This document outlines three contracts between Power Grid Corporation of India and Hyosung Corporation of Korea for the supply and installation of gas insulated switchgear (GIS) at three substations in India. The first contract is for off-shore supply of equipment from Korea. The second is for on-shore supply within India. The third is for on-shore installation and commissioning services in India. It specifies contract prices, payment terms, completion timelines, guarantees, and an integrity pact to ensure ethical business practices between the parties.

1. CONTRACT AGREEMENT
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2. CONTRACT AGREEMENT
• GIS (gas-insulated switchgear)
Substation package-SS01 for:
• Extension of 400/220 KV
Baripada Substation (400 KV
with GIS bay & 220 KV with AIS
bay)
• -Extension of 400 KV Maithon
Substation (with 400KV GIS bay)
• -Extension of 220 KV GIS
Substation at Kishanganj
Power Grid
Corporation of India
Ltd
&
M/s. Hyosung
Corporation, Korea
&
M/s. L&T, Chennai
(Associate)

3. CONTRACT AGREEMENT
• For supply of equipment and
material from outside India and
Training outside India
First contract (Off-
Shore Contract )
• For ex-works supply of
equipment and material from
within India
Second
contract(On-Shore
supply Contract)
• for all services to be performed in India
covering; inter alia handling, port clearance,
inland transportation, insurance, handling,
storage, erection
Third contract(ON-
Shore Services
Contracts)

4. OFF-SHORE CONTRACT
AGREEMENT
• The scope of the contract
• to engage the contractor for the
CIF supply of all equipment and
materials and Training to be
conducted outside India inter-alia
including Design, engineering,
fabrication, manufacture, testing
at manufacturer’s works,
shipment, marine transportation
M/s. POWERGRID
CORPORATION OF INDIA
&
M/s. HYOSUNG
CORPORATION OF
KOREA
24th day of November
2014

5. Contract price
US$ 20,315,000
(US Dollars Twenty
Million
Three Hundred
Fifteen Thousand
Only)
the break-up of the contract price is as above

6. Contract securities
HYOSUNG Corporation, Korea
• shall provide contract performance security for
ten percent (10%) of the value of first contract,
Second contract and third contract
L&T, Chennai (Associate)
• shall provide contract performance security
equivalent to (10%) of the Second contract and
Third Contract for the due performance of the
contract

7. TERMS AND PROCEDURES
OF PAYMENT
1.TERMS OF PAYMENT
A. Submission within
the 28 days:
1.Performance
securities
2.Detailed PERT
Network/Bar chart and
its approval by
employer
3.Income tax order
B. Fulfilling the
following conditions:
Approval of all designs,
drawings
Approval of quality
plans and sub-vendor
list.
Approval of type test
reports
C. Progressive payment
Seventy percent (70%)
price of the main
equipment/materials shall
be paid progressively
irrevocable letter of credit.
Twenty percent (20%) of
the CIF price of main
equipment/materials shall
be paid on receipt and
storage at site.
supply portion

8. TERMS AND PROCEDURES
OF PAYMENT
D. Final payment
• Balance 10% of the CIF price component of
equipment shall be paid as per the
following:
• Successful completion of erection, testing
and commissioning of substation.
• Proof of submission of required number of
reproducible, O&M manuals, maintenance
and equipment.

9. TERMS AND PROCEDURES
OF PAYMENT
Training Charges
• It shall be paid on successful completion of training
and on approval of the same by the employer.
Indian Agent Commission
This payment will be made in equivalent Indian rupees
as follows:
• 85% of Indian Agent’s commission shall be paid within
60 days after the receipt of material and equipment at
destinations.
• Balance 15% shall be paid on issuance of the taking
over certificate.

10. TERMS AND PROCEDURES
OF PAYMENT
2. PAYMENT PROCEDURES
• The Employer shall make payments
promptly within (30) days of submission
of an invoice/ claim by the contractor.
• All the payment shall be released to the
contractor directly except the payment
due on shipment, which shall be paid
through irrevocable letter of credit.
Methods of payment

11. TERMS AND PROCEDURES
OF PAYMENT
2. PAYMENT PROCEDURES Cont.
• The contractor may track the status of its
bills using POWERGRID’s ‘online bill
tracking system’, contractor shall register
once online at POWERGRID’s website.
Payment tracking

12. GUARANTEES, LIQUIDATED DAMAGES FOR
NON-PERFORMANCE
• The equipment offered shall meet the rating
performance requirements stipulated in technical
specification.
• The ratings and performance figures of the bellow
mentioned equipment are guaranteed by
contractor:

13. GUARANTEES, LIQUIDATED DAMAGES FOR
NON-PERFORMANCE
• If the aforementioned guarantees are not
established at factory tests, then the employer
at his discretion may reject or accept the
equipment after assessing the liquidated
damages as per table above against the
contract and such amounts shall be deducted
from the contract price.

14. TIME SCHEDULE
• The project completion schedule shall be as follow;

15. TIME SCHEDULE
• The time of completion of facilities shall be
determined from the date of the notification
of award, from 24.20.2014
• The activities under the contractor’s program
for project completion shall be in the form of a
master network (MNW) and shall identify the
various activities like design, engineering,
supply, installation, factory testing etc.

16. INTGRITY PACT
Between
POWERGRID
And
HYOSUNG
CORPORATION
• In order to achieve the goals,
POWERGRID and above named
Bidder/Contractor enter into this
agreement called “Integrity pact” which
will form a part the bid.
• Hereinafter referred to as;
• “The Bidder/Contractor preamble”

17. INTGRITY PACT
Commitments of POWERGRID
• No employee of POWERGRID, personally or
through family members, will in connection
with the tender or the execution of the
contract.
• POWERGRID will, during the tender process
treat all Bidders with equity and provide the
same information.
• Excluding of bids its such employee who has
personal interest in the companies participating
in the Bidding/Tendering process.

18. INTGRITY PACT
Commitments of the Contractor
A. Commits himself to take
measures necessary to prevent
corruption
B. Not to directly offer promise or
give to POWERGRID
C. will not enter into any illegal
agreement
D. when presenting his bid, disclose
any and all payments he has made
bidder/
contractor

19. INTGRITY PACT
Disqualification from Tender Process and Exclusion
from Future Contracts
• If the bidder, before contract award, has
committed a serious transgression, such as to
put his reliability or creditability as bidder
into question, POWERGRID may disqualify the
bidder.
• During the restoration of the damage,
POWERGRID may revoke the exclusion
prematurely.

20. INTGRITY PACT
PACT DURATION
This pact is begins when both parties have
legally signed it. It expires for the contractor
after the closure of the contract and for all
other bidder six months after the contract
has been awarded.