in the Contract, may declare that the Equipment is in material non-conformance with the specification requirements and avail itself of the remedies available to the Purchaser due to a breach of a fundamental term of the Contract by the Contractor With respect to A.D. Parameters: a. firstly, shall allow the Contractor repair the Equipment Package upon terms and conditions to be agreed upon; then - b. secondly, in the event the provisions of sub article (a) above are not met, may declare that the Equipment Package is in material non-conformance with the specification requirements and avail itself of the remedies available to the Purchaser due to a breach of a fundamental term of the Contract by the Contractor In case the results of the Final Acceptance Test indicate that the performance levels of the Unit with the Equipment Package with respect to one or more L.D. Parameters do not meet the related Guaranteed Performance Levels but still meet the related Minimum Performance Levels, while the Guaranteed Performance Levels with respect to the other remaining A.D. Parameters and L.D. Parameters are fully met, the Purchaser: a. firstly, shall allow the Contractor repair the Equipment Package upon terms and conditions to be agreed upon; then - b. secondly, in the event the provisions of sub article (a) above are not met, may avail itself of the applicable Liquidated Damages for Under Performance on the basis of the test results at the rates detailed in Article 5 below. Rev D 14

13 3.8 Failure to achieve any of the Guaranteed Performance Levels with respect to the A.D. Parameters or any of the Minimum Performance Levels with respect to the L.D. parameters by the end of the Final Acceptance Test shall constitute a breach of a fundamental term of the Contract by the Contractor. 3.9 To avoid doubts in calculating Liquidated Damages for Delays in Provisional Acceptance and deemed delays of each Equipment Package, the aggregate of the following delay periods related to said Equipment Package shall be considered: a. Any period after the Expected Provisional Acceptance Date, required, for reasons attributable to the Contractor, for the Successful Completion of the Trial Run and for conducting the Provisional Acceptance Test; b. Any period after completion of the Provisional Acceptance Test, in excess of the time gained by its early completion with respect to the Expected Provisional Acceptance Date, required, for reasons attributable to the Contractor, for repairs, adjustments and retesting, to demonstrate that the Unit with the Equipment Package successfully achieved the Minimum Performance Levels (eventually the Contractor is entitled to use the time gained by early achievement of Provisional Acceptance for corrective measures later on without paying Liquidated Damages for delays for the respective period); and c. Any period after Provisional Acceptance, in excess of four (4) days, required for reasons attributable to the Contractor, for repairs, adjustments and retesting, to improve the Performances of the Unit with the Equipment Package in order to achieve the Guaranteed Performance Levels. 4. Reserved. 5. Liquidated Damages for Under- Performance (LDUP) 5.1 General Wherever the Unit with the Equipment Package does not achieve due to reasons attributable to the Contractor the Guaranteed Performance Levels with respect to any L.D. Parameter at the Final Acceptance Test, the Contractor is liable to pay Liquidated Damages for Under-Performance (LDUP). Rev D 15

14 5.1.2 The rates of LDUP stipulated below fairly represent Purchaser s estimate of the techno-economic factors that affect the extent of Purchaser s minimum direct damages in cases of failure to achieve the Guaranteed Performance Levels with respect to the L.D. Parameters The rates of LDUPs under article 5.2 below are already calculated taking into consideration the full life expectancy of the Unit namely 20 years. 5.2 Subject to the provisions stated above, the LDUPs with respect to the Equipment Package(s) shall be calculated as follows: For failure to meet guaranteed pressure drop though the hot side of each PHE of each Equipment Package - at the rate of USD 4,220 per 1.0 bar, for results in excess of the value guaranteed in item 1.2 of this Annexure For failure to meet guaranteed pressure drop though the cold side of each PHE of each Equipment Package - at the rate of USD 7,280 per 1.0 bar, for results in excess of the value guaranteed in item 1.3 of this Annexure. 5.3 The Contractor shall pay the Purchaser the amounts due as LDUPs on the basis of the rates stipulated above. However, the Contractor shall not be liable to pay LDUPs in aggregate under 5.2 above more than 10% of the Unit Contract Price for not achieving guaranteed performances by the related Equipment Package. 5.4 Failure by the Contractor to pay the amounts due within sixty (60) days of Purchaser s demand shall constitute a breach by the Contractor of a fundamental term of the Contract. - Final - Rev D 16

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