Attachment ---- Site Visit Report Example

Dispute Adjudication Board

Site Visit No. 12
22 – 26 June 2008

Summary of the Visit

The DAB members arrived in Capitol City on Sunday, 22 June 2008 and checked in at the Three Stars
Hotel in Capitol City.

Day 1, Capitol City & Town

The DAB travelled from its hotel to the Site by car leaving Capitol City at 08:00 hours and arriving at the
Contractor’s offices at 10:30 hours after having visited on its own the works at the Railway Underpass.

The Contractor and the Engineer provided the DAB with copies of their respective Monthly Reports for
May 2008. The Engineer had provided the DAB in advance with an Agenda for the Site Visit and copies
of the Employer’s Notice of Dispute issued on 03 June 2008.

DAB Visit No 12; Agenda

1. Scope of maintenance activities required under Clause 3.1 of Technical Specification No.
1 (Volume 2.1).
2. Interpretation of the Method of Calculation for IPC 25.
3. Interpretation of Method of payment for IPC 25.
4. The Employer to advise DAB regarding the status of ongoing discussions with the
Contractor pursuant to the Employer Notice of Dispute issued on 03 June 2008.
5. Visit to the Site

On being advised that senior members of the Employer’s and the Contractor’s staffs planned to attend the
following day especially to discuss Agenda Items 2, 3 and 4 concerning the method of calculation of IPC
25 for interpretation of Addendum No. 2 to the Contract, the DAB took up the Agenda item No. 1.

As a general matter, the DAB was advised that good progress was being made on the works at the
Railway Underpass and that the Contractor expects to meet the 30 September 2008 date for its substantial
completion.

Agenda Item 1. Scope of maintenance activities required under Clause 3.1 of Technical
Specification No. 1 (Volume 2.1).

The matter of the Contractor’s Maintenance Obligations required under Clause 3.1 of the Technical
Specification and NR Norm 123/1880 was discussed at length during Site Visit No. 11 in March. The
DAB had recommended then that the NR Instruction No. 123/1880 be translated. The Contractor
provided the DAB and the Engineer with copies of the translation in the interim period following Site
Visit no. 11. The DAB also requested that if the Parties had any disagreements concerning what is
required by the Norm that it be advised of the details of the disagreement.

This agenda item was discussed by the day 1 participants and again on day 2 when members of the
Employer and Contractor Capitol City organisations were present. The disagreement involves the
interpretation of the Technical Specification and Norm 123/1880 regarding the scope of the work
included under the Contractor’s maintenance obligations.

The Contractor asserts that Norm 123/1880 makes a distinction between maintenance work and repair
work for damage caused by third parties, and that the Contract does not require him to repair such
damage.

© - DRB Foundation
The Engineer and the Employer consider that both categories of work are included in the Contractor’s
contractual obligations.

The DAB asked if under The Countries practice, the costs of damages were not recoverable under the
vehicle owner’s statutory insurance policies. The Employer advised that the NR maintained a service
contract with a company named “Diamond” that is charged with patrolling the roads and amongst its
duties, it is to establish the causes of accidents and to recover damages to the roads and road hardware
through claims against motorists’ third party liability insurance policies. The amounts recovered from
insurance policies are passed to those contractors who are still under a maintenance obligation, or if no
such contractor is extant, then to the Employer.

The Contractor stated that it had not had contact with Diamond. The Employer proposed to organize a
meeting with Diamond, the Parties and the Engineer in order to coordinate the procedure of obtaining
reimbursement from insurance companies.

The DAB welcomed the Employer’s proposal as the obvious way forward to resolve this matter. After a
review of the Technical Specifications and Norm 123/1880 the DAB concluded that it was the
Contractor’s obligation to carry out both maintenance and repair work described in those documents. The
Contractor is entitled to receive the full benefits of any recoveries made by Diamond from the insurers to
offset its costs for the repair of accidental damage.

The DAB expressed surprise that despite many reminders made by the Engineer the Parties and the
Engineer would permit repair works involving public safety considerations to be delayed and advised that
repair works should be carried out immediately in order to remedy all safety hazards caused by any
defective work or accidental damage.

Agenda Item 2. Interpretation of the Method of Calculation for IPC 25.

Agenda Item 3. Interpretation of Method of payment for IPC 25

The DAB then turned to Agenda Items 2 and 3 that deal with IPC 25 and the Employer’s Notice of
Dispute issued on 3 June. The DAB was furnished with additional correspondence including: (i) the
Contractor’s reply to the notice dated 11 June; (ii) the Engineer’s reply dated 14 June; and (iii) the
Employer’s letter of 17 June.

The DAB was advised that the Engineer and the Contractor are in agreement concerning IPC 25. The
IPC was issued in accordance with their common understanding of the agreements reached in the meeting
of 6 February, a matter that was dealt with exhaustively by the DAB during Site Visit no. 11. IPC 25 for
the month of December 2007 was issued on the basis that payment for the work carried out between
March 2006 and December 2007 was recalculated using the total value of the work certified for that
period, effecting a currency split of 80% Kudos and 20% Euros, then applying the Contract price
adjustment formula by use of the original indices and setting “n” for all coefficients at December 2007.
The value in the IPC is first calculated in Kudos and the amount certified is then converted to Kudos and
Euro using the contractual rate of exchange, a calculation that produced an excess in Kudos and a deficit
in Euro with respect to the payments that had previously been made in accordance with the original
contract Kudos/Euro split of 40/60. The Euro deficit was offset by Kudos using the current rate of
exchange on the date of IPC 25.

The Employer disagrees with the method of calculation and the method of payment for the Euro deficit.
The Employer maintains that the recalculation of the IPCs between March 2006 and December 2007
should be made on a month-by-month basis utilizing the month by month current “n” values for the
coefficients. Regarding the payment of the Euro deficit it should be paid by converting the Euro deficit
into Kudos utilizing the Contract rate and that amount of Kudos deducted from the total Kudos to be paid
under the revised currency split. The Contractor and the Engineer maintain their agreement and disagree
with the Employer. The Employer’s calculation and payment methods reduce the payment to the
Contractor by about €2.3 million. The Employer has been withholding payment for the change in
currency split because of this disagreement.

© - DRB Foundation
The Contractor and the Employer met in Capitol City on Thursday 19 June and it was agreed that as an
interim measure the Employer would pay the withheld amount and would do so by adding it to the
payment for IPC 48 for May 2008. However, both Parties reserved their respective positions described
above. Following the 03 June 2008 Employer letter, the disagreement is the subject of continued
settlement negotiations pursuant to Clause 67 of the Conditions of Contract.

Day Two, Town

The DAB arrived at the Contractor’s office at 09:00 hrs. After the DAB briefed the Capitol City based
attendees on the progress of the meeting held on Day 1 of the Site Visit most of the remainder of the
meeting was devoted to Agenda items 1 and 4.

At the request of the Employer the DAB made an inspection of the completed Bypass works in company
with the Resident Engineer following the close of the day’s proceedings.

Items noted as defective and or requiring completion, maintenance or repair were:-

• Damaged W-beam posts and guardrail on median and shoulders at about eight locations.
• Minor damage to W-beam guardrail on the median at about four locations but also requiring
replacement of missing or damaged anti-glare fins.
• On both carriageways to East of Town Interchange median barriers which have defective
support posts require immediate repair and re-erection.
• Supply and erection of overhead gantry and signs remain to be erected on recently constructed
foundations to East of Town Interchange. This work is urgent to clarify the exit ramp to
Craiova.
• Repairs are urgently needed to severely damaged W-beam guardrail at the Town Interchange
entry ramp to the Bypass for traffic coming on the A701 from Town.
• Defective median kerbs were observed on the some bridges particularly at the Railway
Overpass. A solution is needed for this.
• There is a requirement for the full length of both the carriageways to be cleaned of loose sand,
and rubbish at least every two weeks. This is particularly needed at the West end of the project.
If the bridge decks are not cleaned regularly damage may occur to the expansion joints.
• It is understood that reflective marker drums are to be erected to define ramp gore areas at all
off ramps. These should be installed urgently because accident damage is evident at such
locations.

At 18:00 hours the DAB concluded its private working session in order to prepare its draft of this Site
Visit Report. A draft of the report was sent to the Parties and the Engineer in the afternoon and shortly
after 18:00 hours.

Day Three, Town to Capitol City

The DAB departed for Capitol City at 08:00 hrs for a meeting with the Employer, the Contractor and the
Engineer scheduled for 11:00 hours at the Employer’s premises. The DAB reviewed its draft of the Site
Visit report with the Parties and the Engineer.

The DAB was pleased to note that the Parties have agreed to make interim payment of the disputed part
of the sum arising from Addendum no. 5. The progress achieved in reaching an agreement in February
should not be sacrificed by the Parties reverting to their original positions if there is any compromise
possible on the calculation and payment of the adjustment in currency ratio.

The DAB again urged the Parties to make earnest and urgent efforts to resolve the disagreements over the
status of the remaining claims, and if possible to avoid reference of the disputes on those matters to the
DAB, as the processing of such disputes will require significant time and expense during a period that is
practically certain to extend beyond the 30 September 2008 completion date.

© - DRB Foundation
If the Parties are not successful in settling their disputes by the date of substantial completion, then the
DAB asks that its monthly retainer fee be unchanged until such settlement has been achieved.

The DAB advised the parties and the Engineer of its proposal that for reasons of economy any further Site
visits should be arranged only if DAB assistance is needed to assist in settlement efforts.

Agenda Item 5. Visit to the Site

The DAB toured the Site alone between Km 2+000 and 13+500 observing maintenance works underway.
It stopped briefly at the Railway Underpass to view diaphragm walling activity.

The meeting ended at 18:00 hours and the DAB then moved to the Contractor’s Capitol City Offices to
put this Site Visit Report in its final form and to arrange for its distribution.

The DAB wishes to thank the Engineer and the Contractor for the kindnesses and assistance extended to
the DAB during this Site Visit.
   

© - DRB Foundation
Day Four, Capitol City
The DAB members departed from Capitol City by air on Thursday 26 June.

Attendance

The Site Visit meetings held in the Employer’s Capitol City Office and the Contractor’s Town offices
were attended as follows:-

Day 1 Day 2 Day 3

The Employer,
Mr. Peter John Project General. Director - - ✓(*)
Mr. Livid Red Project Director - ✓ ✓
Mr. Michael Stephen Project Manager. - ✓ ✓
Mr. Danny Peter Project Officer ✓ ✓

Mr. John Frank Contract Management Expert ✓ ✓ ✓

The Contractor, Aridis Joint Venture

Mr. Sherman John Project Manager ✓ ✓ -
Mr. Carl Geoff Senior Quantity Surveyor ✓ ✓ ✓
Mr. Dorn Pitt Marketing Director - ✓ ✓

The Engineer; Sound Corporation

Mr. Dan Sherry Resident Project Manager ✓ ✓ ✓
Mr. Richard Dick Quantity Surveying Expert ✓ ✓ ✓
Mr. William James Dep Resident Project Manager ✓ ✓ ✓

(*) indicates part time attendance

Martin First Anthony Second Ronald Third

Member Chairman Member

25 June 2008

© - DRB Foundation