EXHIBIT 10(D)
NETWORK SERVICES ALLIANCE AGREEMENT
between
TXU NETWORKS PTY LTD
(ACN 075 826 881)
and
WESTAR PTY LTD
(ACN 086 015 036)
and
EASTERN ENERGY LIMITED
(ACN 064 651 118)
and
AKAMON PTY LTD
(ACN 075 194 857)
and
TENIX PTY LTD
(ACN 000 305 304)
BAKER & MC.KENZIE
Solicitors
Level 39, Rialto Level 26, AMP Centre
525 Collins Street 50 Bridge Street
MELBOURNE VIC 3000 SYDNEY NSW 2000
Tel: (03) 9617-4200 Tel: (02) 9225-0200
Fax: (03) 9614-2103 Fax: (02) 9223-7711
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CONTENTS
CLAUSE
NUMBER HEADING PAGE
1. DEFINITIONS AND INTERPRETATION 2
1.1 Definitions 2
1.2 Interpretation 17
2. TERM 18
2.1 Commencement 18
2.2 Termination 19
2.3 Early termination 19
3. APPOINTMENT OF ALLIANCE SERVICE PROVIDER 19
3.1 Acknowledgment of appointment of TXUN 19
3.2 Alliance Service Provider is appointed 20
3.3 Non-exclusive arrangement 20
3.4 Legal relationship between TXUN and the Alliance Service Provider 20
3.5 Representation 20
4. SERVICES 21
4.1 Term of the Services 21
4.2 Scope of the Operations and Maintenance Works Services and
Replacement Capital Works Services 21
4.3 Scope of the TXUN Initiated Capital Works Services 21
4.4 Scope of the Customer Initiated Capital Works Services 22
4.5 Provision of the Services 24
5. ALLIANCE SERVICE PROVIDER'S OBLIGATIONS 27
5.1 Staff and equipment 27
5.2 Comply with TXUN's policies 27
5.3 Defective work 27
6. TXUN'S OBLIGATIONS 28
6.1 General obligations 28
6.2 Powers to do works 28
7. COOPERATION AND RESPONSE TO PROPOSALS 29
8. ALLIANCE SERVICE PROVIDER'S CONTRACTS 29
8.1 Subcontractors and agents of Alliance Service Provider 29
8.2 Form of the Alliance Service Provider's contracts 30
9. EMPLOYEES 30
10. MATERIAL CONTRACTS 31
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11. ADMINISTRATION OF THE SERVICES 31
11.1 Formation of the Alliance Board 31
11.2 Ongoing operation of the Alliance Board 31
11.3 Responsibilities of the Alliance Board 32
11.4 Formation of the Operating Management Team 32
11.5 Ongoing operation of the Operating Management Team 33
11.6 Responsibilities of the Operating Management Team 33
12. ALTERATION OF THE SERVICES 33
12.1 TXUN may notify an alteration of the Services 33
12.2 Alteration claim by Alliance Service Provider 34
12.3 Response to alteration claim by TXUN 34
12.4 How Target Costs are adjusted 36
13. INSURANCE 36
13.1 Insurances to be maintained by the Alliance Service Provider 36
13.2 Claims under Insurance Policies 37
13.3 Insurance Proceeds 37
13.4 Comply with insurances 38
14. TARGET COST 38
14.1 Establishing the Target Costs 38
14.2 Target Cost adjustment for Mistake 41
14.3 Target Cost adjustment for introduction of GST 41
14.4 Target Cost Adjustment for TXUN Initiated Capital Works Services
and Customer Initiated Capital Works Services 41
14.5 Target Cost adjustment for Material Unforeseen Circumstances 43
14.6 Benchmarking the contractor 43
15. ALLIANCE SERVICE PROVIDER'S REMUNERATION 44
15.1 Components of Alliance Service Provider's remuneration 44
15.2 Alliance Service Provider's Reimbursable Costs 44
15.3 Management fee 45
15.4 Non-Financial Incentive Fee 45
15.5 Share of Savings Payment 46
15.6 Transition Costs 46
15.7 Gainsharing 46
15.8 Seconded Employees/Costs of Redundancies 47
16. BILLING AND INVOICING 49
16.1 Management Fee 49
16.2 Reimbursable costs 49
16.3 Share of Savings Payment 49
16.4 Non-Financial Incentive Fee 50
16.5 Form of invoices 51
16.6 Adjustments and corrections to invoices 51
17. AUDITS AND ACCESS TO RECORDS 52
17.1 Accounting audit 52
17.2 Operational audits 53
17.3 Access to records 53
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18. FORCE MAJEURE 55
18.1 Consequences of Force Majeure 55
18.2 Notification and diligence 55
18.3 Liability not relieved 56
18.4 Prolonged Force Majeure 56
19. EMERGENCIES 57
19.1 Cooperation with Government Agencies 57
19.2 TXUN may take control 57
19.3 Emergency Management Plan 58
20. SAFETY 58
20.1 Alliance Service Provider responsible for safety 58
20.2 Occupational Health and Safety Act 1985 58
20.3 Fire bans 59
20.4 Directions regarding safety 59
20.5 Protective clothing 59
20.6 Incident reporting and investigation 60
20.7 Safety audits and assessments 60
21. TERMINATION 61
21.1 Termination by TXUN for cause 61
21.2 Termination by the Alliance Service Provider for failure to pay 63
21.3 Termination for prolonged Force Majeure 63
21.4 Termination process 63
21.5 TXUN may take control 63
22. CONSEQUENCES OF TERMINATION 65
22.1 Actions upon Termination 65
22.2 Non-solicitation of employees 67
22.3 Transitional assistance 67
22.4 Survival of rights on termination 68
23. SUSPENSION 68
23.1 Suspension for cause 68
23.2 Suspension for convenience 69
23.3 Resumption of performance of the Services 70
24. WARRANTY OF MATERIALS 70
25. REPRESENTATIONS AND WARRANTIES 71
25.1 Parties' representations and warranties 71
25.2 Year 2000 warranty 71
25.3 Business Ethic 72
26. LIMITATION ON LIABILITY 73
27. INDEMNITIES AND RELEASES 73
27.1 Alliance Service Provider's general indemnity 73
27.2 Third party claims 74
28. CONFIDENTIALITY 74
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28.1 Disclosure with consent 74
28.2 Disclosure on conditions 74
28.3 Advance notice of disclosure 75
28.4 Confidentiality undertaking 75
28.5 Continuing obligation 75
29. OWNERSHIP OF ASSETS AND INTELLECTUAL PROPERTY 75
29.1 Electricity Distribution Network and Gas Distribution System assets 75
29.2 Other assets provided by TXUN 76
29.3 Intellectual property developed during Agreement 77
29.4 Use of intellectual property 77
30. USE OF TXU COMPANIES' MARKS 78
31. ENVIRONMENT 78
31.1 Environmental requirements 78
31.2 Discovery of hazardous substance 79
31.3 Environmental audit 79
32. PUBLICITY 79
33. TAXES 80
33.1 Alliance Service Provider to comply with Tax Laws 80
33.2 GST 80
34. INTEREST 80
35. REPRESENTATIVE 81
35.1 TXUN's Representative 81
35.2 Alliance Service Provider's Representative 81
35.3 Change of Representative 81
35.4 Reliance on Representative 81
36. NOTICES 82
36.1 Requirements 82
36.2 Receipt 82
37. GUARANTEE OF ALLIANCE SERVICE PROVIDER'S OBLIGATIONS 83
37.1 Guarantor acknowledges receiving consideration 83
37.2 Guarantee 83
37.3 Indemnity 83
37.4 No requirement to commence proceedings 83
37.5 Continuing security 84
37.6 Rights unaffected 84
37.7 Restrictions on Guarantor 84
37.8 Void payments 85
37.9 Assignment of rights 85
37.10 TXUN's expenses 85
37.11 Payment in gross 85
37.12 No representations by a TXU Company 85
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38. GENERAL PROVISIONS 86
38.1 Entire Agreement 86
38.2 Costs 86
38.3 Assignment 86
38.4 Indemnities 87
38.5 Invalid or unenforceable provisions 87
38.6 Waiver and exercise of rights 87
38.7 Amendment 88
38.8 Rights cumulative 88
38.9 Consents and approvals 88
38.10 Governing law 88
38.11 Jurisdiction 88
38.12 Survival of certain provisions 88
39. DISPUTE RESOLUTION 88
39.1 Parties not to take legal action 88
39.2 Negotiation of Dispute 89
39.3 Independent Expert 90
SCHEDULE 1 MAP OF THE ELECTRICITY DISTRIBUTION NETWORK
SCHEDULE 2 DESCRIPTION OF THE ELECTRICITY DISTRIBUTION NETWORK
SCHEDULE 3 MAP OF THE GAS DISTRIBUTION SYSTEM
SCHEDULE 4 DESCRIPTION OF THE GAS DISTRIBUTION SYSTEM
SCHEDULE 5 ELECTRICITY DISTRIBUTION NETWORK OPERATIONS AND MAINTENANCE
SERVICES
SCHEDULE 6 GAS DISTRIBUTION SYSTEM OPERATIONS AND MAINTENANCE SERVICES
SCHEDULE 7 ELECTRICITY DISTRIBUTION NETWORK REPLACEMENT CAPITAL WORKS
SERVICES
SCHEDULE 8 GAS DISTRIBUTION SYSTEM REPLACEMENT CAPITAL WORKS SERVICES
SCHEDULE 9 ELECTRICITY DISTRIBUTION NETWORK TXUN INITIATED CAPITAL WORKS
SERVICES
SCHEDULE 10 GAS DISTRIBUTION SYSTEM TXUN INITIATED CAPITAL WORKS SERVICES
SCHEDULE 11 ELECTRICITY DISTRIBUTION NETWORK CUSTOMER INITIATED CAPITAL
WORKS SERVICES
SCHEDULE 12 GAS DISTRIBUTION SYSTEM CUSTOMER INITIATED CAPITAL WORKS SERVICES
SCHEDULE 13 BUSINESS PROCESSES
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SCHEDULE 14 INFORMATION SYSTEMS MANAGEMENT SERVICES
SCHEDULE 15 ADJUSTMENT MECHANISM FOR ALTERATION IN THE SERVICES
SCHEDULE 16 NON-FINANCIAL INCENTIVE FEE
SCHEDULE 17 NON-FINANCIAL KPI MEASURES
SCHEDULE 18 KPI TARGETS
SCHEDULE 19 PERFORMANCE INCENTIVE FEE CALCULATION EXAMPLES
SCHEDULE 20 TECHNICAL STANDARDS
SCHEDULE 21 OPERATION AND PERFORMANCE MANUALS
SCHEDULE 22 REIMBURSABLE COSTS
SCHEDULE 23 ETHICS AND NON-DISCLOSURE CERTIFICATION
SCHEDULE 24 SHARE OF SAVINGS PAYMENT
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NETWORK SERVICES ALLIANCE AGREEMENT
THIS AGREEMENT is made on the day of , 1999.
BETWEEN
TXU Networks Pty Ltd (ACN 075 826 881) of Level 17, 452 Flinders Street,
Melbourne, Victoria 3000 ("TXUN")
AND
Westar Pty Ltd (ACN 086 015 036) of Level 49, 525 Collins Street, Melbourne,
Victoria 3000 ("WESTAR")
AND
Eastern Energy Limited (ACN 064 651 118) of Level 17, 452 Flinders Street,
Melbourne, Victoria 3000 ("EASTERN")
AND
Akamon Pty Ltd (ACN 075194 857) of Level 12, 100 Arthur Street, North Sydney,
New South Wales, 2060 ("ALLIANCE SERVICE PROVIDER");
AND
Tenix Pty Ltd (ACN 000 305 304) of Level 12, 100 Arthur Street, North Sydney,
New South Wales, 2060 ("GUARANTOR").
RECITALS
A. Westar, Eastern and TXUN (each a "TXU Company" and collectively the
"TXU Companies") are all subsidiaries, directly or indirectly, of TXU
Australia Pty Ltd.
B. Westar is the owner of the Gas Distribution System.
C. Eastern is the owner of the Electricity Distribution Network.
D. TXUN has been appointed by Westar and Eastern to administer the Gas
Distribution System and the Electricity Distribution Network and to
procure third parties to provide the Services in connection with the
operation and maintenance of the Gas Distribution System and the
Electricity Distribution Network.
E. Westar, Eastern, TXUN and the Alliance Service Provider have agreed to
establish an alliance based contract for the operation and maintenance
of the Gas Distribution System and the Electricity Distribution
Network characterised by the following outcomes which the parties will
assist each other to achieve:
(i) the parties will work collaboratively, in a totally
transparent, open-book environment;
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(ii) a cultural alignment based on principles of honesty,
fairness, integrity and trust;
(iii) a united business strategy, with a flexible, long-term
perspective able to adapt to changing conditions;
(iv) a mutually supportive, non-adversarial relationship focused
on superior business ethics;
(v) the achievement of the Business Objectives;
(vi) the focus of resources on continuous, mutual improvement;
(vii) the achievement of cost, productivity and product
improvements resulting in increased levels of performance,
reliability and customer satisfaction;
(viii) the identification of innovative practices in the
performance of the Services;
(ix) the development of competitive advantage by both parties;
and
(x) remuneration of the Alliance Service Provider commensurate
with the quality of service it provides.
F. The Guarantor will guarantee the obligations of the Alliance Service
Provider under this Agreement.
G. A summary of the commercial arrangements of this Agreement is
contained in schedule 25.
OPERATIVE PROVISIONS
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1. DEFINITIONS AND INTERPRETATION
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1.1 DEFINITIONS
In this Agreement, unless the context requires another meaning:
"ACCOUNTS" means, in respect of the Alliance Service Provider:
(a) a profit and loss statement;
(b) a balance sheet and statement of cash flows; and
(c) all statements, reports and notes attached to or intended to be read
with the profit and loss statement, balance sheet or statement of cash
flows,
relating to its performance of the Services under this Agreement;
"ACCOUNTING STANDARDS" means:
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(a) the accounting standards applicable for the purposes of the
Corporations Law;
(b) the requirements of the Corporations Law for the preparation and
content of financial statements, director's reports and auditors
reports; and
(c) generally accepted and consistently applied accounting principles and
practices in Australia, except those inconsistent with the standards
or requirements referred to in paragraphs (a) or (b);
"ALLIANCE BOARD" means the board established under clause 11.1;
"ANTICIPATED EXPENDITURE" means, in relation to the TXUN Initiated Capital Works
and Customer Initiated Capital Works:
(a) in Calendar Year 2000, the amount set out in respect of those works in
schedule 22; and
(b) in a Calendar Year after Calendar Year 2000, an amount calculated in
accordance with the following formula:
AEt = AEt-1 x CPIt
where
AEt is the Anticipated Expenditure for Calendar Year "t";
AEt-1 is the Anticipated Expenditure for Calendar Year "t-1"; and
CPIt is the CPI for Calendar Year "t";
"AUTHORISATION" means:
(a) any authorisation, approval, licence, permit, consent, qualification,
accreditation, filing, registration, certificate, resolution,
direction, declaration or exemption and any renewal and variation of
them by or with a Government Agency; and
(b) for anything which a Government Agency may prohibit or restrict within
a specified period, the expiry of that period without intervention or
other action by that Government Agency;
"BENCHMARK" means determining the Benchmarked Cost;
"BENCHMARKED COST" means, in relation to:
(a) an amount or class of expenditure which is incurred, to be incurred,
or which may be incurred by the Alliance Service Provider or a
Subcontractor; or
(b) the basis for costing any class of expenditure which is incurred, to
be incurred, or which may be incurred by the Alliance Service Provider
or Subcontractor,
the amount that would be charged, or the basis that would be set, by a person of
comparable experience and qualifications at arm's length performing equivalent
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work on a normal commercial basis to the same specifications and standards
required pursuant to this Agreement;
"BUSHFIRE MITIGATION INDEX" means the index calculated in accordance with clause
(c)(3) of schedule 17;
"BUSHFIRE SEASON" means the fire danger period in respect of the areas in which
any part of the Electricity Distribution Network is located, as declared by the
chairman of the Country Fire Authority under the Country Fire Authority Act
1958;
"BUSINESS" has the same meaning as in the Business Sale Agreement;
"BUSINESS DAY" means a day that is not a Saturday, Sunday or a public holiday or
bank holiday in Melbourne;
"BUSINESS OBJECTIVES" means:
(a) subject to the parties obligations under sub-clause (d) of this
definition, maintaining the reliability of the Electricity
Distribution Network and the Gas Distribution System;
(b) minimising operation and maintenance costs on the Electricity
Distribution Network and the Gas Distribution System;
(c) minimising Electricity Distribution Network and Gas Distribution
System construction costs whilst building new assets to the required
quality standards;
(d) demonstrating good corporate citizenship by working safely; caring for
the environment; complying with the Law and Regulatory Instruments,
maintaining a good emergency response capability and satisfying all
reasonable requirements of Customers, the Office of the
Regulator-General, the Ombudsman and the community;
(e) the maintenance of a long-term relationship between the parties
through innovation, continuous improvement and sustainable
productivity gains;
(f) the reduction of costs through measured, performance-based objectives
based on clearly defined goals; and
(g) the receipt by the Alliance Service Provider of remuneration
commensurate with the quality of services provided by the Alliance
Service Provider;
"BUSINESS SALE AGREEMENT" means the agreement of that name dated on or about the
date of this Agreement, between Enetech Pty Ltd, Australian Tree Management Pty
Ltd, Eastern, TXUN, Westar, the Alliance Service Provider and Tenix Pty Ltd;
"CALENDAR YEAR" means a period of 12 calendar months ending on 31 December;
"CLAIM" means any claim, cost, damages, debt, expense, Tax, liability, loss,
allegation, suit, action, demand, cause of action or proceeding of any kind made
under or in connection with this Agreement irrespective of:
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(a) how or when it arises;
(b) whether it is actual or contingent;
(c) whether or not it is in respect of legal or other costs, damages,
expenses, fees or losses;
(d) whether or not it is in respect of a breach of trust or of a fiduciary
or other duty or obligation; and
(e) whether or not it arises at law or in any other way;
"COMMENCEMENT DATE" means the "Handover Date" under the Business Sale Agreement;
"CONFIDENTIAL INFORMATION" means all:
(a) know-how, trade secrets, ideas, concepts, technical and operational
information owned or used by the parties, including the Manuals;
(b) information concerning the affairs or property of the parties or their
Related Bodies Corporate, or any business, property or transaction in
which the parties may be or may have been concerned or interested;
(c) details of any customers or suppliers of the parties;
(d) information about the terms of this Agreement; and
(e) information which, by its nature or by the circumstances of its
disclosure, is or could reasonably be expected to be regarded as
confidential to:
(i) a party; or
(ii) any third party with whose consent or approval a party uses
that information;
"CONTROLLER" has the meaning given to "controller" in section 9 of the
Corporations Law;
"CORPORATE OVERHEAD COSTS" means costs of performing the Services and the
Alliance Service Provider's other obligations under this Agreement (excluding
funding costs), that are not Direct Field Costs or Support Costs;
"CPI" means, in respect of a Calendar Year, the All Groups Consumer Price Index
for Melbourne published by the Australian Bureau of Statistics for the September
quarter before the start of that year, divided by the All Groups Consumer Price
Index for Melbourne published by the Australian Bureau of Statistics for the
September quarter of the immediately preceding year;
"CUSTOMER INITIATED CAPITAL WORKS SERVICES" means:
(a) in relation to the Electricity Distribution Network, the services set
out in schedule 11; and
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(b) in relation to the Gas Distribution System, the services set out in
schedule 12;
"DIRECT FIELD COSTS" means costs incurred directly by the Alliance Service
Provider in providing the Services of the kind that are included within the
category of direct field expenditures as set out in the Reimbursable Costs model
in schedule 22, including the cost of subcontract resources directly applied to
the provision of the Services, and includes the cost of Strategic Spares when
they are acquired and placed in storage for future potential use in the Gas
Distribution System or Electricity Distribution Network, but does not include:
(a) any labour costs in relation to entitlements of the Seconded
Employees, whether relating to any contract of employment, long
service leave, workers compensation, superannuation, annual holidays
or industrial instrument of the Seconded Employees, but not other
remuneration of the Seconded Employees; or
(b) the cost of Redundancy of any Employees (including Seconded
Employees), except as referred to in clause 15.8(f)(i);
"DISPUTE" means any dispute or difference arising from or relating to this
Agreement and the performance or non-performance of a party's obligations under
this Agreement;
"DISPUTE RESOLUTION PROCEDURE" means the procedure for the resolution of
disputes arising under this Agreement set out in clause 39;
"DISTRIBUTION ASSET" means any materials, apparatus, equipment, plant and
buildings and other associated equipment and assets from time to time forming
part of the Gas Distribution System or the Electricity Distribution Network;
"DOLLAR " and "$" means the lawful currency of Australia;
"ELECTRICITY DISTRIBUTION NETWORK" means the network and related facilities for
the distribution of electricity owned by Eastern in the geographic area set out
in Schedule 1, as specifically described in Schedule 2;
"ELECTRICITY MATERIAL CHANGE" means a alteration of the Services involving a
decrease in the scope of the Services as they relate to the Electricity
Distribution Network sought by TXUN in accordance with clause 12.1, the value of
which, when aggregated with all the other alterations relating to the scope of
the Services as they relate to the Electricity Distribution Network which have
been effected under clause 12 in the previous 12 months, is an amount equal to
or greater than 7.5% of the Target Costs for that Calendar Year as they relate
to the Electricity Distribution Network (and the Anticipated Expenditure on TXUN
Initiated Capital Works and Customer Initiated Capital Works for that Calendar
Year as they relate to the Electricity Distribution Network, which will form
part of the Target Costs when they are performed pursuant to clause 14.4).
"EMERGENCY" means:
(a) a proclamation that Part 6A of the Gas Industry Act 1994 (Vic)
applies;
(b) a proclamation that Part 3A of the Electricity Industry Act 1993 (Vic)
applies;
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(c) an event which falls within the events listed in clause 6.7.2 of the
MSO Rules; or
(d) any explosion, fire, storm or collision which:
(i) threatens or might threaten life or property; or
(ii) renders any system or asset involved in the storage,
production, transmission or distribution of gas or
electricity through Victoria incapable of continuous
operation,
and results in:
(iii) the owner of that system or asset requesting; or
(iv) a Government Agency or any person acting on the direction of
a Government Agency directing,
TXUN or the Alliance Service Provider to provide emergency assistance,
and which reasonably necessitates immediate action by the Alliance
Service Provider such that prior consultation with TXUN is not
reasonably practicable with a view to promptly, efficiently and
successfully dealing with the emergency.
"EMERGENCY MANAGEMENT PLAN" means the plan adopted by the Alliance Service
Provider pursuant to clause 19.3;
"EMPLOYEE" has the same meaning as in the Business Sale Agreement;
"ENVIRONMENTAL LAW" means any Law about the environment, planning, building or
local government and includes any law about:
(a) land use or occupation of land or buildings;
(b) occupational health and safety;
(c) heritage preservation, protection or conservation of natural or
cultural resources;
(d) pollution or contamination of air, water or soil;
(e) waste disposal, treatment or storage;
(f) chemical, toxic, hazardous, poisonous or dangerous substances; or
(g) noise or odour;
"EXPANSION" means the process of upgrading the Electricity Distribution Network
or Gas Distribution System by replacing or enhancing existing plant or
equipment;
"EXTENSION" means the process of extending or adding to the Electricity
Distribution Network or Gas Distribution System by adding new plant or
equipment;
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"FORCE MAJEURE" means any event or circumstance not within the control of a
party which renders that party incapable of performing a material part of its
obligations under this Agreement and which:
(a) is not caused by that party's:
(i) default under this Agreement; or
(ii) breach of the Law or a Regulatory Instrument; and
(b) comprises one of the following events which, by the exercise of due
diligence, that party is not reasonably able to prevent or overcome:
(i) acts of God, including earthquakes, floods, washouts,
landslides, lightning, storms, and the elements, which
result in the Minister responsible for the Electricity
Industry Act 1993 exercising his or her powers under Part 3A
of that Act, or the Minister responsible for the Gas
Industry Act 1994 exercising his or her powers under Part 6A
of that Act;
(ii) Emergencies;
(iii) strikes, lockouts, bans, slowdowns or other industrial
disturbances, which affect:
(A) the whole or a substantial part of an industry; or
(B) the whole or a substantial part an industry in a
region in which the Alliance Service Provider is
performing the Services,
and which are not directed at or attributable to the
Alliance Service Provider;
(iv) strikes, lockouts, bans, slowdowns and other industrial
disturbances directed at or attributable to the Alliance
Service Provider as a result of:
(A) a policy or practice of the Alliance Service
Provider which has been agreed by the Alliance
Board; or
(B) the Alliance Service Provider's reasonable pursuit
of the Business Objectives;
(v) acts of enemy, wars, blockades or insurrections
disturbances, arrest and restraint of rulers and peoples;
(vi) vandalism or sabotage; or
(vii) epidemic or quarantine,
but excluding, in any circumstances:
(c) lack of finances, lack of funds, or inability to borrow funds; or
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(d) acts or omissions of Subcontractors or suppliers of a party except to
the extent that the Subcontractor or supplier is itself affected by an
event of Force Majeure (as defined in this Agreement).
"GAS DISTRIBUTION SYSTEM" means the system of distribution pipelines and related
facilities for the transportation of natural gas owned by Westar in the
geographic area set out in Schedule 3, as specifically described in Schedule 4;
"GAS MATERIAL CHANGE" means an alteration of the Services involving a decrease
in the scope of the Services as they relate to the Gas Distribution System
sought by TXUN in accordance with clause 12.1, the value of which, when
aggregated with all the other alterations relating to the scope of the Services
as they relate to the Gas Distribution System which have been effected under
clause 12 in the previous 12 months, is an amount equal to or greater than 6% of
the Target Costs for that Calendar Year as they relate to the Gas Distribution
System (and the Anticipated Expenditure on TXUN Initiated Capital Works and
Customer Initiated Capital Works for that Calendar Year as they relate to the
Gas Distribution System, which will form part of the Target Costs when they are
performed pursuant to clause 14.4).
"GOOD PRACTICE" means, in relation to performance of the Services, performance
of the Services which is:
(a) in accordance with all Law, Regulatory Instruments and Authorisations,
including Environmental Laws and Environmental Licences;
(b) in accordance with the Regulatory Instruments;
(c) in accordance with any applicable final determination of the Office of
the Regulator-General;
(d) in accordance with standards of safety not less than the safety
standards adopted by responsible and reputable Australian electricity
distribution network and gas distribution system operators;
(e) in accordance with the technical standards and policies specified in
Schedule 20 and Schedule 21 or otherwise generally accepted from time
to time by engineers experienced in the operation of electricity
distribution networks and gas distribution systems as being at least
the minimum standards generally acceptable for those networks and
systems;
(f) consistent with the practices of a commercial, efficient and prudent
operator;
(g) in accordance with the terms of any contract (of which the Alliance
Service Provider has a complete copy, as varied from time to time)
between TXUN and the Alliance Service Provider; and
(h) in accordance with the terms of the Insurance Policies in clause 13;
"GOVERNMENT AGENCY" means:
(a) a government, whether federal, state, territorial or local;
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(b) a department, office or minister of a government acting in that
capacity; or
(c) a commission, delegate, instrumentality, agency, board, or other
government, semi-government, judicial, administrative, monetary or
fiscal authority, whether statutory or not;
"GST" has the same meaning as in section 195-1 of the A New Tax System (Goods
and Services Tax) Act 1999 (Cth);
"GUARANTEE" means a guarantee, indemnity, letter of credit, letter of comfort or
other assurance or assumption of responsibility, however it is described, given
at any time for a debt or liability of another person or the solvency or
financial condition of that person;
"INDEPENDENT EXPERT" means a person appointed to settle a Dispute under clause
39.3;
"INSOLVENCY EVENT" means the happening of one or more of the following events in
respect of a party:
(a) except for the purpose of a solvent reconstruction or amalgamation
which has the prior written consent of the other party:
(i) an order is made that it be wound up or that a Controller be
appointed to it or any of its assets; or
(ii) a resolution that it be wound up is passed;
(b) a liquidator, provisional liquidator, Controller or any similar
official is appointed to, or takes possession or control of, all or
any of its assets or undertaking;
(c) an administrator is appointed to it;
(d) it enters into, or resolves to enter into, an arrangement, compromise
or composition with any of, or any class of, its creditors or
shareholders, or an assignment for the benefit of any of, or any class
of, its creditors, or process is filed in a court seeking approval of
any such arrangement, compromise or composition;
(e) a reorganisation, moratorium, deed of company arrangement or other
administration involving one or more of its creditors is proposed or
effected;
(f) any action is taken by the Australian Securities and Investments
Commission with a view to cancelling its registration or to dissolving
it;
(g) it is insolvent within the meaning of Section 95A of the Corporations
Law, as disclosed in its Accounts or otherwise, states that it is
unable to pay its debts or it is presumed to be insolvent under any
applicable law;
(h) as a result of the operation of section 459F(1) of the Corporations
Law, it is taken to have failed to comply with a statutory demand;
(i) it stops or suspends or threatens to stop or suspend:
(i) the payment of all or a class of its debts; or
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(ii) the conduct of all or a substantial part of its business or
threatens to do so; or
(j) anything having a substantially similar effect to any of the events
specified in the preceding paragraphs happens to it under the law of
any jurisdiction.
"INSURANCE POLICY" means an insurance policy set out in clause 13.1(a);
"INTEREST RATE" means, in relation to a Quarter, the rate of interest per annum
that is the aggregate of:
(a) the rate of interest quoted to the Alliance Service Provider by the
ANZ Bank as its 90 day benchmark lending rate on the first Business
Day of that Quarter; and
(b) a margin of 1%;
"KPI" means a key performance indicator specified in schedule 17 or schedule 18
as the context requires;
"LAW" means:
(a) any statute, regulation, ordinance or proclamation, council regulation
or by-law;
(b) any order, official policy, directive, request, requirement or
guideline of any Government Agency, present or future, whether or not
having the force of law; or
(c) duties and obligations arising under common law to third parties;
"MANAGEMENT FEE" means the fee set out in clause 15.3;
"MANUALS" means TXUN's operation and performance manuals attached to this
Agreement as Schedule 21;
"MAP" means any map or other record showing the location of the apparatus,
equipment, plant and buildings comprising any part of the Electricity
Distribution Network or the Gas Distribution System;
"MATERIAL CONTRACT" means the contracts listed under the headings "Subcontracts
- Gas" and "Subcontracts - Electricity" in schedule 2 of the Business Sale
Agreement;
"MATERIAL UNFORESEEN CIRCUMSTANCE" means an unforeseen alteration in the
circumstances in which the Alliance Service Provider performs the Services
during a Calendar Year from that which was anticipated in establishing the
Target Costs:
(a) including a change in Law or a change in prices of materials required
to perform the Services; and
(b) excluding savings in the cost of the provision of the Services
attributable to efficiencies or productivity gains introduced by the
Alliance Service Provider,
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the effect of which would be, in the absence of any adjustment to the Target
Costs for that Calendar Year, to increase or reduce the remuneration of the
Alliance Service Provider under this Agreement by an amount equal to 2.5% of the
budgeted cost for Operations and Maintenance Works Services and Replacement
Capital Works Services in the Target Cost for that Calendar Year;
"MOCS" means the Melbourne One Call System;
"MINIMUM SERVICE STANDARDS" means, in respect of a Service, the following
standards as varied by agreement between the parties:
(a) the provision of the Service in a way that ensures the performance of
the relevant Service:
(i) complies with; and
(ii) does not cause or materially contribute to a material breach
of,
Good Practice; and
(b) the performance of the Service in accordance with the technical
standards and policies specified in Schedule 20 and Schedule 21.
"MISTAKE" means an error in an underlying assumption on which the Target Cost is
based;
"MSO RULES" means the Victorian Gas Industry Market and System Operations Rules,
published in the Victorian Government Gazette on 4 February 1999, as amended;
"NON-FINANCIAL INCENTIVE FEE" means the fee referred to in clause 15.1(c);
"OGS" means the Office of Gas Safety, Victoria, established under the Gas Safety
Act 1997 (Vic);
"OCEI" means the Office of the Chief Electrical Inspector, Victoria, established
under the Electricity Safety Act 1998 (Vic);
"ORG" means the Office of the Regulator-General, Victoria, established under the
Office of the Regulator-General Act 1994 (Vic);
"OMBUDSMAN" means the Victorian Energy Industry Ombudsman;
"OPERATING MANAGEMENT TEAM" means the Operating Management Team appointed by the
parties under clause 11.4(a);
"OPERATIONS AND MAINTENANCE WORKS SERVICES" means:
(a) in relation to the Electricity Distribution Network, the services set
out in schedule 5, but also the management of Stock relevant to the
Electricity Distribution Network, in accordance with the relevant
provisions of the Business Sale Agreement; and
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(b) in relation to the Gas Distribution System, the services set out in
schedule 6, but also including the management of Stock relevant to the
Gas Distribution System, in accordance with clause 18 of the Business
Sale Agreement;
"PREVAILING MARKET RATES" means the rates agreed between the parties as
representing:
(a) the prices or rates for the performance of equivalent or similar
Services which were performed by appropriately experienced and
qualified contractors engaged by a TXU Company prior to the date of
this Agreement;
(b) prices or rates for the performance of similar works paid by the
owners of any other gas distribution system or electricity
distribution network (as appropriate) in Victoria; or
(c) prices or rates provided by contractors in the position of the
Alliance Service Provider, performing services similar to the
Services;
"PROJECT MANAGER" means the project manager appointed by each party under clause
11.4(c);
"QUARTER" means a three month period starting on 1 January, 1 April, 1 July or 1
October or, in respect of the first quarter of this Agreement is the period from
the Commencement Date to 31 March 2000;
"REDUNDANCY ENTITLEMENT " means any redundancy or severance payment payable to
an employee arising from the termination of the employment of that employee in
the event of a redundancy;
"REGULATORY INSTRUMENTS" means any of:
(a) the Trade Practices Act 1974 (Commonwealth);
(b) the Gas Pipelines Access (Victoria) Act 1998 (Vic), including the Gas
Pipelines Law and National Third Party Access Code for Natural Gas
Pipeline Systems attached as schedules 1 and 2 to that Act;
(c) the National Electricity (Victoria) Act 1997 (Vic), including the
National Electricity Law;
(d) the National Electricity Code;
(e) the gas distribution licence issued by the ORG to Westar;
(f) the electricity distribution licence issued by the ORG to Eastern;
(g) the MSO Rules, the Victorian Gas Industry Tariff Order 1998, the
Wimmera and Colac Tariff Orders, the Victorian Gas Customer Service
Code and any other code, rule or regulation in force in Victoria
affecting the distribution and supply of gas;
(h) the Victorian Electricity Supply Industry Tariff Order, the System
Code, the Distribution Code, the Supply and Sale Code, the Retail
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Tariff Metering Code and any other code, rule or regulation in force
in Victoria affecting the distribution and supply of electricity;
(i) the Gas Industry Act 1994 (Vic), the Gas Safety Act 1997 (Vic), the
Pipelines Act 1967 (Vic) and any other legislation in force in
Victoria affecting the distribution and supply of gas;
(j) the Electricity Industry Act 1993 (Vic), the Electricity Safety Act
1998 (Vic) and any other legislation in force in Victoria affecting
the distribution and supply of electricity;
(k) any legislation which is subordinate to and any regulations under any
legislation falling within any of the Acts mentioned within paragraphs
(a), (b), (c), (g) or (h) above;
(l) policy statements, rulings, guidelines or directives (whether or not
having the force of law) published by or on behalf of the Australian
Competition and Consumer Commission, the Office of the
Regulator-General or the National Competition Council pursuant to
their powers of regulation over the gas or electricity industries in
Victoria;
"REIMBURSABLE COSTS" means:
(a) Direct Field Costs;
(b) Support Costs;
(c) Corporate Overhead Costs,
but excluding all labour costs in relation to entitlements of the Seconded
Employees, whether relating to any contract of employment, long service leave,
workers compensation, superannuation, annual holidays or industrial instrument
of the Seconded employees, but not other remuneration of the Seconded Employees;
"RELATED BODY CORPORATE" of a body corporate means another body corporate which
is related to the first body corporate within the meaning of Section 50 of the
Corporations Law;
"RELEVANT TERMINATION DATE" is the date determined in accordance with clause
2.2(a);
"REPLACEMENT CAPITAL WORKS SERVICES" means:
(a) in respect of the Electricity Distribution Network, the services set
out in schedule 7; and
(b) in respect of the Gas Distribution System, the services set out in
schedule 8.
"REPORTING REQUIREMENTS" means any requirement of TXUN and its Related Bodies
Corporate to enable it to comply with the reporting, notification and accounting
requirements of:
(a) the Corporations Law;
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(b) the Australian Stock Exchange Limited and any other securities
exchange upon which any class of its share or debt capital is listed;
or
(c) the Regulatory Instruments,
relating to the ownership of the Electricity Distribution Network and the Gas
Distribution System by TXUN and its Related Bodies Corporate;
"REPRESENTATIVE" means:
(a) in relation to TXUN, a person at that time appointed by TXUN pursuant
to clause 35.1; and
(b) in relation to the Alliance Service Provider, a person at that time
appointed by the Alliance Service Provider pursuant to clause 35.2;
"SALES TAX" means a tax or impost imposed under the Sales Tax Assessment Act
1992;
"SCADA SYSTEM" means the Supervisory Control and Data Acquisition System
described in schedules 2 and 4;
"SECONDED EMPLOYEES" has the same meaning as in the Secondment Agreement;
"SECONDMENT AGREEMENT" means the agreement of that name between TXUN, Eastern
and the Alliance Service Provider, entered into on the date of this Agreement;
"SERVICE" means each of the Operations and Maintenance Works Services,
Replacement Capital Works Services, the TXUN Initiated Capital Works Services,
and the Customer Initiated Capital Works Services, and "SERVICES" has a
corresponding meaning;
"SHARE OF SAVINGS PAYMENT" means the payment referred to in clause 15.5;
"STOCK" has the same meaning as in the Business Sale Agreement;
"STRATEGIC SPARES" means plant and equipment that is necessary for the operation
of the Gas Distribution System or the Electricity Distribution Network, and
which is likely to be difficult to locate quickly if it is required.
"STRATEGIC SPARES POLICY" means TXUN's policy in relation to maintaining
sufficient Strategic Spares to service the Gas Distribution System and the
Electricity Distribution Network, as notified to the Alliance Service Provider
before the Commencement Date;
"SUBCONTRACTOR" means a third party with whom the Alliance Service Provider
contracts for the provision of any of the Services in accordance with clause
8.1(a), but does not include an employee of the Alliance Service Provider;
"SUPPORT COSTS" means costs directly associated with the provision of the
Services of the kind that are included within the category of support costs as
set out in the Reimbursable Costs model in schedule 22;;
"TARGET COST" means the budget prepared in accordance with clause 14;
15
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"TAX" means a tax, levy, charge, impost, deduction, withholding or duty of any
nature (including stamp and transaction duty and goods and services tax) at any
time:
(a) imposed or levied by any government or Government Agency; or
(b) required to be remitted to, or collected, withheld or assessed by, any
government or Government Agency; and
any related interest, expense, fine, penalty or other charge on those amounts
but only to the extent that such interest, expense, fine, penalty or other
charge is not due to the default, delay or negligence of the Alliance Service
Provider or a breach of Good Practice by the Alliance Service Provider;
"TENIX OFFER" means the offer prepared by the Alliance Service Provider dated 15
November 1999 for the Business and to enter into this Agreement;
"TERMINATION DATE" means the date determined in accordance with clause 2.2(b);
"TLPG PLANT" means the Tempered Liquefied Petroleum Gas plant described in
schedule 4;
"TRANSITION COSTS" means the costs (other than Reimbursable Costs) associated
with the Alliance Service Provider starting to perform the Services in
accordance with this Agreement, including necessary mobilisation costs and
information technology costs;
"TXUN INITIATED CAPITAL WORKS SERVICES" means:
(a) in relation to the Electricity Distribution Network, the services set
out in schedule 9; and
(b) in relation to the Gas Distribution System, the services set out in
schedule 10;
"TXUN'S CUSTOMERS" means persons who:
(a) have premises which are connected to the Electricity Distribution
Network or the Gas Distribution System; or
(b) who are financially responsible to a TXU Company in respect of such a
connection;
"YEAR 2000 COMPLIANCE" means neither the performance nor functionality of any
equipment, program, records, computer systems and related services is affected
by dates before, during and after the year 2000 including the transition from 31
December 1999 to 1 January 2000, and that, in particular:
(a) no value for current date will cause any interruption in operation;
(b) date based functionality must behave consistently for dates before,
during and after the year 2000 and all equipment and software must
calculate, manipulate and represent date correctly for the purposes
for which they were intended;
(c) in all interfaces and data storage, the century in any date must be
specified either explicitly, using either 4 digits or including a
century indicator, or by unambiguous algorithms or inferencing rules;
and
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(d) the year 2000 must be recognised as a leap year,
and "YEAR 2000 COMPLIANT" has a corresponding meaning; and
"WORK SITE" means a site on which the Services are performed.
1.2 INTERPRETATION
In this Agreement, unless the context requires another meaning:
(a) a reference:
(i) to the singular includes the plural and vice versa;
(ii) to a gender includes all genders;
(iii) to a document (including this Agreement) is a reference to
that document (including any Schedules and Annexures) as
amended, consolidated, supplemented, novated or replaced;
(iv) to an agreement includes any undertaking, representation,
deed, agreement or legally enforceable arrangement or
understanding whether written or not;
(v) to a party means TXUN or the Alliance Service Provider;
(vi) to an item, Recital, clause, Schedule or Annexure is to an
item, Recital, clause, Schedule or Annexure of or to this
Agreement;
(vii) to a notice means a notice, approval, demand, request,
nomination or other communication given by one party to
another under or in connection with this Agreement;
(viii) to a person (including a party) includes:
(A) an individual, company, other body corporate,
association, partnership, firm, joint venture,
trust or Government Agency; and
(B) the person's successors, permitted assigns,
substitutes, executors and administrators;
(ix) to a law:
(A) includes a reference to any legislation, treaty,
judgment, rule of common law or equity or rule of
any applicable stock exchange; and
(B) is a reference to that law as amended,
consolidated, supplemented or replaced; and
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(C) includes a reference to any regulation, rule,
statutory instrument, by-law or other subordinate
legislation made under that law;
(x) to proceedings includes litigation;
(xi) to a judgement includes an order, injunction, decree,
determination or award of any court or tribunal;
(xii) to time is to Melbourne time;
(xiii) to an accounting term is to be interpreted according to the
Accounting Standards;
(xiv) to writing includes a facsimile transmission and any means
of reproducing words in a tangible and permanently visible
form; and
(xv) to conduct includes an omission, statement or undertaking,
whether or not in writing.
(b) The word including or includes means including, but not limited to, or
includes, without limitation.
(c) Where a word or phrase is defined, its other grammatical forms have a
corresponding meaning.
(d) Headings are for convenience only and do not affect interpretation.
(e) If a payment or other act must (but for this clause) be made or done
on a day that is not a Business Day, then it must be made or done on
the next Business Day.
(f) If a period occurs from, after or before a day or the day of an act or
event, it excludes that day.
(g) This Agreement may not be construed adversely to a party only because
that party was responsible for preparing it.
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2. TERM
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2.1 COMMENCEMENT
This Agreement commences on the Commencement Date, except that:
(a) the Alliance Board and the Operating Management Team will be
established prior to the Commencement Date in accordance with clause
11; and
(b) the Target Costs will be established prior to the Commencement Date,
in accordance with clause 14.1(a).
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2.2 TERMINATION
(a) Subject to earlier termination in accordance with clause 21, in which
case this Agreement terminates on the date determined in accordance
with clause 21.4, this Agreement terminates on the Termination Date.
(b) The Termination Date is:
(i) if a party gives notice under clause 2.3(a), 5 years after
the Commencement Date; and
(ii) if neither party gives notice under clause 2.3(a), 10 years
after the Commencement Date.
2.3 EARLY TERMINATION
(a) If TXUN or the Alliance Service Provider wishes to terminate this
Agreement after 5 years, that party must give the other party notice
in writing to that effect by 1 January 2004.
(b) If TXUN gives notice under clause 2.3(a), provided that the Alliance
Service Provider is not at that time in breach of this Agreement such
that TXUN has a right to terminate under clause 21, TXUN must pay to
the Alliance Service Provider the sum of $5,000,000 within 12 months
of giving notice to terminate this Agreement under clause 2.3(a) in
addition to any payment payable to the Alliance Service Provider by
TXUN under clause 22.1.
--------------------------------------------------------------------------------
3. APPOINTMENT OF ALLIANCE SERVICE PROVIDER
--------------------------------------------------------------------------------
3.1 ACKNOWLEDGMENT OF APPOINTMENT OF TXUN
(a) Westar acknowledges and agrees that:
(i) it has appointed TXUN to provide the Services in connection
with the Gas Distribution System, with full power and
authority to do all things necessary to do so including by
appointing sub-contractors and agents to provide the
Services;
(ii) TXUN enters this Agreement with the approval of Westar;
(iii) it will do all things and take all action necessary or
desirable to permit the Alliance Service Provider to perform
the Services as contemplated by this Agreement;
(iv) decisions of TXUN under this Agreement will be binding on
and enforceable against Westar.
(b) Eastern acknowledges and agrees that:
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(i) it has appointed TXUN to provide the Services in connection
with the Electricity Distribution Network, with full power
and authority to do all things necessary to do so including
by appointing sub-contractors and agents to provide the
Services;
(ii) TXUN enters this Agreement with the approval of Eastern; and
(iii) it will do all things and take all action necessary or
desirable to permit the Alliance Service Provider to perform
the Services as contemplated by this Agreement; and
(iv) decisions of TXUN under this Agreement will be binding on
and enforceable against Eastern.
3.2 ALLIANCE SERVICE PROVIDER IS APPOINTED
(a) TXUN appoints the Alliance Service Provider to perform or to provide
the Services in accordance with, and subject to, the terms and
conditions of this Agreement.
(b) The Alliance Service Provider accepts the appointment by TXUN referred
to in clause 3.2(a).
3.3 NON-EXCLUSIVE ARRANGEMENT
The Alliance Service Provider is not prevented by anything in this Agreement
from engaging in, or having an interest in any other business, enterprise or
venture.
3.4 LEGAL RELATIONSHIP BETWEEN TXUN AND THE ALLIANCE SERVICE PROVIDER
The Alliance Service Provider is an independent contractor of TXUN, and nothing
in this Agreement:
(a) constitutes the Alliance Service Provider as agent, servant, or an
employee of, or a partner or joint venturer with TXUN; or
(b) gives rise to any other legal relationship with TXUN which:
(i) creates fiduciary or quasi-fiduciary or other similar duties
between TXUN and the Alliance Service Provider;
(ii) subjects TXUN and the Alliance Service Provider to joint and
several liability; or
(iii) subjects TXUN or the Alliance Service Provider to vicarious
liability for the acts and omissions of the other.
3.5 REPRESENTATION
The Alliance Service Provider must not, otherwise than as necessitated by the
performance of the Services:
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(a) except as specifically provided for in this Agreement, represent TXUN
or a TXU Company or hold itself out as representing TXUN or a TXU
Company to any customer or consumer, the Office of the
Regulator-General, a Governmental Agency or any other person; or
(b) make any representation to the Office of the Regulator-General or any
Government Agency about any aspect of the business and affairs of TXUN
or a TXU Company.
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4. SERVICES
--------------------------------------------------------------------------------
4.1 TERM OF THE SERVICES
The Alliance Service Provider must start providing TXUN with the Services at the
Commencement Date in accordance with this Agreement.
4.2 SCOPE OF THE OPERATIONS AND MAINTENANCE WORKS SERVICES AND REPLACEMENT
CAPITAL WORKS SERVICES
The Alliance Service Provider must provide all the Operations and Maintenance
Works Services and the Replacement Capital Works Services required by TXUN under
this Agreement to be performed in relation to the Electricity Distribution
Network and the Gas Distribution System.
4.3 SCOPE OF THE TXUN INITIATED CAPITAL WORKS SERVICES
(a) The Alliance Service Provider must undertake all TXUN Initiated
Capital Works for which TXUN does not require a work plan and costs
estimate under either clause 4.3(b) or 4.3(d).
(b) For major TXUN Initiated Capital Works Services such as mains
renewals, services renewals, connection of new estates, connection of
new customers who are assigned to distribution tariff D, mains
extensions and other large capital projects, unless:
(i) TXUN reasonably considers that the Alliance Service
Provider, either itself or with the assistance of
Subcontractors, does not have sufficient expertise or
experience to undertake a particular TXUN Initiated Capital
Works Service; or
(ii) pursuant to the obligations of a TXU Company under the
Regulatory Instruments, that TXU Company is required to call
for tenders in relation to a particular TXUN Initiated
Capital Works Service,
TXUN may require the Alliance Service Provider to provide a work plan
and costs estimate in relation to that TXUN Initiated Capital Works
Service.
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(c) If TXUN reasonably considers that the work plan and costs estimate
submitted by the Alliance Service Provider pursuant to clause 4.3(b)
is reasonable, the Alliance Service Provider must perform that TXUN
Initiated Capital Works Service.
(d) If:
(i) TXUN reasonably considers that the Alliance Service
Provider, either itself or with the assistance of
Subcontractors, does not have sufficient expertise or
experience to undertake a particular TXUN Initiated Capital
Works Service;
(ii) pursuant to the obligations of a TXU Company under the
Regulatory Instruments, that TXU Company is required to call
for tenders in relation to a particular TXUN Initiated
Capital Works Service; or
(iii) TXUN does not reasonably consider that the work plan and
costs estimate submitted by the Alliance Service Provider
under clause 4.3(b) is reasonable,
TXUN must require the Alliance Service Provider to:
(iv) provide TXUN with a costs estimate approved by the Operating
Management Team for undertaking the management obligation
set out in sub-clause 4.3(d)(v);
(v) manage the performance of the TXUN Initiated Capital Works
Service by the person awarded that service by TXUN or its
nominee through a competitive tender process.
(e) For the avoidance of doubt, the Alliance Service Provider's cost of
undertaking the management obligation set out in sub-clause 4.3(d)(v)
is to be included in the Reimbursable Costs.
4.4 SCOPE OF THE CUSTOMER INITIATED CAPITAL WORKS SERVICES
(a) The Alliance Service Provider must undertake all Customer Initiated
Capital Works for which TXUN does not require a work plan and costs
estimate under either clause 4.4(b) or 4.4(d).
(b) For major Customer Initiated Capital Works Services such as mains
renewals, services renewals, connection of new estates, connection of
new customers who are assigned to distribution tariff D, mains
extensions and other large capital projects, unless:
(i) TXUN reasonably considers that the Alliance Service
Provider, either itself or with the assistance of
Subcontractors, does not have sufficient expertise or
experience to undertake a particular Customer Initiated
Capital Works Service; or
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(ii) pursuant to the obligations of a TXU Company under the
Regulatory Instruments, that TXU Company is required to call
for tenders in relation to a particular Customer Initiated
Capital Works Service,
TXUN may require the Alliance Service Provider to provide a work plan
and costs estimate in relation to that Customer Initiated Capital
Works Service.
(c) If, after receiving the work plan and costs estimate in relation to a
Customer Initiated Capital Works Service submitted by the Alliance
Service Provider pursuant to clause 4.4(b), the customer who initiated
that Customer Initiated Capital Works Service informs TXUN that it
wishes the work to be performed on the basis of that work plan and
costs estimate, the Alliance Service Provider must perform that
Customer Initiated Capital Works Service.
(d) If:
(i) TXUN reasonably considers that the Alliance Service
Provider, either itself or with the assistance of
Subcontractors, does not have sufficient expertise or
experience to undertake a particular Customer Initiated
Capital Works Service;
(ii) pursuant to the obligations of a TXU Company under the
Regulatory Instruments, that TXU Company is required to call
for tenders in relation to a particular Customer Initiated
Capital Works Service; or
(iii) after receiving the work plan and costs estimate in relation
to a Customer Initiated Capital Works Service submitted by
the Alliance Service Provider pursuant to clause 4.4(b), the
customer who initiated that Customer Initiated Capital Works
Service informs TXUN that it wishes to call for further work
plans and costs estimates,
and the customer who initiated the Customer Initiated Capital Works
Service requests TXUN to undertake a tender process on behalf of the
Customer, the Alliance Service Provider must:
(iv) provide TXUN with a costs estimate approved by the Operating
Management Team for undertaking the management obligation
set out in sub-clause 4.4(d)(v);
(v) manage the performance of the TXUN Initiated Capital Works
Service by the person awarded that service by TXUN or its
nominee through a competitive tender process.
(e) For the avoidance of doubt, the Alliance Service Provider's cost of
undertaking the management obligation set out in sub-clause 4.4(d)(v)
is to be included in the Reimbursable Costs.
(f) If:
(i) TXUN reasonably considers that the Alliance Service Provider
does not, either itself or with the assistance of
Subcontractors, have sufficient expertise or experience to
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<PAGE>
undertake a particular Customer Initiated Capital Works
Service;
(ii) pursuant to the obligations of a TXU Company under the
Regulatory Instruments, that TXU Company is required to call
for tenders in relation to a particular Customer Initiated
Capital Works Service; or
(iii) after receiving the work plan and costs estimate in relation
to a Customer Initiated Capital Works Service submitted by
the Alliance Service Provider under clause 4.4(b), the
customer who initiated that Customer Initiated Capital Works
Service informs TXUN that it wishes to call for further work
plans and costs estimates,
and the customer who initiated the Customer Initiated Capital Works
Service decides to undertake its own tender process for those works:
(iv) the Alliance Service Provider may choose to submit a tender
for those works; and
(v) if those works are awarded by the customer to the Alliance
Service Provider, the agreement between the Alliance Service
Provider and the customer is a separate commercial
arrangement and will have no impact on:
(A) the Reimbursable Costs;
(B) the Target Costs;
(C) the Share of Savings Payment; or
(D) the Non-Financial Incentive Fee,
under this Agreement.
4.5 PROVISION OF THE SERVICES
(a) The Alliance Service Provider must provide the Services in accordance
with:
(i) all applicable laws and Regulatory Instruments;
(ii) the Minimum Service Standards; and
(iii) the Business Processes set out in schedule 13.
(b) The Alliance Service Provider must ensure the Services are delivered
efficiently and with the primary objective of doing so cost
efficiently.
(c) In providing the Services, the Alliance Service Provider must:
(i) liaise with TXUN, customers, developers, other contractors,
Governmental Agencies, retailers and other interested
parties in planning annual and periodic construction
activities;
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(ii) comply with its obligations under the Material Contracts;
(iii) act as the central point of reference for assessing works
proposed by customers, developers, other contractors,
Governmental Agencies, retailers and other interested
parties which would impact on the performance and
development of the Electricity Distribution Network or Gas
Distribution System, including:
(A) assisting TXUN in drafting responses to such
proposals; and
(B) assisting TXUN in applying for any necessary
easements;
(iv) assist TXUN in developing new maintenance plans to optimise
life cycle costs of Electricity Distribution Network and Gas
Distribution System infrastructure;
(v) liaise with TXUN, customers, Governmental Agencies and
contractors in the preparation of detailed designs,
including:
(A) material selection;
(B) surveying or drafting of extensions or expansions
of the Electricity Distribution Network or Gas
Distribution System; and
(C) surveying or drafting of replacements or changes
of the existing Electricity Distribution Network
or Gas Distribution System;
(vi) prepare cost estimates in respect of particular Services, as
requested by TXUN, a Customer or a Governmental Agency;
(vii) take full authority for scheduling of all Services to ensure
Services are performed within the timeframes agreed between
TXUN and the Alliance Service Provider;
(viii) undertake:
(A) temporary and/or permanent reinstatement of public
areas, as required by the relevant Governmental
Authority;
(B) spoil removal activities; and
(C) waste disposal activities,
at each site at which Services are carried out;
(ix) seek approval from TXUN in respect of any changes to the
Electricity Distribution Network or Gas Distribution System
affecting:
(A) configuration of the Electricity Distribution
Network and Gas Distribution System; and/or
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(B) system security;
(x) assist TXUN in maintaining asset data concerning the
Electricity Distribution Network and the Gas Distribution
System, by updating hard copy plans and asset databases
either by:
(A) providing "as constructed" drawings; or
(B) direct input into the information technology
systems specified in schedule 14,
as appropriate;
(xi) obtain within a reasonable time of the Commencement Date and
maintain AS/NZ ISO 9000, 9001 and 9002 accreditation;
(xii) provide information to TXUN in respect of the Services, to
assist TXUN in updating and improving technical policies,
procedures, standards and specifications; and
(xiii) maintain Strategic Spares in accordance with TXUN's
Strategic Spares Policy.
(d) The Alliance Service Provider must not:
(i) control either the Electricity Distribution Network or the
Gas Distribution System, except at the direction of TXUN;
(ii) undertake any activities affecting:
(A) high voltage and low voltage operations on the
Electricity Distribution Network;
(B) suppressions or parallels on the Electricity
Distribution Network; or
(C) system pressure on the Gas Distribution System,
without the consent of TXUN;
(iii) undertake any Services which may, in the Alliance Service
Provider's reasonable opinion, have a significant impact on:
(A) the business of a TXU Company or any of its
Related Bodies Corporate; or
(B) the reputation in the community of a TXU Company
or any of its Related Bodies Corporate,
without the consent of TXUN; or
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(iv) engage in any activity which would in any way adversely
affect or impair the Alliance Service Provider's ability to
perform the Services in an independent manner.
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5. ALLIANCE SERVICE PROVIDER'S OBLIGATIONS
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5.1 STAFF AND EQUIPMENT
The Alliance Service Provider must, from time to time:
(a) engage sufficient employees, or appoint sufficient Subcontractors
under clause 8.1; and
(b) acquire sufficient equipment and materials,
to enable the Alliance Service Provider to perform its obligations under this
Agreement.
5.2 COMPLY WITH TXUN'S POLICIES
The Alliance Service Provider must comply with any policies set out in schedule
21, as varied by agreement between TXUN and the Alliance Service Provider, in
respect of the relationship between the Alliance Service Provider and the
customers of the TXU Companies.
5.3 DEFECTIVE WORK
(a) If any of the works completed by the Alliance Service Provider in
performing the Services are defective, TXUN must provide written
notice to the Alliance Service Provider identifying the defective
work.
(b) If the Alliance Service Provider receives a notice under clause 5.3(a)
it must, as soon as reasonably possible, perform the redesign, repair,
rework or replacement of the defective work specified in that notice.
(c) If:
(i) the Alliance Service Provider does not perform the redesign,
repair, rework or replacement of defective work as soon as
reasonably possible in accordance with clause 5.3(b); or
(ii) TXUN is, on reasonable grounds, dissatisfied with the
redesign, repair, rework or replacement of defective work
performed by the Alliance Service Provider after receipt of
a notice from TXUN under clause 5.3(a), TXUN may contract
with another person to perform the redesign, repair, rework
or replacement of the defective work, and recover from the
Alliance Service Provider for the redesign, repair, rework
or replacement of the defective work carried out by the
other person by way of a set off to the amount payable by
TXUN under the next invoice provided to TXUN by the Alliance
Service Provider under clause 16.
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6. TXUN'S OBLIGATIONS
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6.1 GENERAL OBLIGATIONS
TXUN must:
(a) provide the Alliance Service Provider; and
(b) procure that its officers, employees, agents and representatives
provide the Alliance Service Provider,
with all reasonable assistance and cooperation as is required from time to time
to enable the Alliance Service Provider to perform the Services under this
Agreement, including:
(c) access to any Distribution Asset, the Electricity Distribution Network
and the Gas Distribution System;
(d) access to all relevant information in the possession, custody or
control of the TXU Companies relating to the Electricity Distribution
Network and the Gas Distribution System;
(e) obtaining, maintaining and renewing all Authorisations required for
the continuous operation of the Electricity Distribution Network and
the Gas Distribution System;
(f) complying with all Laws affecting the continuous operation of the
Electricity Distribution Network and Gas Distribution System; and
(g) not doing anything which could void or render voidable any Insurance
Policy.
6.2 POWERS TO DO WORKS
(a) Eastern authorises:
(i) the Alliance Service Provider and its officers and
employees; and
(ii) any Subcontractor appointed by the Alliance Service Provider
and its officers and employees,
under section 47(3A) of the Electricity Industry Act 1993 (Vic) to
exercise any of Eastern's powers under section 47 of that Act
necessary to perform the Services in accordance with this Agreement,
until the Relevant Termination Date.
(b) Westar authorises:
(i) the Alliance Service Provider and its officers and
employees; and
(ii) any Subcontractor appointed by the Alliance Service Provider
and its officers and employees,
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under section 53(4) of the Gas Industry Act 1994 (Vic) to exercise any
of Westar's powers under section 53 of that Act necessary to perform
the Services in accordance with this Agreement, until the Relevant
Termination Date.
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7. COOPERATION AND RESPONSE TO PROPOSALS
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A party must:
(a) provide the other party with; and
(b) procure that its officers, employees, agents, representatives and
Subcontractors provide the other party with:
all reasonable assistance and cooperation as is required from time to time in
relation to the performance of the Services under this Agreement, including:
(c) promptly responding (whether by way of acceptance or rejection) to any
request or proposal in relation to the performance of the Services
notified from time to time by the other party under this Agreement;
and
(d) providing reasonable information in relation to the Services, when
reasonably requested by the other party.
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8. ALLIANCE SERVICE PROVIDER'S CONTRACTS
--------------------------------------------------------------------------------
8.1 SUBCONTRACTORS AND AGENTS OF ALLIANCE SERVICE PROVIDER
(a) Subject to this clause 8, the Alliance Service Provider may appoint
another person (whether or not a Related Body Corporate of the
Alliance Service Provider), either as agent or contractor of the
Alliance Service Provider, to provide any of the Services, with the
prior written consent of the Operating Management Team.
(b) The Alliance Service Provider must not charge a mark up or commission
on a Service provided by a Subcontractor.
(c) Subject to clause 8.1(a), the Alliance Service Provider must not enter
into a contract or arrangement with a Subcontractor:
(i) unless that person is, in the Alliance Service Provider's
reasonable opinion, suitably qualified, experienced and
competent to perform that obligation in accordance with Good
Practice; and
(ii) except in good faith and on arm's length and on commercial
terms.
(d) The Alliance Service Provider must not enter into a contract or
arrangement with a Subcontractor unless the Alliance Service Provider
continues to remain responsible to TXUN for the performances of the
Services.
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(e) The Alliance Service Provider must not enter into a contract or
arrangement with a Subcontractor which has the effect of, or purports
to have the effect of releasing the Alliance Service Provider from, or
reducing the extent of, its obligations under this Agreement.
(f) The Alliance Service Provider must require a Subcontractor to take out
and maintain insurance to a level and on terms which are consistent
with the Alliance Service Provider's obligations in respect of
insurance in clause 13 (except that TXUN acknowledges that it is
sufficient if Abigroup Maintenance Services Pty Ltd is an insured
party under Tenix's insurance arrangements).
8.2 FORM OF THE ALLIANCE SERVICE PROVIDER'S CONTRACTS
(a) The Alliance Service Provider must include as a term of any material
contract into which it enters with a third party for or incidental to
the performance of the Services, including its contracts with a
Subcontractor:
(i) a right on the part of the Alliance Service Provider, at its
option, to assign or novate that contract to TXUN (or to a
nominee of TXUN which is creditworthy and able to comply
with its obligations under that contract) on the Termination
Date;
(ii) obligations on the third party to maintain and safely store
records in relation to the Services on substantially the
same terms as the Alliance Service Provider's obligations
under clause 17.3; and
(iii) an unconditional right on the part of the Alliance Service
Provider of access to and right to make copies of records
kept in accordance with clause 17.3.
(b) The Alliance Service Provider must consult with TXUN before entering
into a contract if the Alliance Service Provider reasonably believes
that to include the conditions referred to in clause 8.2(a) would
(i) materially increase the costs to the Alliance Service
Provider of the provision of the Services; or
(ii) render materially less favourable the proposed contract with
the third party.
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9. EMPLOYEES
--------------------------------------------------------------------------------
(a) The Alliance Service Provider must:
(i) maintain, either directly or through Subcontractors or
appropriate secondment arrangements, a workforce qualified
to perform the Services;
(ii) provide, in respect of its employees who perform the
Services, all certifications, licenses, procedures, quality
assurance programs and training programs that are:
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(A) customary in the industry; or
(B) reasonably required by TXUN.
(b) The Alliance Service Provider must, in respect of its employees who
perform the Services:
(i) ensure that all those employees are suitably competent and
experienced; and
(ii) provide within a reasonable time of the Commencement Date a
safe working environment for those employees in accordance
with legal requirements.
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10. MATERIAL CONTRACTS
--------------------------------------------------------------------------------
(a) TXUN must provide the Alliance Service Provider with copies of the
Material Contracts at least 21 days before the Commencement Date.
(b) Despite clause 3.5, TXUN authorises the Alliance Service Provider to
act on its behalf in relation to the Material Contracts, and exercise
all of its rights and obligations under the Material Contracts.
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11. ADMINISTRATION OF THE SERVICES
--------------------------------------------------------------------------------
11.1 FORMATION OF THE ALLIANCE BOARD
(a) Within 20 Business Days of the execution of this Agreement, the
parties must establish an Alliance Board, the membership of which is
to be agreed by the parties.
(b) The Alliance Board will consist of six members comprising:
(i) three members nominated by TXUN; and
(ii) three members nominated by the Alliance Service Provider,
or will be constituted in such other way as the parties agree.
(c) A party must ensure that at least one person it nominates to the
Alliance Board has authority to act on behalf of, and bind, that
party.
11.2 ONGOING OPERATION OF THE ALLIANCE BOARD
(a) Each party must ensure that the Alliance Board continues to operate
throughout the term, in accordance with its rights, functions and
obligations under this clause 11.
(b) A party may, at any time, nominate a new member of the Alliance Board
to replace a member of the Alliance Board previously nominated by that
party.
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11.3 RESPONSIBILITIES OF THE ALLIANCE BOARD
The Alliance Board will be responsible for:
(a) ensuring a cooperative relationship between TXUN and the Alliance
Service Provider;
(b) facilitating the resolution of disputes by negotiation, in accordance
with the Dispute Resolution Procedure;
(c) monitoring the Services performed by the Alliance Service Provider,
and the performance of key personnel of TXUN and the Alliance Service
Provider in the performance of the Services, including by receiving
reports from the Operating Management Team;
(d) reporting to TXUN and the Alliance Service Provider on the Alliance
Service Provider's performance of the Services;
(e) reviewing and making recommendations to TXUN and the Alliance Service
Provider regarding:
(i) how communications, co-operation and performance may be
enhanced by, amongst other things, changes to personnel or
procedures; and
(ii) improvement of standards of performance of the Services;
(f) ensuring continuous improvement of the delivery of the Services;
(g) promoting the interests of both TXUN and the Alliance Service
Provider; and
(h) undertaking such other functions as the parties agree should be
undertaken by the Alliance Board.
11.4 FORMATION OF THE OPERATING MANAGEMENT TEAM
(a) Within 5 Business Days of the first meeting of the Alliance Board, the
parties must establish an Operating Management Team, the members of
which have been approved by the Alliance Board.
(b) The Operating Management Team will consist of six members comprising:
(i) the Project Manager appointed by TXUN under clause 11.6(c)
and two other members nominated by TXUN;
(ii) the Project Manager appointed by the Alliance Service
Provider under clause 11.6(c) and two other members
nominated by the Alliance Service Provider
or will be constituted in such other way as the parties agree.
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(c) Each party must appoint a Project Manager who is the person who is
responsible for the day to day administration of this contract and
performance of the Services on behalf of that party.
11.5 ONGOING OPERATION OF THE OPERATING MANAGEMENT TEAM
(a) Each party must ensure that the Operating Management Team continues to
operate throughout the term, in accordance with its rights, functions
and obligations under this clause 11.
(b) A party may, at any time, with the approval of the Alliance Board,
appoint a new member of the Operating Management Team to replace a
member of the Operating Management Team previously nominated by that
party.
11.6 RESPONSIBILITIES OF THE OPERATING MANAGEMENT TEAM
The Operating Management Team will be responsible for:
(a) taking responsibility for the day to day administration of this
contract and the administration of the performance of the Services in
accordance with this contract; and
(b) promptly reporting to the Alliance Board:
(i) in relation to any issue on which a member of the Alliance
Board requests a report; and
(ii) in relation to any significant issue identified by the
Operating Management Team in carrying out its functions
under clause 11.8(a); and
(c) undertaking such other functions as the parties agree should be
undertaken by the Alliance Board.
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12. ALTERATION OF THE SERVICES
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12.1 TXUN MAY NOTIFY AN ALTERATION OF THE SERVICES
TXUN may, by written notice to the Alliance Service Provider:
(a) increase or decrease any of the Services;
(b) omit any of the Services;
(c) include new services in the Services; or
(d) otherwise alter the performance of the Services,
provided that the alteration does not alter the fundamental nature of the
Services.
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12.2 ALTERATION CLAIM BY ALLIANCE SERVICE PROVIDER
(a) If TXUN gives notice under clause 12.1 or gives notice of a suspension
for convenience under clause 23.2(a), the Alliance Service Provider
may request by written notice to TXUN, an adjustment to either or both
of:
(i) the Target Costs; and
(ii) the way in which the Reimbursable Costs are calculated or
reimbursed under this Agreement (including any reasonable
costs or liabilities associated with the change in scope
such as redundancy costs and demobilisation costs).
(b) The Alliance Service Provider must ensure that the written notice
provided by the Alliance Service Provider to TXUN under clause
12.2(a):
(i) is provided within 20 Business Days of having received the
notice from TXUN under clause 12.1;
(ii) sets out whether the Alliance Service Provider considers
that the alteration sought by TXUN under clause 12.1 amounts
to a:
(A) Gas Material Change; or
(B) Electricity Material Change.
(iii) sets out the specific adjustment sought by the Alliance
Service Provider to either or both of:
(A) the Target Costs, which must be in accordance with
schedule 15; and
(B) the way in which the Reimbursable Costs are
calculated or reimbursed under this Agreement with
the overriding principle that the Alliance Service
Provider will not be financially disadvantaged in
anyway as a result of any reduction in the scope
of Services.
12.3 RESPONSE TO ALTERATION CLAIM BY TXUN
(a) If the Alliance Service Provider gives notice to TXUN under clause
12.2, TXUN must:
(i) if the alteration amounts to a:
(A) Gas Material Change; or
(B) Electricity Material Change,
pay the Alliance Service Provider 5% of the value of that
Gas Material Change or Electricity Material Change at the
time of the next payment of Reimbursable Costs into a bank
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account nominated by the Alliance Service Provider under
clause 16.2(c);
(ii) decide, acting reasonably, whether it accepts or rejects the
specific adjustment sought by the Alliance Service Provider
to:
(A) the Target Costs; and
(B) the way in which the Reimbursable Costs are
calculated or reimbursed under this Agreement; and
(iii) notify the Alliance Service Provider in writing of its
decisions under clause 12.3(i) and (ii) within 10 Business
Days of receiving the notice from the Alliance Service
Provider.
(b) If:
(i) the Alliance Service Provider does not provide a notice to
TXUN under clause 12.2;
(ii) TXUN's notice provided to the Alliance Service Provider
under clause 12.3(a)(iii) rejects:
(A) the Alliance Service Provider's submission that
the alteration amounts to a Gas Material Change or
Electricity Material Change; or
(B) the adjustment sought by the Alliance Service
Provider;
(iii) TXUN does not notify the Alliance Service Provider of its
decision in accordance with its obligation in clause
12.3(a)(iii),
then:
(iv) if the alteration of the Services notified by TXUN under
clause 12.1 involved an increase in the scope of the
Services:
(A) the Alliance Service Provider is not required to
comply with the increased scope of the Services as
set out in the notice under clause 12.1, but may
revise its adjustment provided under clause
12.2(a) within 10 Business Days of receiving
notice from TXUN under clause 12.3(a) and TXUN
must, comply with the requirements of clause
12.3(a) in relation to that revised adjustment;
(B) the Alliance Service Provider must provide
reasonable assistance to any other person
appointed by TXUN to provide such services;
(C) TXUN must ensure that any other person appointed
by TXUN to provide those services conforms to the
prevailing work site practices and procedures
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which apply to the Alliance Service Provider,
including industrial relations procedures;
(D) TXUN must ensure that any other person appointed
by TXUN to provide those services does not impede
or delay the Alliance Service Provider in the
performance of the Services.
(v) if the alteration of the Services notified by TXUN under
clause 12.1 involved a decrease in the scope of the
Services, a party may refer the matter to be resolved
through the Dispute Resolution Procedure.
12.4 HOW TARGET COSTS ARE ADJUSTED
If, as a result of the operation of the Dispute Resolution Procedure under
clause 12.3(b)(v), the Target Costs are to be adjusted, that adjustment must be
effected in accordance with schedule 15.
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13. INSURANCE
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13.1 INSURANCES TO BE MAINTAINED BY THE ALLIANCE SERVICE PROVIDER
(a) The Alliance Service Provider must, throughout the term of this
Agreement, take out, maintain and pay all premiums for insurance
policies in respect of the following liabilities:
(i) public liability, including bushfire mitigation, of $300
million;
(ii) professional indemnity of $20 million;
(iii) contracts works of $7 million;;
(iv) motor vehicle to the extent required by Law;
(v) WorkCover to the extent required by Law;
in respect of the performance by the Alliance Service Provider of the
Services, and the employees of the Alliance Service Provider
performing the Services.
(b) The Alliance Service Provider must ensure that each of the Insurance
Policies (except the Insurance Policy relating to professional
indemnity insurance) names TXUN as a joint insured under that policy.
(c) The Alliance Service Provider must ensure that the Insurance Policies
(except for WorkCover or equivalent insurance) comply with the
following requirements:
(i) the insurer may only cancel a policy in the circumstances
provided in the Insurance Contracts Act 1984;
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(ii) a breach of an Insurance Policy, term or condition or any
non-disclosure or misrepresentation or any other act or
omission by an insured will not invalidate the cover in
respect of the other insured parties; and
an Insurance Policy may only be cancelled or reduced on 3 months' written notice
by the insurer to all parties named in the Insurance Policy except that the
insurer may cancel the coverage for non-payment of premiums on giving the
insured parties 10 Business Days' written notice of the failure of the insured
parties to make such payment.
13.2 CLAIMS UNDER INSURANCE POLICIES
(a) The Alliance Service Provider must notify TXUN within 30 days of any:
(i) claim; or
(ii) series of claims,
under any of the Insurance Policies, arising from the same or directly
related set of circumstances or events the aggregate of which is in
excess of:
(iii) $50,000; or
(iv) such other amount as TXUN and the Alliance Service Provider
agree from time to time.
(b) The Alliance Service Provider must include, in a notice given under
clause 13.2(a), full details of the incident or event giving rise to
the relevant claim or claims.
(c) Either party may notify the other party of any other insurance claim
relating to the Insurance Policies, the provision of the Services or
the operation, servicing and administration of the Electricity
Distribution Network or Gas Distribution System.
(d) If a party notifies the other party of an insurance claim under clause
13.2(a) or 13.2(c), the other party must give all such assistance as
may reasonably be required for the preparation and negotiation of that
insurance claim.
(e) The Alliance Service Provider may:
(i) claim the deductible or excess under any Insurance Policy as
a Reimbursable Cost; and
(ii) increase the Target Costs by the amount of the deductible or
excess under any Insurance Policy,
only if the loss the subject of the claim under an Insurance Policy
was caused by a negligent or wrongful act, default or omission of a
TXU Company.
13.3 INSURANCE PROCEEDS
Subject to the provisions of the Insurance Policy, the Alliance Service Provider
must, at the direction of TXUN, apply all insurance proceeds collected under an
Insurance Policy against the insured loss.
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13.4 COMPLY WITH INSURANCES
(a) Each party must:
(i) comply with all of the conditions and requirements of the
insurers in connection with the settlement of claims, the
recovery of losses and the prevention of accidents under the
Insurance Policies; and
(ii) bear at its own cost its failure to comply with the
conditions and requirements of the insurers referred to in
clause 13.4(a)(i),
until termination of this Agreement.
(b) Each party must:
(i) not do or omit to do anything; and
(ii) ensure that their respective employees, agents,
Subcontractors and suppliers (but in the case of TXUN
excluding the Alliance Service Provider) must not do or omit
to do anything,
that might:
(iii) render unenforceable or unobtainable any of the insurances
otherwise available under an Insurance Policy; or
(iv) entitle any insurer to avoid liability under an Insurance
Policy.
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14. TARGET COST
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14.1 ESTABLISHING THE TARGET COSTS
(a) The Operating Management Team must, with the primary objective of
setting a Target Cost at a level which is realistic and achievable for
the Alliance Service Provider, determine and submit to TXUN on or
before the Commencement Date a reasonable Target Cost (not including
GST) for:
(i) the Direct Field Costs associated with the proposed
Operations and Maintenance Works Services and Replacement
Capital Works Services necessary to maintain the Gas
Distribution System and the Electricity Distribution Network
in accordance with Good Practice;
(ii) the Support Costs associated with the proposed Operations
and Maintenance Works Services, Replacement Capital Works
Services, TXUN Initiated Capital Works Services and Customer
Initiated Capital Works Services;
(iii) the labour costs of TXUN in relation to entitlements of the
Seconded Employees in performing the Services, whether
relating to any contract of employment, long service leave,
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workers compensation, superannuation, annual holidays or
industrial instrument of the Seconded Employees, but not
other remuneration of the Seconded Employees; and
(iv) the Corporate Overhead Costs,
for the Calendar Year 2000, and the basis for determining those costs,
(distinguishing between services relating to the Gas Distribution
System and services relating to the Electricity Distribution Network)
which will, upon approval by TXUN, and subject to adjustments pursuant
to clauses 12, 13.2(e)(ii), 14.1(f), 14.2, 14.3, 14.4, or 14.5, form
the initial Target Cost for the Alliance Service Provider for the
years 2000 to 2004.
(b) The Operating Management Team must determine and submit to TXUN on or
before the date specified in clause 2.3(a) a reasonable Target Cost
for
(i) the Direct Field Costs associated with the proposed
Operations and Maintenance Works Services and Replacement
Capital Works Services necessary to maintain the Gas
Distribution System and the Electricity Distribution Network
in accordance with Good Practice;
(ii) the Support Costs associated with the proposed Operations
and Maintenance Works Services, Replacement Capital Works
Services, TXUN Initiated Capital Works Services and Customer
Initiated Capital Works Services; and
(iii) the Corporate Overhead Costs,
for the Calendar Year 2005, which will, upon approval by TXUN, and
subject to adjustments pursuant to clauses 12, 13.2(e)(ii) 14.1(g),
14.2, 14.3, 14.4, or 14.5, form the initial Target Cost for the
Alliance Service Provider for the years 2000 to 2004.
(c) TXUN must:
(i) not unreasonably withhold its approval under clause 14.1(a)
or 14.1(b); and
(ii) inform the Alliance Service Provider within 10 Business Days
whether it has approved the Target Costs submitted to it
under clause 14.1(a) or 14.1(b).
(d) If:
(i) the Operating and Management Team does not determine and
submit to TXUN on or before the Commencement Date a
reasonable Target Cost in accordance with clause 14.1(a); or
(ii) TXUN does not approve under clause 14.1(c) the Target Cost
submitted by the Operating Management Team under clause
14.1(a),
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the Target Cost in relation to the Direct Field Costs and Support
Costs for the proposed Operations and Maintenance Works Services and
Replacement Capital Works Services will be deemed to be the Target
Costs for proposed Operations and Maintenance Works Services and
Replacement Capital Works Services set out in schedule 22, and the
Target Costs for the Corporate Overhead Costs will be deemed to be as
set out in the TenixOffer.
(e) If:
(i) the Operating and Management Team does not determine and
submit to TXUN on or before the date specified in clause
2.3(a) a reasonable Target Cost in accordance with clause
14.1(b); or
(ii) TXUN does not approve under clause 14.1(c) the Target Cost
submitted by the Operating Management Team under clause
14.1(b),
the Alliance Service Provider is deemed to have given notice to TXUN
under clause 39.2(f)(iii) and the Target Cost will be set by an
Independent Expert acting in accordance with clause 39.3.
(f) On 1 January 2001, 2002, 2003 and 2004, the Target Cost for that year
determined pursuant to clause 14.1(a) or 14.1(d) will be adjusted in
accordance with the following formula:
TCt = TCt-1 x CPIt
where
TCt is the Target Cost for Calendar Year "t";
TCt-1 is the Target Cost for Calendar Year "t-1"; and
CPIt is the CPI for Calendar Year "t".
(g) On 1 January 2006, 2007, 2008 and 2009, the Target Cost for that year
determined pursuant to clause 14.1(c) or 14.1(e) will be adjusted in
accordance with the following formula:
TCt = TCt-1 x CPIt
where
TCt is the Target Cost for Calendar Year "t";
TCt-1 is the Target Cost for Calendar Year "t-1"; and
CPIt is the CPI for Calendar Year "t".
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14.2 TARGET COST ADJUSTMENT FOR MISTAKE
(a) If a party considers that there is a Mistake in a budgeted expenditure
in the adopted Target Cost, that party may notify the Operating
Management Team of the issue and the Operating Management Team must:
(i) consider in good faith whether there is a Mistake; and
(ii) if there is a Mistake, increase or decrease the budgeted
expenditure in that Target Cost to correct the impact of
that Mistake.
(b) If the Operating Management Team revises any budgeted expenditure
included in a Target Cost in accordance with clause 14.2(a), either by
its decision or as a result of the Dispute Resolution Procedure, that
revised budgeted expenditure will replace those in the Target Cost
from a date fixed by the Operating Management Team or through the
Dispute Resolution Procedure.
14.3 TARGET COST ADJUSTMENT FOR INTRODUCTION OF GST
(a) If a party considers that the Target Cost should be adjusted to take
into account the effect of the introduction of the GST and the removal
of Sales Tax, that party may notify the Operating Management Team of
the issue and the Operating Management Team must:
(i) consider in good faith what alteration to the Target Costs
is necessary to take account of the introduction of GST and
the removal of Sales Tax; and
(ii) increase or decrease the Target Cost to take account of the
introduction of GST and the removal of Sales Tax.
(b) If the Operating Management Team revises any budgeted expenditure
included in a Target Cost in accordance with clause 14.3(a), either by
its decision or as a result of the Dispute Resolution Procedure, that
revised budgeted expenditure will replace those in the Target Cost
from a date fixed by the Operating Management Team or through the
Dispute Resolution Procedure.
14.4 TARGET COST ADJUSTMENT FOR TXUN INITIATED CAPITAL WORKS SERVICES AND
CUSTOMER INITIATED CAPITAL WORKS SERVICES
(a) If the Alliance Service Provider undertakes a TXUN Initiated Capital
Works Service for which TXUN does not require a work plan and costs
estimate pursuant to clauses 4.3(b) or 4.3(d), the cost of performing
that TXUN Initiated Capital Works Service at Prevailing Market Rates
will, at the time the work is performed, be:
(i) added to; and
(ii) deemed to form part of,
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the Direct Field Costs of performing the TXUN Initiated Capital Works
Services in the Target Cost for that year.
(b) If the Alliance Service Provider itself undertakes a TXUN Initiated
Capital Works Service, the costs estimate it submitted to TXUN in
respect of that TXUN Initiated Capital Works Service under clause
4.3(b) or as provided during the competitive tender process run by
TXUN or its nominee (as relevant) will, at the time the costs estimate
is approved, be:
(i) added to; and
(ii) deemed to form part of,
the Direct Field Costs of performing the TXUN Initiated Capital Works
Services in the Target Cost for that year.
(c) If the Alliance Service Provider manages the performance of a TXUN
Initiated Capital Works Service in accordance with clauses 4.3(d)(v),
the costs estimate it submitted to TXUN under clause 4.3(d)(iv) will,
at the time the costs estimate is approved, be:
(i) added to; and
(ii) deemed to form part of,
the Direct Field Costs of performing the TXUN Initiated Capital Works
Services in the Target Cost for that year.
(d) If the Alliance Service Provider undertakes a Customer Initiated
Capital Works Service for which TXUN does not require a work plan and
costs estimate pursuant to clauses 4.4(b) or 4.4(d), the cost of
performing that Customer Initiated Capital Works Service at Prevailing
Market Rates will, at the time the work is performed, be:
(i) added to; and
(ii) deemed to form part of,
the Direct Field Costs of performing the Customer Initiated Capital
Works Services in the Target Cost for that year.
(e) If the Alliance Service Provider itself undertakes a Customer
Initiated Capital Works Service, the costs estimate it submitted to
TXUN in respect of that Customer Initiated Capital Works Service under
clause 4.4(b)(i) or as provided during the competitive tender process
run by TXUN or its nominee (as relevant) will, at the time the costs
estimate is approved, be:
(i) added to; and
(ii) deemed to form part of,
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the Direct Field Costs of performing the Customer Initiated Capital
Works Services in the Target Cost for that year.
(f) If the Alliance Service Provider manages the performance of a Customer
Initiated Capital Works Service in accordance with clauses 4.4(d)(v),
the costs estimate it submitted to TXUN under clause 4.4(d)(iv) will,
at the time the costs estimate is approved, be:
(i) added to; and
(ii) deemed to form part of,
the Direct Field Costs of performing the Customer Initiated Capital
Works Services in the Target Cost for that year.
14.5 TARGET COST ADJUSTMENT FOR MATERIAL UNFORESEEN CIRCUMSTANCES
(a) If a party considers that a Material Unforeseen Circumstance has
occurred, that party must notify the Operating Management Team of the
issue and the Operating Management Team must:
(i) consider in good faith whether a Material Unforeseen
Circumstance has occurred; and
(ii) if a Material Unforeseen Circumstance has occurred, increase
or decrease the budgeted expenditure in that Target Cost to
remove the impact of that Material Unforeseen Circumstance.
(b) If the Operating Management Team revises any budgeted expenditure
included in a Target Cost in accordance with clause 14.5(a), either by
its decision or as a result of the Dispute Resolution Procedure, that
revised budgeted expenditure will replace those in the Target Cost
from a date fixed by the Operating Management Team or through the
Dispute Resolution Procedure.
14.6 BENCHMARKING THE CONTRACTOR
(a) TXUN may, in its absolute discretion, Benchmark the performance of the
Services by the Alliance Service Provider, (including by comparing the
Alliance Service Provider's Reimbursable Costs with the cost estimates
and work plans provided by other persons in tendering to perform the
TXUN Initiated Capital Works Services and Customer Initiated Capital
Works Services).
(b) If the results of any Benchmarking undertaken pursuant to clause
14.6(a) indicate, in TXUN's reasonable opinion, that the projected
costs of the Alliance Service Provider or a Subcontractor engaged by
the Alliance Service Provider in relation to any part of the Services
are consistently in excess of Benchmarked Cost, the Alliance Service
Provider must:
(i) promptly discuss with TXUN the implementation of; and
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(ii) as soon as reasonably practicable implement,
a program approved by TXUN (acting reasonably) to reduce the Alliance
Service Provider's or the Subcontractor's costs for that expenditure
or class of expenditure to the level of, or lower than, the level of
the Benchmarked Cost within a reasonable period of time.
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15. ALLIANCE SERVICE PROVIDER'S REMUNERATION
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15.1 COMPONENTS OF ALLIANCE SERVICE PROVIDER'S REMUNERATION
TXUN must remunerate the Alliance Service Provider:
(a) pursuant to clause 15.2 for Reimbursable Costs;
(b) pursuant to clause 15.3 for the Management Fee; and
(c) pursuant to clause 15.4 for the Non-Financial Incentive Fee;
(d) pursuant to clause 15.5 for the Share of Savings Payment; and
(e) pursuant to clause 15.6 for the Transition Costs.
15.2 ALLIANCE SERVICE PROVIDER'S REIMBURSABLE COSTS
(a) TXUN must pay the Alliance Service Provider the following costs:
(i) the Direct Field Costs and Support Costs, in accordance with
clause 15.2(b) and 15.2(c); and
(ii) the Corporate Overhead Costs, in accordance with clause
15.2(d).
(b) TXUN must pay the Alliance Service Provider for all Direct Field Costs
and Support Costs incurred during a month that are supported by
appropriately detailed receipts and invoices.
(c) The Alliance Service Provider must:
(i) where fixed or operating assets, employees or parts and
materials are used or provided for the performance of both
the Services and work or activities that do not form part of
the Services:
(A) only seek to recover from TXUN the proportion of
those costs that reasonably reflect the
proportionate use or provision of those fixed or
operating assets, employees or parts and materials
in providing the Services; and
(B) implement all reasonably necessary measures to
justify the proportion of those costs recovered
from TXUN; and
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(ii) pass on to TXUN all discounts, allowances and refunds from
vendors which are available to the Alliance Service Provider
in respect of the Direct Field Costs and the Support Costs.
(d) Each month, TXUN must pay the Alliance Service Provider an amount
equal to one twelfth of the amount specified in the Target Cost for
that year for the Corporate Overhead Costs.
15.3 MANAGEMENT FEE
Each month until the end of 2004, TXUN must pay the Alliance Service Provider
the Management Fee calculated as follows:
(a) for the Calendar Year ending 31 December 2000, the monthly Management
Fee is $416,667; and
(b) for subsequent Calendar Years, the monthly Management Fee is
calculated in accordance with the following formula:
MFt = MFt-1 x CPIt
where
MFt is the monthly Management Fee for Calendar Year "t";
MFt-1 is the monthly Management Fee for Calendar Year "t-1"; and
CPIt is the CPI for Calendar Year "t".
15.4 NON-FINANCIAL INCENTIVE FEE
(a) Subject to clause 15.4(b), 15.4(c) 15.4(d) and 15.7, the Non-Financial
Incentive Fee is calculated in accordance with schedule 16.1
(b) At any time, a party may propose an adjustment to:
(i) the number, mix or relative weightings of the KPIs specified
in schedule 16; or
(ii) the target values of any of the KPIs specified in schedule
16,
by notice in writing to the other party which sets out:
(iii) details of the proposed adjustment;
(iv) details of the way in which the proposed adjustment will
reflect the Business Objectives; and
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(v) details of the way in which the adjustment reflects the
intention of the parties in setting the KPIs as realistic
and not unreasonably onerous standards which would be set by
a responsible gas and electricity industry operator.
(c) If a party receives a notice from the other party under clause
15.4(c), and that party is satisfied that the adjustment proposed in
the notice will better reflect the Business Objectives than the then
current arrangements for calculation of the Non-Financial Incentive
Fee, that party must agree to the proposed adjustment with effect from
the start of the next Calendar Year or such other time as the parties
agree.
(d) If the Alliance Service Provider intentionally fails to report an
event relating to the incentive scheme, KPIs or regulatory
requirements as required under clauses 16.2(b) and 16.5,TXUN may, in
its absolute discretion, either:
(i) reset the KPI for the item which the Alliance Service
Provider has failed to report to the worst possible
performance in that category; or
(ii) reduce the amount of the Non-Financial Incentive Fee
available in respect of that quarter by the amount
applicable to that KPI.
15.5 SHARE OF SAVINGS PAYMENT
Subject to clause 15.7, the Share of Savings Payment is calculated in accordance
with schedule 24.
15.6 TRANSITION COSTS
The provisions of the Business Sale Agreement apply in respect of Transition
Costs.
15.7 GAINSHARING
(a) If, at any time during the Term, a party proposes an improvement to
the performance of the Services:
(i) which is likely to promote the achievement of the Business
Objectives including an investment in:
(A) new Assets by a TXU Company; or
(B) improved methods of performing the Services;
(ii) which was not anticipated on or before the Commencement
Date; and
(iii) about which the parties agree that the Alliance Service
Provider's remuneration mechanisms set out in this clause 15
would inhibit or discourage,
the parties must consult to agree on amendments to the calculation of
the Share of Savings Payment or the Non-Financial Incentive Fee
necessary for the improvement to proceed and, accordingly, the
performance of the Business Objectives to be enhanced.
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(b) In consulting to agree on amendments to the Share of Savings Payment
or the Non-Financial Incentive Fee pursuant to clause 15.7(a), the
parties must ensure that:
(i) the division of risks and rewards between the parties will
be in accordance with that division established under this
Agreement at the Commencement Date;
(ii) the balance between financial and non-financial KPIs is
consistent with the weightings of those KPIs at the
Commencement Date; and (iii) if the improvement to the
performance of the Services which gave rise to the revisions
to the Share of Savings Payment or the Non-Financial
Incentive Fee is implemented successfully, any improvement
to financial outcomes will give rise to an equitable
incremental improvement in the return on capital employed by
each party in relation to the Services.
(c) Notwithstanding anything to the contrary in clauses 15.7(a) or
15.7(b), TXUN must not unreasonably delay or prevent the
implementation of any improvement to the performance of the Services
that the Alliance Service Provider reasonably considers is likely to
meet the criteria set out in clause 15.7(a)(i) and 15.7(a)(ii).
15.8 SECONDED EMPLOYEES/COSTS OF REDUNDANCIES
(a) If:
(i) within 8 months of the Commencement Date; and
(ii) as a necessary, genuine and reasonable result of integrating
the business and assets purchased by the Alliance Service
Provider under the Business Sale Agreement into the existing
operations of the Alliance Service Provider,
the Alliance Service Provider decides that any Employee (including any
Seconded Employee) is not necessary for the performance of the
Services, and makes that Employee redundant (and in the case of the
Seconded Employees, advises TXUN that it no longer requires the
services of the Seconded Employees), the Alliance Service Provider
must pay to that Employee (or if a TXU Company makes that person
redundant, pay to TXUN) any Redundancy Entitlement to which the
Employee is entitled.
(b) If an Employee does not agree to transfer to the Alliance Service
Provider on completion of the Business Sale Agreement, the Alliance
Service Provider must pay to TXUN any Redundancy Entitlement to which
that Employee is entitled to claim from a TXU Company.
(c) TXUN must pay the Alliance Service Provider the amount of any
Redundancy Entitlement payable by it in respect of an Employee under
clause 15.8(a), 15.8(b) or 15.8(g)(i), except in respect of an
Employee who is subsequently offered employment with any Related Body
Corporate of the Alliance Service Provider, as follows:
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(i) the principal amount of the Redundancy Entitlement must be
paid to the Alliance Service Provider by TXUN in equal
Quarterly instalments such that the amount of the Redundancy
Entitlement is fully repaid to the Alliance Service Provider
5 years after the Commencement Date; and
(ii) interest:
(A) at the Interest Rate on the amount of the
Redundancy Entitlement outstanding on the last day
of each Quarter until such time as the amount of
the Redundancy Entitlement is fully repaid to the
Alliance Service Provider: and
(B) accruing day to day on the basis of a 365 day
year.
(d) If the Relevant Termination Date occurs earlier than 5 years after the
Commencement Date, TXUN must pay the Alliance Service Provider the
outstanding amount of the costs of a Redundancy Entitlement payable by
it in respect of an Employee under clause 15.8(a), 15.8(b) or
15.8(g)(i), (except in respect of an Employee who is subsequently
offered employment with any Related Body Corporate of the Alliance
Service Provider) plus any interest accrued in accordance with clause
15.8(c) but not paid, as a lump sum payable by TXUN on the Relevant
Termination Date.
(e) The Alliance Service Provider must present an invoice for the amounts
calculated in clause 15.8(c) in respect of a Quarter within 30 days of
the end of that Quarter.
(f) If the invoice provided by the Alliance Service Provider under clause
15.8(e) complies with the requirements of clause 16.5, TXUN must pay
the amount specified in that invoice within 14 days of receiving that
invoice.
(g) If at any time during the term of this Agreement after the
Commencement Date the Alliance Service Provider decides that any
Employee ( or any Seconded Employee) is not necessary for the
performance of the Services, and wishes to make that Employee or
Seconded Employee redundant:
(i) if the Employee is employed directly and exclusively in the
performance of the Services, the Alliance Service Provider
must pay to that Employee (or, if a TXU Company makes a
Seconded Employee redundant, pay to TXUN), any Redundancy
Entitlement to which that person is entitled; and
(ii) if the Employee or Seconded Employee is not engaged directly
and exclusively in the performance of the Services, the
Alliance Service Provider must pay to that Employee any
Redundancy entitlement to which the Employee is entitled,
and must not seek to recover that amount from TXUN.
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16. BILLING AND INVOICING
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16.1 MANAGEMENT FEE
TXUN must pay the Management Fee into a bank account nominated by the Alliance
Service Provider on the 15th day of each month.
16.2 REIMBURSABLE COSTS
(a) On the first Business Day of each week, TXUN must pay into a bank
account nominated by the Alliance Service Provider an amount equal to
the aggregate of one thirteenth of the Target Costs allocated to that
Quarter, (and one thirteenth of the Anticipated Expenditure on TXUN
Initiated Capital Works and Customer Initiated Capital Works for that
Quarter which will form part of the Target Cost when they are
performed pursuant to clause 14.4).
(b) Within 10 Business Days of the end of each month, the Alliance Service
Provider must provide TXUN with an invoice for the Reimbursable Costs
for that month.
(c) If the invoice for Reimbursable Costs provided by the Alliance Service
Provider to TXUN under clause 16.2(b) in respect of a month is:
(i) greater than the sum of the amounts TXUN has paid into the
bank account nominated by the Alliance Service Provider
pursuant to clause 16.2(a) during that month, TXUN must
increase the amount it pays into the bank account nominated
by the Alliance Service Provider pursuant to clause 16.2(a)
for the following week by the amount of the difference; and
(ii) less than the sum of the amounts TXUN has paid into the bank
account nominated by the Alliance Service Provider pursuant
to clause 16.2(a) during that month, TXUN must reduce the
amount it pays into the bank account nominated by the
Alliance Service Provider pursuant to clause 16.2(a) for the
following week by the amount of the difference.
(d) The Alliance Service Provider must ensure that the Reimbursable Costs
set out in the invoice presented under clause 16.2(b) are supported by
detailed invoices which may be audited by TXUN under clause 17.
(e) The parties may, by agreement in writing, vary the way in which the
Reimbursable Costs are billed and invoiced under this Agreement, if
that variation is consistent with the principle of working capital
neutrality.
16.3 SHARE OF SAVINGS PAYMENT
(a) The Alliance Service Provider must present to TXUN an invoice for the
Share of Savings Payment in relation to a Quarter within 30 days of
the end of that Quarter.
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(b) If an invoice provided by the Alliance Service Provider under clause
16.3(a) complies with the requirements of clause 16.5, TXUN must pay
into a bank account nominated by the Alliance Service Provider within
14 days of receiving that invoice
(i) in respect of an invoice relating to a Quarter other than
the Quarter ending on the Relevant Termination Date, an
amount equal to:
(A) 75% of the amount specified in that invoice; plus
(B) 25% of the amount specified in the invoice
presented by the Alliance Service Provider under
clause 16.3(a) in the immediately preceding
Quarter; and
(ii) in respect of an invoice relating the Quarter ending on the
Relevant Termination Date, and amount equal to:
(A) the full amount specified in that invoice; plus
(B) 25% of the amount specified in the invoice
presented by the Alliance Service Provider under
clause 16.3(a) in the immediately preceding
Quarter.
(c) If, pursuant to the calculation of the Share of Savings Payment in
Schedule 16, the Alliance Service Provider must pay TXUN an amount in
respect of a Quarter, the Alliance Service Provider must provide TXUN
with a statement complying with the requirements of clause 16.5, which
sets out the amount payable to TXUN.
(d) If TXUN receives a notice under clause 16.3(c), TXUN must:
(i) deduct the amount owing to it from the Alliance Service
Provider during that Quarter from the amount specified in
the invoice presented to the Alliance Service Provider under
clause 16.3(a) in the immediately preceding Quarter which
remains unpaid by TXUN; and
(ii) pay the balance of the amount from the immediately preceding
Quarter which remains unpaid after the deduction in
accordance with clause 16.3(d)(i) into a bank account
nominated by the Alliance Service Provider, within 14 days
of receiving the statement under clause 16.3(c).
16.4 NON-FINANCIAL INCENTIVE FEE
(a) The Alliance Service Provider must present to TXUN an invoice for the
Non-Financial Incentive Fee in relation to a Quarter within 30 days of
the end of that Quarter.
(b) If the invoice provided by the Alliance Service Provider under clause
16.4(a) complies with the requirements of clause 16.5, TXUN must pay
the amount specified in the invoice into a bank account nominated by
the Alliance Service Provider within 14 days of receiving the invoice.
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16.5 FORM OF INVOICES
The Alliance Service Provider must ensure that each invoice presented to TXUN:
(a) specifies the period to which the invoice relates;
(b) if for the Share of Savings Payment or the Non-Financial Incentive
Fee, includes the Alliance Service Provider's calculations of the
relevant amount to show the Alliance Service Provider's entitlement to
that Share of Savings Payment or Non-Financial Incentive Fee;
(c) complies with TXUN's reasonable administrative requirements for
recording of costs, including by stating as separate line item the
expenditure on each project for which a cost estimate was required
from the Alliance Service Provider by TXUN pursuant to clauses 4.3(b),
4.3(d), 4.4(b) or 4.4(d), or which was awarded to the Alliance Service
Provider as a result of a competitive tender process run by TXUN or
its nominee.
(d) is accompanied by an operational report in a format reasonably agreed
between the parties containing:
(i) the information possessed by the Alliance Service Provider
and required of TXUN or its Related Bodies Corporate by the
Office of the Regulator-General and other Government
Agencies; and
(ii) the other Reporting Requirements agreed between the parties.
16.6 ADJUSTMENTS AND CORRECTIONS TO INVOICES
(a) At TXUN's reasonable request within the time period in which an
invoice is required to be kept under clause 17.3(a), the Alliance
Service Provider must provide TXUN any additional explanation or
substantiation of that invoice.
(b) Either party may propose an adjustment or correction to an invoice by
giving notice in writing to the other party.
(c) A party must not propose an adjustment or correction to an invoice
under clause 16.6(b) after 12 months from the date the invoice was
presented by the Alliance Service Provider to TXUN.
(d) If a party proposes an adjustment or correction to an invoice under
clause 16.6(b), and the other party does not agree to the proposed
adjustment or correction, either party may refer the matter to be
resolved in accordance with the Dispute Resolution Procedure.
(e) If:
(i) a party proposes an adjustment or correction to an invoice
under clause 16.6(b);
(ii) TXUN has already paid that invoice; and
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(iii) the parties agree, or the dispute between the parties is
resolved such that an adjustment should be made to that
invoice,
an adjustment for the relevant amount will be made in the next invoice
presented to TXUN by the Alliance Service Provider.
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17. AUDITS AND ACCESS TO RECORDS
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17.1 ACCOUNTING AUDIT
(a) A party must maintain an open book policy in respect of its Accounts,
so as to promote the Business Objectives and the ongoing alliance
relationship between the parties.
(b) The Alliance Service Provider must:
(i) maintain separate Accounts in accordance with Accounting
Standards;
(ii) provide TXUN with a statement of its unaudited Accounts
within 30 days of the last day of each Quarter; and
(iii) provide to TXUN, after the close of each Calendar Year:
(A) a statement of Accounts, audited by a registered
company auditor;
(B) a narrative report summarising the Services
provided under this Agreement during that Calendar
Year; and
(C) such other information as the Alliance Board
specifies must be provided.
(c) At TXUN's request, the Alliance Service Provider must provide TXUN
with a special audit by an independent auditor on:
(i) the Alliance Service Providers' Accounts; or
(ii) the Accounts of any Subcontractor.
TXUN must pay for a special audit requested by it under clause 17.1(c) unless
that audit shows a discrepancy in a line item in the Accounts an amount that
would be characterised as "material" under the relevant Accounting Standard.
(d) The Alliance Service Provider must pay for a special audit requested
by TXUN under clause 17.1(c) if that audit shows a discrepancy in a
line item in the Accounts equal to or more than an amount that would
be characterised as "material" under the relevant Accounting Standard.
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17.2 OPERATIONAL AUDITS
(a) The Alliance Service Provider must conduct regular audits of its
performance of the Services, at such intervals as determined by the
Operating Management Team, to determine whether it is performing the
Services in accordance with this Agreement, including audits of:
(i) emergency response management;
(ii) KPIs;
(iii) risk management;
(iv) information technology interface systems;
(v) financial data;
(vi) reporting procedures;
(vii) technical compliance;
(viii) work quality compliance;
(ix) labour skill competencies; and
(x) as otherwise specified by the Operating Management Team.
(b) The Alliance Service Provider must conduct, or permit TXUN to conduct,
regular audits, at such intervals as determined by the Operating
Management Team, of the controls associated with the business
processes and systems necessary to support the achievement of the
terms of this Agreement.
17.3 ACCESS TO RECORDS
(a) The Alliance Service Provider must keep and safely store:
(i) the Alliance Service Provider's reports to TXUN; maps,
drawings and specifications; bills of quantities;
calculations and other documents; Manuals; procedures;
registers and records then in its control relating to the
Electricity Distribution Network and Gas Distribution
System;
(ii) records concerning the quality assurance strategies adopted
by the Alliance Service Provider pursuant to its obligation
in clause 4.5(c)(xi);
(iii) the records referred to in clauses 17.1 and 17.2;
(iv) all invoices and records in connection with the Reimbursable
Costs; and
(v) any other materials or records of a financial or operational
nature relating to the provision of the Services or to this
Agreement which:
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(A) are required by the TXU Companies to comply with
their Reporting Requirements; and
(B) TXUN notifies the Alliance Service Provider are
required by the TXU Companies to comply with their
Reporting Requirements,
for the longer of:
(vi) the minimum period required by Law;
(vii) 2 years; and
(viii) the period until any Dispute to which those materials are
relevant is settled.
(b) The Alliance Service Provider must grant TXUN, its agents and
employees, the ORG and any other Government Agency, a right of access
to, and the right to make copies of:
(i) the Alliance Service Provider's reports to TXUN; maps,
drawings and specifications; bills of quantities;
calculations and other documents; Manuals; procedures;
registers and records then in its control relating to the
Electricity Distribution Network and Gas Distribution
System;
(ii) records concerning the quality assurance strategies adopted
by the Alliance Service Provider pursuant to its obligation
in clause 4.5(c)(xi);
(iii) the records referred to in clauses 17.1 and 17.2;
(iv) all invoices and records in connection with the Reimbursable
Costs; and
(v) any other materials or records of a financial or operational
nature relating to the provision of the Services or to this
Agreement which:
(A) are required by the TXU Companies to comply with
their Reporting Requirements; and which
(B) TXUN notifies the Alliance Service Provider are
required by the TXU Companies to comply with their
Reporting Requirements,
at all reasonable times on reasonable notice.
(c) In granting the right of access under clause 17.3(b), the Alliance
Service Provider must provide all reasonable assistance to TXUN, its
agents and employees, the ORG and any other Government Agency,
including, but not limited to:
(i) procuring:
(A) access to records relating to the Services held by
Subcontractors; and
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(B) the reasonable assistance of Subcontractors,
pursuant to the contractual rights specified in clause 8.2;
and
(ii) making available adequate copying facilities.
(d) TXUN may appoint a firm agreed to by the Alliance Service Provider to
conduct an audit of the information provided to TXUN by the Alliance
Service Provider or the Subcontractors under clause 17.3(b).
(e) TXUN must pay for an audit performed under clause 17.3(d), unless the
audit shows a discrepancy in the information provided to TXUN by the
Alliance Service Provider under clause 17.3(b) equal to or more than
an amount that would be characterised as "material" under the relevant
Accounting Standard.
(f) The Alliance Service Provider must pay for an audit performed under
clause 17.3(d) if the audit shows a discrepancy in the information
provided to TXUN by the Alliance Service Provider under clause 17.3(b)
equal to or more than an amount that would be characterised as
"material" under the relevant Accounting Standard.
(g) In exercising its rights pursuant to clause 17.3 from time to time,
TXUN, its agents and employees must act in good faith and must not
unduly disrupt or distract the employees or agents of the Alliance
Service Provider or the Subcontractors from the performance of their
work.
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18. FORCE MAJEURE
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18.1 CONSEQUENCES OF FORCE MAJEURE
If a party does not perform any obligation or condition required by this
Agreement to be performed by it, the failure to perform that obligation or
condition:
(a) will be excused to the extent that the performance of that obligation
is prevented, wholly or in part, by Force Majeure;
(b) will not, to the extent that the performance is prevented, wholly or
in part, by Force Majeure, give rise to any liability to the other
party for any direct, indirect, consequential or special losses or
damages of any kind arising out of, or in any way connected with that
failure to perform; and
(c) will result in a reasonable adjustment to the Target Cost and the KPIs
for that Calendar Year determined by the Operating Management Team as
soon as practicable following the occurrence of the Force Majeure
event.
18.2 NOTIFICATION AND DILIGENCE
A party which is, by reason of Force Majeure, unable to perform any obligation
or condition required by this Agreement must:
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(a) notify the other party as soon as possible giving:
(i) reasonably full particulars of the event or circumstance of
Force Majeure;
(ii) the date of commencement of the event or circumstance of
Force Majeure and an estimate of the period of time required
to enable it to resume full performance of its obligations;
and
(iii) where possible, the means proposed to be adopted to remedy
or abate the Force Majeure, which must be in accordance with
the Emergency Management Plan, where relevant;
(b) use all reasonable diligence and employ all reasonable means to remedy
or abate the Force Majeure as soon as possible;
(c) resume performance as soon as possible after termination of the Force
Majeure or after the Force Majeure has abated to an extent which
permits resumption of performance;
(d) notify the other party when the Force Majeure has terminated or abated
to an extent which permits resumption of performance to occur; and
(e) notify the other party when resumption of performance has occurred.
18.3 LIABILITY NOT RELIEVED
(a) Despite Force Majeure affecting the performance of a party's
obligations under this Agreement, a party is not relieved of
liability:
(i) to the extent that its negligence caused or contributed to
its failure to perform under this Agreement; and
(ii) for its failure to use all reasonable endeavours to remedy
the situation and to remove the event or circumstances
giving rise to the Force Majeure in an adequate manner with
all reasonable dispatch.
(b) A party must pay amounts due in respect of obligations under this
Agreement which have been performed prior to the occurrence of a Force
Majeure, even it that Force Majeure affects the continued performance
of those obligations.
18.4 PROLONGED FORCE MAJEURE
(a) If:
(i) a party has invoked the provisions of this clause 18 due to
a Force Majeure affecting the performance of an obligation
or condition of this Agreement by that party; and
(ii) that same event of Force Majeure prevents or inhibits the
performance of any obligation or condition of this Agreement
by that party for a continuous period of 6 months or longer,
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the parties must consult in good faith to decide what action should be
taken to carry out the intentions of this Agreement.
(b) If:
(i) the Force Majeure referred to in clause 18.4(a) has
prevented or inhibited the performance of any such
obligation or condition relating to the Gas Distribution
System or Electricity Distribution Network for 6 months or
longer; and
(ii) the parties are unable to agree that the Force Majeure can
reasonably be resolved,
either party may terminate this Agreement.
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19. EMERGENCIES
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19.1 COOPERATION WITH GOVERNMENT AGENCIES
In an Emergency, the Alliance Service Provider must cooperate with all
directions of lawful authorities, including:
(a) VENCorp;
(b) the OCEI;
(c) the OGS;
(d) the Minister or delegate of the Minister having responsibility for the
Electricity Industry Act 1993 (Vic);
(e) the Minister or delegate of the Minister having responsibility for the
Gas Industry Act 1994 (Vic);
(f) the ORG;
(g) the Workcover Authority; and
(h) any other Government Agencies.
19.2 TXUN MAY TAKE CONTROL
(a) If:
(i) an Emergency has occurred; and
(ii) TXUN notifies the Alliance Service Provider that an
Emergency has occurred,
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the Alliance Service Provider must allow TXUN (or a nominee of TXUN)
to take control of the Services, and the resources of the Alliance
Service Provider for the duration of the Emergency.
(b) If TXUN takes control of the Services or the resources of the Alliance
Service Provider under clause 19.2(a), TXUN must indemnify the
Alliance Service Provider in respect of any loss or damage suffered or
incurred by the Alliance Service Provider as a consequence of the acts
and omissions of TXUN in the exercise of such control.
19.3 EMERGENCY MANAGEMENT PLAN
(a) The Alliance Service Provider must prepare an Emergency Management
Plan which complies with the requirements of Westar's Safety Case
submitted to the OGS in accordance with the provisions of the Gas
Safety Act 1997 and includes methods for the availability of labour,
plant and equipment during Emergencies.
(b) The Alliance Service Provider must maintain and keep current the
Emergency Management Plan referred to in clause 19.3(a).
(c) The Alliance Service Provider must ensure the ability of the Alliance
Service Provider to act in accordance with the Emergency Management
Plan prepared and maintained under clauses 19.3(a) and 19.3(b) during
an Emergency, by conducting appropriate audits and tests.
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20. SAFETY
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20.1 ALLIANCE SERVICE PROVIDER RESPONSIBLE FOR SAFETY
The Alliance Service Provider must:
(a) take and enforce all necessary or desirable measures to ensure safety
in respect of persons, property and stock whilst performing the
Services;
(b) be solely responsible and liable for any injury to or death of persons
or stock, or damage to property, arising from its actions, neglect or
omissions;
(c) obtain and maintain Advanced Level SafetyMAP certification; and
(d) comply with all of the reasonable safety policies of TXUN notified to
the Alliance Service Provider from time to time.
20.2 OCCUPATIONAL HEALTH AND SAFETY ACT 1985
(a) The Alliance Service Provider must perform the Services with due
regard for adequate safety and shall comply with all applicable safety
laws and regulations, including the documented work practices and
procedures notified to the Alliance Service Provider by TXUN.
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(b) When the Alliance Service Provider is likely to perform any of the
Services in proximity to gas or live electrical apparatus, the
Alliance Service Provider must not commence to perform those Services
until TXUN's Project Manager has issued the Alliance Service Provider
with the appropriate authority form, unless the Alliance Service
Provider is appropriately authorised by the OGS or OCEI or in
accordance with other relevant regulations.
(c) The Alliance Service Provider must ensure that its employees and
Subcontractors required to work on or in the vicinity of established
power lines or gas or electrical plant and equipment, possess the
necessary and appropriate experience, training, including refresher
training, and authorisation for such work.
(d) The Alliance Service Provider must ensure that all employees
performing work in the field who are likely to work within two metres
of exposed electrical apparatus are annually trained in first aid to a
level which provides for skills in basic life support and first aid
techniques, including cardio-pulmanory resuscitation techniques.
(e) The Alliance Service Provider's employees working on, or in the
vicinity of, gas or electrical apparatus and its mobile plant and
equipment must comply with the requirements of the OGS and the OCEI,
together with other relevant documented practices and procedures, and
the Alliance Service Provider must ensure strict adherence at all
levels to those requirements in the performance of the Services.
20.3 FIRE BANS
(a) The Alliance Service Provider must observe all bans and restrictions
in respect of the lighting of fires during officially proclaimed fire
restriction periods and on days of total fire ban as declared by the
Victorian Country Fire Authority or other Government Agency.
(b) The Alliance Service Provider must ensure that the Bushfire Mitigation
Index is zero at all times during each Bushfire Season.
20.4 DIRECTIONS REGARDING SAFETY
The Alliance Service Provider must strictly observe and comply with all
directions given by TXUN's Project Manager intended to avoid danger to persons
or property.
20.5 PROTECTIVE CLOTHING
(a) The Alliance Service Provider must ensure that its employees and
Subcontractors' employees possess the appropriate protective clothing
and appliances, equivalent to the standards notified to the Alliance
Service Provider by TXUN, including:
(i) safety headgear;
(ii) insulated sole safety boots;
(iii) suitable eye protection equipment;
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(iv) work gloves; and
(v) approved overalls, three piece work suit or equivalent.
(b) The Alliance Service Provider must ensure that the items specified in
clause 20.5(a) are worn at all appropriate times by its employees and
Subcontractors' employees when performing the Services.
(c) The Alliance Service Provider must ensure that when its employees and
Subcontractors' employees are working from the bucket of an elevated
platform vehicle or in proximity to electrical apparatus, those
persons wear complete body clothing covering the body from waist to
ankle and made from cotton or other flash-resistant material approved
by TXUN.
(d) The Alliance Service Provider must ensure that when its employees and
Subcontractors' employees are working on public thoroughfares, they
wear, in addition to all other necessary garments, a safety vest with
reflective striping or high visibility overalls, as approved by TXUN.
(e) The Alliance Service Provider must take responsibility for the
protective clothing specified in this clause 20.5 and must replace
such clothing as often as is consistent with the requirements of Good
Practice.
20.6 INCIDENT REPORTING AND INVESTIGATION
(a) The Alliance Service Provider must ensure that:
(i) an incident report is completed and provided to TXU in
respect of all safety incidents occurring in the performance
of the Services or at the Work Sites; and
(ii) all safety incidents occurring in the performance of the
Services or at the Work Site are investigated by the
Alliance Service Provider.
(b) If, on receipt of an incident report under clause 20.6(a), TXU
considers that a safety incident is a serious incident, the Alliance
Service Provider must allow TXU to be involved in the investigation of
that incident under clause 20.6(a).
20.7 SAFETY AUDITS AND ASSESSMENTS
(a) The Alliance Service Provider must conduct regular audits of its
performance of the Services, at such intervals as determined by the
Operating Management Team, to:
(i) determine whether it is performing the Services in
accordance with this clause 20;
(ii) ensuring that any non-compliance with the requirements of
this clause 20 is documented and rectified as soon as
reasonably possible.
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(b) The Alliance Service Provider must complete and document a risk
assessment in relation to safety issues before the commencement of any
work.
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21. TERMINATION
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21.1 TERMINATION BY TXUN FOR CAUSE
This Agreement may be terminated by TXUN if one of the following events (each of
which is deemed to be a breach of this Agreement) is subsisting and has not been
waived:
(a) (LOSS OF AUTHORISATIONS): if a Government Agency:
(i) cancels; or
(ii) fails to renew upon its expiry,
any Authorisation held by the Alliance Service Provider which is
required by Law to be held by it for:
(iii) the ongoing operation of the Electricity Distribution
Network or the Gas Distribution System; or
(iv) provision of Services by the Alliance Service Provider,
and that cancellation or decision is not caused, or contributed to,
by:
(v) a TXU Company failing to fully comply with the Law or the
terms of that Authorisation; or
(vi) by the negligence or fraud of a TXU Company;
(b) (INSOLVENCY): if an Insolvency Event occurs in relation to the
Alliance Service Provider;
(c) (BREACH OF CLAUSE 4.5): if the Alliance Service Provider materially
breaches its obligation to perform the Services in accordance with
clause 4.5 (except where there is a bona fide Dispute between the
parties as to whether the Alliance Service Provider has breached
clause 4.5, which has been referred by a party to be dealt with in
accordance with the Dispute Resolution Procedure), and:
(i) if that breach is capable of remedy by the Alliance Service
Provider within 180 days after receipt by it of a notice
from TXUN specifying that breach and requiring it to be
remedied, the Alliance Service Provider fails to remedy that
breach within a reasonable time after receiving such a
notice; or
(ii) if that breach is capable of remedy by the Alliance Service
Provider, but not capable of remedy within 180 days after
receipt by it of a notice from TXUN specifying that breach
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and requiring it to be remedied, the Alliance Service
Provider fails:
(A) within a reasonable time (not being more than 30
days) after receipt by it of a notice from TXUN
specifying that breach, to submit to TXUN a
program and timetable acceptable to TXUN (acting
reasonably); or
(B) having submitted a program and timetable in
accordance with clause 21.1(c)(ii)(A), to
diligently pursue the remedy of that breach in
accordance with that program and timetable; or
(iii) if that breach is not capable of remedy by the Alliance
Service Provider, and the Alliance Service Provider has
received a notice from TXUN specifying the amount of
compensation payable to TXUN in respect of the breach, the
Alliance Service Provider fails to pay reasonable
compensation (if any) for that breach within:
(A) if the amount of compensation notified by TXUN is
not disputed by the Alliance Service Provider in
writing within 10 Business Days of receipt by it
of the notice from TXUN, 30 days; or
(B) if that amount is disputed by the Alliance Service
Provider in writing within 10 Business Days of
receipt by it of the notice from TXUN, 30 days
after receipt by it of notice of the amount of
compensation for that breach determined in
accordance with the Dispute Resolution Procedure;
(d) (BREACH OF CLAUSE 13.4): if the Alliance Service Provider breaches it
obligations under clause 13.4; and:
(i) the Alliance Service Provider does not remedy such breach
within 10 Business Days of becoming aware of such breach and
within a reasonable time thereafter, obtain confirmation
from the relevant insurer that the insurance policy is not
invalidated or prejudiced as a result of the Alliance
Service Provider's breach; or
(ii) TXUN suffers any loss as a result of such breach; and
(e) (BREACH OF MINIMUM SERVICE STANDARDS): if the Alliance Service
Provider:
(i) takes any action, or omits to take any action reasonably
required of it in relation to its obligations under this
Agreement, which infringes any of the Minimum Service
Standards; and
(ii) does not, after consultation with TXUN, remedy the action or
omission within a reasonable time unless otherwise agreed by
TXUN in writing.
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21.2 TERMINATION BY THE ALLIANCE SERVICE PROVIDER FOR FAILURE TO PAY
This Agreement may be terminated by the Alliance Service Provider if TXUN fails
to pay an amount in excess of 1% of the expenses in the then current Target Cost
for that Quarter (and the Anticipated Expenditure on TXUN Initiated Capital
Works and Customer Initiated Capital Works for that Quarter which will form part
of the Target Cost when they are performed pursuant to clause 14.4) due and
payable by it to the Alliance Service Provider under this Agreement within 30
days of a written notice from the Alliance Service Provider to TXUN demanding
such payment (except where there is a bona fide Dispute as to the value of, or
liability for, such amounts which has been referred by a party to be dealt with
in accordance with the Dispute Resolution Procedure).
21.3 TERMINATION FOR PROLONGED FORCE MAJEURE
Either party may terminate this Agreement in the circumstances described in
clause 18.4.
21.4 TERMINATION PROCESS
(a) A party may terminate this Agreement for any of the events specified
in this clause 21 by notice to the other party specifying the event
which the party giving the notice asserts entitles it to terminate
this Agreement and specifying as the Relevant Termination Date:
(i) in the case of termination by TXUN under clause 21.1, a date
not earlier than 12 months after the date on which that
notice is received by the Alliance Service Provider, or as
otherwise agreed between the parties;
(ii) in the case of termination by the Alliance Service Provider
under clause 21.2, a date not earlier than 12 months after
the date on which that notice is received by TXUN, or as
otherwise agreed between the parties;
(iii) in the case of termination by either party in accordance
with clause 21.3, a date not earlier than 6 months after the
date on which that notice is received by TXUN, or as
otherwise agreed between the parties.
(b) The Alliance Service Provider may immediately terminate this Agreement
by notice in writing at any time during the 12 months referred to in
clause 21.4(a)(ii), if TXUN is not remunerating it for the Services
during that period in accordance with this Agreement.
21.5 TXUN MAY TAKE CONTROL
(a) Despite clause 21.4(a), if:
(i) TXUN has a right to terminate this Agreement under clause
21.1; and
(ii) TXUN gives notice to the Alliance Service Provider under
clause 21.4,
from the time of that notice until the Relevant Termination Date, the
Alliance Service Provider must allow TXUN (or a nominee of TXUN) to
perform the Services or any part of the Services nominated by TXUN.
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(b) If TXUN (or a nominee of TXUN) elects to perform the Services or any
part of the Services under clause 21.5(a), the Alliance Service
Provider must provide all assistance as is necessary or desirable in
order for TXUN (or a nominee of TXUN) to perform the Services or part
of the Services including without limitation:
(i) complying with directions given by TXUN or its nominee to
the Alliance Service Provider;
(ii) making any Employee available to TXUN or its nominee;
(iii) giving TXUN or its nominee access to assets, equipment,
stock and material owned by the Alliance Service Provider
which are:
(A) being used, or kept available, substantially for
the performance by the Alliance Service Provider
of the Services immediately before the Relevant
Termination Date; and
(B) in the reasonable opinion of TXUN or its nominee,
are reasonably necessary for the performance of
the Services;
(iv) giving TXUN or its nominee access to all data, documents,
records, Maps, diagrams, designs and Manuals then in its
possession or in its control relating to the performance of
this Agreement.
(c) If TXUN or its nominee performs the Services or part of the Services
under clause 21.5(a), TXUN must reimburse the Alliance Service
Provider:
(i) the reasonable costs of the Alliance Service Provider in
providing assistance to TXUN or its nominee pursuant to its
obligations in clause 21.5(a); less
(ii) the amount (if any) by which the cost to TXUN of undertaking
the Services or part of the Services itself or by its
nominee under clause 21.5(a) exceeds the Reimbursable Costs
that TXUN would have paid the Alliance Service Provider
under this Agreement if:
(A) the Alliance Service Provider had complied with
its obligations under this Agreement; and
(B) TXUN did not exercise its right of termination
under clause 21.1.
(d) For the avoidance of doubt, if TXUN or its nominee perform part of the
Services under clause 21.5(a), to the extent that the Alliance Service
Provider continues to perform part of the Services until the Relevant
Termination Date, the Alliance Service Provider will be properly
remunerated by TXUN in respect of those Services in accordance with
this Agreement.
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22. CONSEQUENCES OF TERMINATION
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22.1 ACTIONS UPON TERMINATION
Upon termination of this Agreement, either pursuant to clause 2 or clause 21,
without prejudice to any rights of the parties under this Agreement:
(a) (TERMINATE IN ORDERLY MANNER): a party must bring to an end the
performance of its obligations under this Agreement on the Relevant
Termination Date in an orderly manner;
(b) (HAND OVER RECORDS): on or prior to the Relevant Termination Date, the
Alliance Service Provider must cause to be delivered to TXUN,
originals of all data, documents, records, Maps, diagrams, designs and
Manuals then in its possession or in its control relating to the
performance of this Agreement;
(c) (ASSIGN OR NOVATE CONTRACTS AND LICENCES): on or prior to the Relevant
Termination Date the Alliance Service Provider must:
(i) use its best endeavours to ensure that the benefit of all
contracts and licences (capable of being assigned or novated
to TXUN or its nominee) entered into between the Alliance
Service Provider and any third party for or incidental to
the performance by the Alliance Service Provider of its
obligations under this Agreement (including contracts and
licences granting intellectual property rights) are, at the
direction of TXUN, assigned or novated to TXUN or a party
nominated by TXUN; and
(ii) where requested by TXUN, enter into a subcontract with TXUN
granting TXUN the benefit or part of the benefit, to the
extent that TXUN was receiving that benefit prior to the
Relevant Termination Date, of any contracts entered into
between the Alliance Service Provider and any third party
for or incidental to the performance by the Alliance Service
Provider of its obligations under this Agreement (including
contracts and licences granting intellectual property
rights), such subcontracts to be proportionately on the same
terms and conditions as the head contracts;
(d) (TRANSFER OF ASSETS, EQUIPMENT, STOCK AND MATERIAL WHERE TERMINATION
DUE TO ALLIANCE SERVICE PROVIDER'S DEFAULT): in the case of
termination under clause 21.1, on or prior to the Relevant Termination
Date the Alliance Service Provider must, at TXUN's written request,
offer to sell to TXUN or a party nominated by TXUN, and if so TXUN
must purchase, or must procure that its nominee purchases, at book
value (being the purchase price of the asset, equipment, stock or
material less the accumulated depreciation of that asset, equipment,
stock or material) such of the assets, equipment, stock and material
owned by the Alliance Service Provider which are:
(i) being used, or kept available, substantially for the
performance by the Alliance Service Provider of the Services
immediately before the Relevant Termination Date; and
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(ii) in the reasonable opinion of TXUN, are reasonably necessary
for the performance of the Services;
(e) (TRANSFER OF ASSETS, EQUIPMENT, STOCK AND MATERIAL WHERE TERMINATION
IS NOT DUE TO ALLIANCE SERVICE PROVIDER'S DEFAULT): except in the case
of termination under clause 21.1, on or prior to the Relevant
Termination Date the Alliance Service Provider must, at TXUN's written
request, offer to sell to TXUN or a party nominated by TXUN, and if so
TXUN must purchase, or must procure that its nominee purchases, at
book value (being the purchase price of the asset, equipment, stock or
material less the accumulated depreciation of that asset, equipment,
stock or material) such of the assets, equipment, stock and material
owned by the Alliance Service Provider which:
(i) have been used, or kept available over the 12 months before
the Relevant Termination Date, 100% for the performance of
the Services by the Alliance Service Provider; and
(ii) in the reasonable opinion of TXUN, are reasonably necessary
for the performance of the Services;
(f) (TRANSFER OF EMPLOYEES WHERE TERMINATION NOT DUE TO TXUN'S DEFAULT):
except in the case of termination under clause 21.2, on or prior to
the Relevant Termination Date, TXUN or a party nominated by TXUN must
offer to employ and, on the acceptance of that offer by each employee,
the Alliance Service Provider must accept the resignation of such of
the employees employed by the Alliance Service Provider who are:
(i) being used, or kept available, substantially for the
performance by the Alliance Service Provider of the Services
immediately before the Relevant Termination Date; and
(ii) in the reasonable opinion of TXUN, reasonably necessary for
the servicing and administration of the Electricity
Distribution Network and the Gas Distribution System in
accordance with Minimum Service Standards,
and, for the avoidance of doubt, this transfer of employees will be
treated in the same way as a transfer of employees is ordinarily
treated in the sale of a business;
(g) (TRANSFER OF EMPLOYEES WHERE TERMINATION DUE TO TXUN'S DEFAULT): in
the case of termination under clause 21.2, on or prior to the Relevant
Termination Date, TXUN or a party nominated by TXUN must offer to
employ and, on the acceptance of that offer by each employee, the
Alliance Service Provider must accept the resignation of such of the
employees employed by the Alliance Service Provider who:
(i) have been used, or kept available over the 12 months before
the Relevant Termination Date, 100% for the performance of
the Services by the Alliance Service Provider; and
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(ii) in the reasonable opinion of TXUN, reasonably necessary for
the servicing and administration of the Electricity
Distribution Network and the Gas Distribution System in
accordance with Minimum Service Standards
and, for the avoidance of doubt, this transfer of employees will be
treated in the same way as a transfer of employees is ordinarily
treated in the sale of a business;
(h) (ALLIANCE SERVICE PROVIDER'S FEES AND REASONABLE DEMOBILISATION
COSTS): on the Relevant Termination Date, TXUN without limitation must
pay to the Alliance Service Provider:
(i) any Reimbursable Costs or fees in respect of Services
performed up to the Relevant Termination Date which may
become due to the Alliance Service Provider under this
Agreement; and
(ii) the costs of the Alliance Service Provider's removal from
the sites on which the Services are performed, including the
removal of all temporary buildings, equipment and plant,
tools, materials and goods.
22.2 NON-SOLICITATION OF EMPLOYEES
After the Relevant Termination Date, the Alliance Service Provider must not, for
a period of 2 years, without the prior written consent of TXUN, solicit, or
attempt to solicit, any employee:
(a) to whom TXUN has made an offer of employment pursuant to clause
22.1(f); and
(b) who has:
(i) accepted; or
(ii) not yet rejected,
the offer of employment from TXUN.
22.3 TRANSITIONAL ASSISTANCE
(a) During the period from 12 months prior to the Relevant Termination
Date or, in the case of termination under clause 21, the date of the
notice given in accordance with clause 21.4 until the Relevant
Termination Date, the Alliance Service Provider must:
(i) allow, and procure that its Subcontractors allow, employees
or nominees of TXUN to closely observe the provisions of the
Services by the Alliance Service Provider or Subcontractors;
(ii) allow, and procure that its Subcontractors allow, employees
or nominees of TXUN to shadow particular employees of the
Alliance Service Provider or the Subcontractors who are
engaged in the provision of the Services to TXUN;
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(iii) procure, and procure that its Subcontractors procure, that
each employee of the Alliance Service Provider or its
Subcontractors who are engaged in the provision of the
Services to TXUN use their best endeavours to answer any
queries the employees or nominees of TXUN may raise in
relation to the provision of the Services; and
(iv) not, without the prior written approval of TXUN, enter into
any contract in accordance with clause 8.1, the term of
which is likely to extend beyond the Termination Date.
(b) In complying with its obligations under this clause 22.3, the Alliance
Service Provider must, and must procure that the Subcontractors will,
cooperate fully with TXUN and any nominee of TXUN in the hand-over of
the provision of the Services to TXUN or the nominee of TXUN, so as to
facilitate, as much as practicable, an efficient, timely and
uninterrupted process by which the provision of those Services is
handed over.
22.4 SURVIVAL OF RIGHTS ON TERMINATION
Termination of this Agreement is without prejudice to any other rights or
obligations which may have accrued under this Agreement on or before
termination, including in respect of an antecedent breach.
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23. SUSPENSION
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23.1 SUSPENSION FOR CAUSE
(a) If TXUN reasonably considers that the Alliance Service Provider is not
performing the Services:
(i) safely;
(ii) in accordance with the Minimum Service Standards; or
(iii) in accordance with this Agreement,
TXUN may, by written notice to the Alliance Service Provider, require
the Alliance Service Provider to stop carrying out the Services or a
part of the Services.
(b) If TXUN requires the Alliance Service Provider to stop carrying out
the Services or a part of the Services under clause 23.1(a), TXUN must
specify to the Alliance Service Provider the steps that must be taken
by the Alliance Service Provider to perform the Services to TXUN's
reasonable satisfaction.
(c) After the Alliance Service Provider has received notification from
TXUN of the steps it must take to perform the Services to TXUN's
reasonable satisfaction:
(i) if the Alliance Services Provider promptly takes steps to
perform the Services to the reasonable satisfaction of TXUN,
TXUN must authorise resumption of the Services; or
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(ii) if the Alliance Service Provider does not promptly take
steps to perform the Services to the reasonable satisfaction
of TXUN, TXUN may, acting reasonably:
(A) withhold any payment that may be due to the
Alliance Service Provider by TXUN until such time
as the Alliance Service Provider demonstrates its
willingness and ability to complete the Services
in accordance with this Agreement to TXUN's
satisfaction (which must not be unreasonable); and
(B) until TXUN is satisfied under clause
23.1(c)(ii)(A), TXUN may appoint another person to
complete the Services on the conditions set out in
clause 23.1(d).
(d) TXUN may only appoint another person to complete the Services under
clause 23.1(c)(ii)(B) if:
(i) the appointment of that person will not prejudice the
Alliance Service Provider's ability to:
(A) convince TXUN under clause 23.1(c)(ii)(A) that it
is willing and able to complete the Services; or
(B) resume the Services when TXUN is satisfied under
clause 23.1(c)(ii)(A) that the Alliance Service
Provider is willing and able to complete the
Services;
(ii) TXUN ensures that the person appointed by TXUN to perform
those Services conforms to the prevailing work site
practices and procedures which apply to the Alliance Service
Provider, including industrial relations procedures; and
(iii) TXUN ensures that the person appointed by TXUN to perform
those Services does not impede or delay the Alliance Service
Provider in the performance of any part of the Services
which have not been suspended
(e) If the performance of a Service by the Alliance Service Provider is
suspended in accordance with this clause 23.1, and this suspension
significantly increases the time required for the performance of that
Service, the Alliance Service Provider may apply for an alteration
under clause 12.
23.2 SUSPENSION FOR CONVENIENCE
(a) TXUN may, by written notice to the Alliance Service Provider, require
the Alliance Service Provider to stop carrying out the Services or a
part of the Services.
(b) If the Alliance Service Provider receives notice under clause 23.2,
the Alliance Service provider must, unless the notice requires
otherwise:
(i) immediately stop performances of the Services on the date
and to the extent specified in the notice;
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(ii) place no further orders for material, services or facilities
in relation to the Services it has stopped performing;
(iii) enter into no further contracts with Subcontractors or
equipment lessors in relation to the Services it has stopped
performing;
(iv) promptly make every reasonable effort to suspend, on terms
satisfactory to TXUN, all orders, subcontracts and equipment
lease agreements to the extent they related to the Services
it has stopped performing; and
(v) take any other reasonable step to minimise the costs
associated with its ceasing to perform the Services.
(c) If the Alliance Service Provider complies with clause 23.2(b), TXUN
must reimburse the Alliance Service Provider for all costs or
liabilities reasonably incurred by the Alliance Service Provider, to
the extent that these costs or liabilities directly result from the
Alliance Service Provider complying with its obligations under clause
23.2(b).
(d) If the performance of a Service by the Alliance Service Provider is
suspended in accordance with this clause 23.2, and the suspension
significantly increases the time required for the performance of that
Service, the Alliance Service Provider may apply for an alteration
under clause 12.
23.3 RESUMPTION OF PERFORMANCE OF THE SERVICES
If, after directing the Alliance Service Provider to stop performing the
Services, or part of the Services, under clause 23.1 or 23.2, TXUN directs the
Alliance Service Provider to resume performance of the Services, the Alliance
Service Provider must:
(a) resume the performance of the Services as soon as reasonably possible;
and
(b) if it wishes to make a claim for an alteration pursuant to clause
23.1(e) or 23.2(d), submit to TXUN a written statement setting out the
details of that claim within 7 days of receiving the direction from
TXUN to resume the performance of the Services.
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24. WARRANTY OF MATERIALS
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Where in or towards the performance of the Services under this Agreement the
Alliance Service Provider, or any Subcontractor, supplies any materials which
are defective or not in accordance with competent workmanship or fitness for
purpose, the Alliance Service Provider must, at no cost to TXUN:
(a) promptly replace the materials or supply equivalent materials; or
(b) promptly repair those materials.
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25. REPRESENTATIONS AND WARRANTIES
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25.1 PARTIES' REPRESENTATIONS AND WARRANTIES
Each party represents and warrants to the other that as at the date of this
Agreement:
(a) all actions, conditions and things required to be taken, fulfilled and
done by it in order to enable it to enter into, exercise its rights
and perform and comply with its obligations under this Agreement have
been done; and
(b) all Authorisations required for its entry into, exercise of its rights
under, and performance and compliance with its obligations under this
Agreement have been obtained.
25.2 YEAR 2000 WARRANTY
(a) The Alliance Service Provider warrants that:
(i) its supply of Services to TXUN under this Agreement will not
be delayed, interrupted, restricted or prevented by:
(A) any production or administrative equipment
including equipment containing embedded computer
systems, programs, computer systems, records or
any other services or goods related to the supply
of the Services, other than such equipment, goods
or services acquired from a TXU Company; or
(B) the Alliance Service Provider's business, other
than that part of its business acquired from a TXU
Company,
not being Year 2000 compliant.
(ii) it has otherwise taken all steps necessary, and caused its
third party suppliers and Subcontractors and other third
parties on whom its business depends or is reliant (other
than those Subcontractors and third parties who were
suppliers of a business acquired by the Alliance Service
Provider from a TXU Company) to take all steps necessary in
relation to achieving Year 2000 Compliance, for the Alliance
Service Provider to promptly perform its obligations under
this Agreement.
(b) The Alliance Service Provider acknowledges that it will be fully
accountable to TXUN for, and indemnify TXUN against, any damage, loss,
liability or expense (including legal fees on a solicitor and own
client cost basis) that TXUN may incur as a result of a breach of the
warranty in clause 25.2(a).
(c) If the Alliance Service Provider is unable to perform its obligations
in clause 25.2(a), it must immediately notify TXUN in writing and give
TXUN the first priority in rectifying the Alliance Service Provider's
business, operations, goods, services, equipment and systems in order
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to provide the Services to TXUN in accordance with this Agreement as
soon as possible.
(d) Without limiting the other rights and remedies of TXUN, if the
Alliance Service Provider is unable to maintain Year 2000 Compliance
to TXUN's reasonable satisfaction within 7 days of a written notice
from TXUN, TXUN may correct such deficiency at the cost of the
Alliance Services Provider, directly or through another party, and
this cost must not be:
(i) included in the Reimbursable Costs; or
(ii) otherwise recovered by the Alliance Service Provider from
TXUN.
25.3 BUSINESS ETHIC
(a) The Alliance Service Provider warrants that neither it nor any person
or entity associated with it has, or during the term of this Agreement
will:
(i) provide or offer any compensation or benefit of any kind,
including any gift or gratuity, other than:
(A) advertising mementos of nominal value; or
(B) reasonable business meals and business
entertainment,
to any employee of TXUN; or
(ii) maintain or establish any undisclosed business affiliation
that could constitute or give the appearance of a conflict
of interest to TXUN.
(b) If, during the term of this Agreement, the Alliance Service Provider
knows or becomes aware of a breach of the warranty in clause 25.3(a),
the Alliance Service Provider must:
(i) immediately notify TXUN; and
(ii) provide sufficient information for TXUN to take appropriate
or corrective actions.
(c) The Alliance Service Provider must provide all reasonable assistance
to TXUN in any investigation undertaken by TXUN into any suspected
breach of the warranty in clause 25.3(a).
(d) If requested to do so by TXUN, the Alliance Service Provider must
require its employees to give a warranty to TXUN in the form of the
ethics and non-disclosure certification attached as Schedule 23.
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26. LIMITATION ON LIABILITY
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A party will not be liable to the other party or any of its Related Bodies
Corporate in contract, tort, or on any other basis or in connection with any
other Claim, for any consequential damages of any nature relating to the
Services including:
(a) lost profits or revenue;
(b) loss of customer goodwill;
(c) business interruption costs;
(d) overhead costs;
(e) lost profits;
(f) costs of capital; or
(g) loss of use of money.
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27. INDEMNITIES AND RELEASES
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27.1 ALLIANCE SERVICE PROVIDER'S GENERAL INDEMNITY
(a) The Alliance Service Provider must indemnify and hold harmless TXUN
and its Related Bodies Corporate, officers and employees:
(i) for all damages, costs, claims, suits, liabilities,
expenses, actions or injuries suffered or incurred by TXUN
or any of its officers or employees as a consequence of any
claims against TXUN to the extent to which any such claim is
caused by or arises from:
(A) the negligence of the Alliance Service Provider in
providing the Services; or
(B) a breach by the Alliance Service Provider of its
obligations under this Agreement,
other than consequential losses; and
(ii) from any fines, penalties and similar charges which may be
imposed on TXUN by reason of the failure of the Alliance
Service Provider to comply fully with any Authorisation,
except to the extent to which failure was caused by the
negligence or default of TXUN,
except to the extent that TXUN recovers in respect of such
losses under the Insurance Policies.
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(b) The maximum liability of the Alliance Service Provider pursuant to the
indemnity in clause 27.1(a) is the amount of $10,000,000.
27.2 THIRD PARTY CLAIMS
(a) The Alliance Service Provider must use all reasonable endeavours:
(i) to protect TXUN's interests with respect to claims by or
against third parties; and
(ii) to keep TXUN fully informed regarding incidents which give
rise or may give rise to claims by or against third parties
relating to any Services.
(b) The Alliance Service Provider must co-operate with TXUN and its
insurers with respect to the handling of claims by or against third
parties relating to any Services.
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28. CONFIDENTIALITY
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28.1 DISCLOSURE WITH CONSENT
(a) Except as provided in clause 28.2, each party must:
(i) keep all Confidential Information confidential; and
(ii) not disclose any Confidential Information to any other
person for any purpose without the prior written consent of
the other party.
(b) Where a party seeks consent to make a disclosure of any Confidential
Information, it must:
(i) notify the other party of the content of the proposed
disclosure and the identity of all persons to whom the
disclosure is intended to be made; and
(ii) ensure that the person to whom the disclosure is intended to
be made agrees in writing on terms acceptable to the
consenting party to keep the Confidential Information
confidential.
28.2 DISCLOSURE ON CONDITIONS
Subject to the provisions of this clause 28, a party may, without obtaining the
consent of the other party under clause 28.1, disclose Confidential Information
which would otherwise require consent under that clause in any of the following
circumstances and upon the following conditions:
(a) to the extent required by applicable Laws;
(b) to the extent required by any securities commission having
jurisdiction over that party, or by the rules of any stock exchange on
which are listed the shares in the capital of that party or a Related
Body Corporate of that party;
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(c) to the extent that the information is at that time lawfully generally
available to the public, other than as a result of a breach of this
Agreement;
(d) to the extent required by an order of a court of competent
jurisdiction for the purposes of any litigation or arbitration arising
from this Agreement; or as required for the purposes of the Dispute
Resolution Procedure;
(e) to a bank or other financial institution in connection with the
organisation of the party's, or a Related Body Corporate of a party's,
financial affairs including a bank or financial institution proposed
as a syndicate member by a provider of financial accommodation to the
party or the Related Body Corporate of the party;
(f) to a third person which has entered into, or is bona fide considering
entering into, a contract with a party for the sale of substantially
all of a party's assets; and
(g) to the employees, Subcontractors, directors, consultants, lawyers,
auditors and other persons for the purposes of this Agreement, the
performance of the Services, and the transactions contemplated by this
Agreement.
28.3 ADVANCE NOTICE OF DISCLOSURE
A party must, whenever practicable and permitted by law, prior to making any
disclosure pursuant to clauses 28.2(a), (b), or (d):
(a) advise the other party of the form and content of the proposed
disclosure; and
(b) provide the other party with a reasonable opportunity to comment on
the proposed disclosure.
28.4 CONFIDENTIALITY UNDERTAKING
A party must, prior to making any disclosure to a person pursuant to clauses
28.2(e) and (f), and to any Subcontractor or consultant permitted by clauses
28.2(g), require the person to whom it intends to make the disclosure to enter
into a written undertaking in favour of, and in a form acceptable to, the
parties to keep the Confidential Information to be disclosed confidential in
accordance with clauses 28.1 and 28.2.
28.5 CONTINUING OBLIGATION
The obligations of confidentiality under this clause 28 will survive the
termination of this Agreement, and each party must observe these obligations of
confidentiality for two years from the Termination Date.
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29. OWNERSHIP OF ASSETS AND INTELLECTUAL PROPERTY
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29.1 ELECTRICITY DISTRIBUTION NETWORK AND GAS DISTRIBUTION SYSTEM ASSETS
TXUN, or its Related Bodies Corporate will be the legal and beneficial owner of
any:
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(a) replacement Electricity Distribution Network assets or Gas
Distribution System assets; or
(b) Electricity Distribution Network or Gas Distribution System extensions
or expansions.
29.2 OTHER ASSETS PROVIDED BY TXUN
(a) TXUN is the sole and exclusive owner of all Manuals, lists, Maps,
drawings, specifications, bills of quantities, calculations and other
documents provided by TXUN to the Alliance Service Provider to enable
the Alliance Service Provider to perform the Services;
(b) Subject to clause 28 and 29.2(c), during the term of this Agreement,
the Alliance Service Provider may retain originals of all documents
listed in clause 29.2(a), and may:
(i) use and reproduce such documents; and
(ii) allow other persons to use such documents,
as necessary for the performance of the Services.
(c) The Alliance Service Provider must:
(i) ensure that any reproduction or use of documents under
clause 29(b) does not provide commercial gain for a
competitor of TXUN or its Related Bodies Corporate;
(ii) ensure that the documents listed in clause 29.2(a),
including the Manuals, are kept, at all times, current and
up to date with respect of all relevant Laws, Regulatory
Instruments, applicable practices and such other matters as
TXUN reasonably requires, using all due care and skill in
the preparation of such updates and ensuring the updates are
of a high quality;
(iii) provide to TXUN:
(A) copies of all documents listed in clause 29.2(a)
on the request of TXUN; and
(B) copies of all updates prepared pursuant to clause
29.2(c)(ii) immediately after those updates are
prepared; and
(iv) return the original documents listed in clause 29.2(a),
including any updates to those documents prepared in
accordance with clause 29.2(c)(ii), and any copies of those
documents, to TXUN on the Termination Date in accordance
with clause 22.1(b).
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29.3 INTELLECTUAL PROPERTY DEVELOPED DURING AGREEMENT
(a) If during the term of this Agreement the Alliance Service Provider
develops, creates, produces, discovers or first reduces to practice a
concept, product or process (whether or not capable of being patented)
pursuant to, or directly or indirectly relating to the Services:
(i) that concept, product or process will become the joint
property of TXUN and the Alliance Service Provider
immediately upon being developed, created, produced,
discovered or first reduced to practice; and
(ii) TXUN and its Related Bodies Corporate and the Alliance
Service Provider and its Related Bodies Corporate have the
right to use, license or sell that concept, product or
process.
(b) If TXUN requests in writing, the Alliance Service Provider must
deliver to TXUN copies of any materials relating to the concepts,
products or processes described in clause 29.3(a).
29.4 USE OF INTELLECTUAL PROPERTY
(a) The Alliance Service Provider must obtain, either from Governmental
Agencies or other persons, permission to use any intellectual property
which may be required for the Alliance Service Provider to perform the
Services, including obtaining all necessary licenses or government
approvals.
(b) TXUN must provide all reasonable assistance to the Alliance Service
Provider to enable it to comply with its obligation under clause
29.4(a).
(c) The Alliance Service Provider must:
(i) indemnify and hold harmless TXUN and its Related Bodies
Corporate, officers and employees from and against; and
(ii) at TXUN's option, defend TXUN and its Related Bodies
Corporate, officers and employees against,
any and all fines, penalties, losses, liabilities, damages, costs
(including reasonable legal fees and court costs) arising out of or
incurred as a direct or indirect result of, any alleged or actual
infringement or violation by the Alliance Service Provider, of any
right, or alleged right, relating to intellectual property, other than
intellectual property provided by TXUN which the Alliance Service
Provider is required to use under this Agreement.
(d) Any fine, penalty, loss, liability, damage or cost referred to in
clause 29.4(c) must not be included in the Reimbursable Costs or
otherwise recovered from TXUN.
(e) If any successful claim in relation to infringement of an intellectual
property right is brought against TXUN or the Alliance Service
Provider, the Alliance Service Provider must avoid any further
possible infringement of that intellectual property right by the least
costly and most appropriate means necessary, including by:
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(i) using alternative methods of performing the Services; or
(ii) obtaining the required permission to use the that
intellectual property right.
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30. USE OF TXU COMPANIES' MARKS
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(a) The Alliance Service Provider must display a trademark of TXUN or any
of its Related Bodies Corporate, as directed by TXUN and in the form
approved by TXUN, on equipment and vehicles used in the performance of
the Services and the apparel of employees used in the performance of
the Services.
(b) TXUN must ensure that:
(i) it provides; or
(ii) it ensures that its Related Body Corporate provides,
the Alliance Service Provider with a royalty free licence to use any
trademark owned by it or its Related Body Corporate, that TXUN has
directed the Alliance Service Provider to display under clause 30(a).
(c) The Alliance Service Provider may display its own trademark on the
equipment, vehicles and apparel referred to in clause 30(a), but, in
doing so, must comply with any directions given by TXUN in relation to
the size or position of that trademark.
(d) Even if TXUN has given a direction under clause 30(a), the Alliance
Service Provider must not display a trademark of TXUN or its Related
Bodies Corporate on any document, sign or promotional material without
the express approval of TXUN.
(e) For the avoidance of doubt, the Alliance Service Provider will not
have any right, title or interest in any trademark owned by TXUN or
its Related Bodies Corporate, which TXUN directs the Alliance Service
Provider to display under clause 30(a).
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31. ENVIRONMENT
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31.1 ENVIRONMENTAL REQUIREMENTS
(a) The Alliance Service Provider must provide the Services so as to
minimise any adverse impact on natural resources and the environment.
(b) In performing the Services, the Alliance Service Provider must:
(i) comply with all Environmental Laws and/or standard operating
practices notified by TXUN in relation to the environment or
the Work Sites; and
(ii) obtain and maintain ISO 14001 accreditation within a
reasonable time of the Commencement Date.
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(c) The Alliance Service Provider must immediately notify TXUN in writing
if the Alliance Service Provider directly or indirectly knows that it,
or any person performing any of the Services for it or on its behalf,
is not or may not be complying with the requirements of clauses
31.1(a) and 31.1(b).
(d) If requested in writing by TXUN, the Alliance Service Provider must
immediately make available to TXUN all information under the Alliance
Service Provider's control relating to:
(i) its efforts to comply with clauses 31.1(a) and 31.1(b); and
(ii) information pertaining to any hazardous substance used in or
in connection with the Services.
31.2 DISCOVERY OF HAZARDOUS SUBSTANCE
(a) If, during the performances of the Services or at a Work Site, the
Alliance Service Provider unexpectedly finds a reportable quantity of
any substance which the Alliance Service Provider reasonably believes
is a hazardous substance, the Alliance Service Provider must stop work
immediately and notify TXUN and any Government Agency who is required
by law to be notified of that discovery.
(b) If the Alliance Service Provider stops work in accordance with clause
31.2(a), it must not resume work until it is directed in writing by
TXUN to do so.
31.3 ENVIRONMENTAL AUDIT
The Alliance Service Provider must permit periodic environmental audits to be
conducted by TXUN or a nominee of TXUN, of the Services performed under this
Agreement.
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32. PUBLICITY
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(a) The Alliance Service Provider must not, and must ensure that its
Subcontractors do not:
(i) release any information in relation to this Agreement or the
Services for publication, advertising or any other purpose;
or
(ii) use the name of TXUN or any of its Related Bodies Corporate
in any publication, advertisement or promotion,
without the prior written approval of TXUN.
(b) TXUN must not unreasonably withhold its approval under clause 32(a).
(c) The Alliance Service Provider may, and may allow its Subcontractors
to, release information in relation to this Agreement or the Services
without obtaining the consent of TXUN under clause 32(a) if the
release of information is required by:
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(i) applicable Laws; or
(ii) any securities commission having jurisdiction over the
relevant entity; or
(iii) the rules of any stock exchange on which are listed the
shares in the capital of that entity or a Related Body
Corporate of that entity.
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33. TAXES
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33.1 ALLIANCE SERVICE PROVIDER TO COMPLY WITH TAX LAWS
The Alliance Service Provider must comply with all federal, state or municipal
laws, rules and regulations regarding Taxes and the payment of Taxes including,
without limitation stamp duty, withholding taxes, income tax and goods and
services tax (as set out in clause 14.3).
33.2 GST
For the avoidance of any doubt, all consideration payable by TXUN to the
Alliance Service Provider under this Agreement is exclusive of GST. To the
extent that any of the goods or services supplied under this Agreement are a
taxable supply for the purposes of GST, and the Alliance Service Provider has a
liability under the applicable legislation for the provision of that supply, the
Alliance Service Provider may pass on the applicable Goods and Services Tax
amount less any input tax credits claimed by it in respect of the goods and
services the subject of the Reimbursable Costs to TXUN and this amount will form
part of the Reimbursable Costs under this Agreement.
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34. INTEREST
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(a) A party must pay to the other party interest on all amounts which are:
(i) due and payable by it to the other party under this
Agreement; and
(ii) unpaid,
(an "Unpaid Sum"), at the rate which is equivalent to the aggregate
(expressed as a percent per annum) of 3% plus the rate of interest
quoted by the ANZ Bank as its 90 day benchmark lending rate at or
about 10:00 am on the date on which interest is so determined under
clause 34(b).
(b) The interest is determined for the purposes of clause 34(a):
(i) first, on (or with effect from) the date on which the amount
referred to in clause 34(a) was due; and
(ii) thereafter, on the first Business Day of each month after
the date referred to in clause 34(b)(i) for which (or for
part of which) such amount remains unpaid.
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(c) Interest payable under clause 34(a) accrues daily and is payable by a
party:
(i) on demand by the party to whom the Unpaid Sum is due; and
(ii) if there is no demand by the party to whom the Unpaid Sum is
due, on the last day of each calendar month.
(d) If interest payable under clause 34(a) is not paid when due, that
interest payment will itself bear interest in accordance with this
clause 34.
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35. REPRESENTATIVE
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35.1 TXUN'S REPRESENTATIVE
(a) TXUN must appoint, and maintain the appointment of, a senior manager
as its Representative who (or whose delegate) must:
(i) act on behalf of TXUN in connection with all matters
concerning this Agreement; and
(ii) be able to give, on behalf of TXUN, any approval or
instructions which may be required from TXUN under this
Agreement.
(b) Any approval or instructions given by TXUN's Representative is deemed
to be the approval of TXUN and binds TXUN for all purposes in
connection with this Agreement.
35.2 ALLIANCE SERVICE PROVIDER'S REPRESENTATIVE
The Alliance Service Provider must appoint, and maintain the appointment of, a
senior manager as its Representative who, (or whose delegate) must:
(a) act on behalf of the Alliance Service Provider in connection with all
matters concerning this Agreement; and
(b) be responsible for ensuring that the Services are performed by the
Alliance Service Provider in accordance with this Agreement.
35.3 CHANGE OF REPRESENTATIVE
A party must inform the other party in writing of any change in the identity of
its Representative forthwith upon such a change taking effect.
35.4 RELIANCE ON REPRESENTATIVE
A party may rely on any communication signed on behalf of the other party by its
Representative without inquiring as to its authenticity or checking its
accuracy.
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36. NOTICES
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36.1 REQUIREMENTS
All notices must be:
(a) in legible writing and in English;
(b) addressed to the recipient at the address or facsimile number set out
below or to any other address or facsimile number that a party may
notify to the other:
to TXUN:
Address:
Level 17, 452 Flinders Street Melbourne 3000
Attention:
Company Secretary
Facsimile no:
9229 6112
to the ALLIANCE SERVICE PROVIDER:
Address:
Level 7, 100 Arthur Street North Sydney 2060
Attention:
Company Secretary
Facsimile no:
9963 9691
(c) signed by the party or, where the sender is a company, by a
Representative or a member of the Alliance Board or Operating
Management Team; and
(d) sent to the recipient by hand, prepaid post (airmail if to or from a
place outside Australia) or facsimile.
36.2 RECEIPT
Without limiting any other means by which a party may be able to prove that a
notice has been received by the other party, a notice will be considered to have
been received:
(a) if sent by hand, when left at the address of the recipient;
(b) if sent by pre-paid post, 3 days (if posted within Australia to an
address in Australia) or 10 days (if posted from one country to
another) after the date of posting; or
(c) if sent by facsimile, on receipt by the sender of an acknowledgment or
transmission report generated by the sender's machine indicating that
the whole facsimile was sent to the recipient's facsimile number;
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but if a notice is served by hand, or is received by the recipient's facsimile,
on a day that is not a Business Day, or after 5:00 pm on a Business Day, the
notice will be considered to have been received by the recipient at 9.00 am on
the next Business Day.
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37. GUARANTEE OF ALLIANCE SERVICE PROVIDER'S OBLIGATIONS
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37.1 GUARANTOR ACKNOWLEDGES RECEIVING CONSIDERATION
(a) The Guarantor gives the guarantee and indemnity contained in this
clause 37 in consideration of TXUN agreeing to enter into this
Agreement at the request of the Guarantor.
(b) The Guarantor acknowledges the receipt of valuable consideration from
TXUN for the Guarantor incurring obligations and giving rights under
this clause 37.
37.2 GUARANTEE
(a) The Guarantor unconditionally and irrevocably guarantees to TXUN the
due and punctual performance and observance by the Alliance Service
Provider of the Alliance Service Provider's obligations under or in
connection with this Agreement, including all obligations to pay
money.
(b) If the Alliance Service Provider does not comply with its obligations
under or in connection with this Agreement, including all obligations
to pay money, the Guarantor must immediately comply with those
obligations on the written request of TXUN.
37.3 INDEMNITY
(a) The Guarantor unconditionally and irrevocably indemnifies TXUN against
all Claims arising from or incurred in connection with the Alliance
Service Provider's breach or failure to comply with any of its
obligations under this Agreement, including a breach of an obligation
to pay money.
(b) TXUN may enforce the right of indemnity in clause 37.3(a) even if TXUN
has not yet incurred an expense or made a payment.
(c) The Guarantor agrees that:
(i) the indemnity contained in clause 37.3(a) is a separate and
distinct obligation and must not be restrictively
interpreted by reason of the guarantee in clause 37.2; and
(ii) its liability under clause 37.3(a) is that of principal
debtor.
37.4 NO REQUIREMENT TO COMMENCE PROCEEDINGS
The Guarantor waives any right it may have of first requiring TXUN to commence
proceedings or enforce any other right against the Alliance Service Provider or
any other person before claiming under this clause 37.
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37.5 CONTINUING SECURITY
This guarantee and indemnity in this clause 37:
(a) is a continuing security;
(b) is not discharged by any one payment; and
(c) will remain in full force and effect until all of the obligations of
the Alliance Service Provider under this Agreement are satisfied in
full.
37.6 RIGHTS UNAFFECTED
(a) The liabilities of the Guarantor under this clause 37 as a guarantor,
indemnifier or principal debtor and the rights of TXUN under this
clause 37 are not affected by anything which might otherwise affect
them at law or in equity including, but not limited to, one or more of
the following:
(i) TXUN granting time or other indulgence to, compounding or
compromising with or releasing the Alliance Service
Provider;
(ii) acquiescence, delay, acts, omissions or mistakes on the part
of TXUN;
(iii) any transfer of a right of TXUN;
(iv) the termination, recission, variation or assignment of this
Agreement;
(v) the invalidity or unenforceability of an obligation or
liability of a person other than the Guarantor; or
(vi) the Guarantor not executing or not executing effectively
this guarantee and indemnity.
(b) For the avoidance of doubt, the obligations of the Guarantor pursuant
to this clause 37 will not be greater than the obligations of the
Alliance Service Provider under or in connection with this Agreement.
37.7 RESTRICTIONS ON GUARANTOR
Until all moneys payable to TXUN in connection with this Agreement are paid in
full, the Guarantor must not, without the prior written approval of TXUN:
(a) raise a set-off or counterclaim available to it or the Alliance
Service Provider against TXUN in reduction of its liability under this
clause 37;
(b) claim to be entitled by way of contribution, indemnity, subrogation,
marshalling or otherwise to the benefit of any security or guarantee
held by TXUN in connection with this Agreement;
(c) make a claim or enforce a right against a TXU Company or its property;
or
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(d) prove in competition with a TXU Company if:
(i) a liquidator, provisional liquidator, receiver,
administrator or trustee in bankruptcy is appointed for the
Alliance Service Provider; or
(ii) the Alliance Service Provider is otherwise unable to pay its
debts when they fall due.
37.8 VOID PAYMENTS
If a claim that a payment to TXUN in connection with this Agreement or this
clause 37 is void or voidable (including, but not limited to, a claim under the
laws relating to liquidation, administration, insolvency, or protection of
creditors) is upheld, conceded or compromised, TXUN is entitled immediately as
against the Guarantor to the rights to which it would have been entitled under
this clause 37 if the payment had not occurred.
37.9 ASSIGNMENT OF RIGHTS
TXUN may assign its rights under this clause 37.
37.10 TXUN'S EXPENSES
(a) The Guarantor must pay or reimburse TXUN on demand for TXUN's costs,
charges and expenses in making, enforcing and doing anything in
connection with this clause 37 including, but not limited to, legal
costs and expenses on a full indemnity basis.
(b) Money paid by the Guarantor under this clause 37 must be applied first
against payment of costs, charges and expenses under clause 37.10(a)
and then against other obligations under this clause 37.
37.11 PAYMENT IN GROSS
All moneys payable by the Guarantor under this clause 37 must be:
(a) paid in full without set-off or counterclaim; and
(b) free and clear of any present or future taxes, deduction or
withholding of any kind.
37.12 NO REPRESENTATIONS BY A TXU COMPANY
The Guarantor agrees that it has not executed this Agreement as a result of, by
reason of, or in reliance upon, any warranty, representation or information of
any kind whatsoever given by or on behalf of a TXU Company, its Related Bodies
Corporate or any of their respective directors, officers, employees, agents or
advisers.
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38. GENERAL PROVISIONS
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38.1 ENTIRE AGREEMENT
This Agreement is the entire agreement of the parties about the subject matter
of this Agreement and supersedes all other representations, negotiations,
arrangements, understandings or agreements and all other communications.
38.2 COSTS
Each party must pay its own costs in respect of the negotiation, preparation and
execution of this Agreement and the documents and transactions contemplated by
this Agreement.
38.3 ASSIGNMENT
(a) TXUN may, in its absolute discretion, assign, create an interest in or
deal in any other way with any of its rights under this Agreement if
the person to whom the rights are to be assigned or transferred:
(i) agrees to be bound by the obligations of TXUN in respect of
this Agreement; and
(ii) has demonstrated expertise in Australia or overseas in the
ownership or operation of a gas distribution system or
electricity distribution network.
(b) The Alliance Service Provider must not assign, create an interest in
or deal in any other way with any of its rights under this Agreement
without the prior written consent of TXUN, except as set out in clause
38.3(e) and (f).
(c) TXU may assign, create an interest in or deal in any other way with
any of its rights under this Agreement with the prior written consent
of TXUN.
(d) A party must not unreasonably withhold or delay its written consent to
the other party's request to assign, create an interest in or deal in
any other way with any of its rights under this Agreement.
(e) A party may:
(i) charge, pledge, mortgage or assign its rights or interest
under this Agreement by way of security; and
(ii) assign to the chargee, pledgee or mortgagee any money due or
to become due under this Agreement.
(f) A party may assign and novate its rights and obligations under this
contract to a Related Body Corporate.
(g) This Agreement will be binding on and inure to the benefit of a party
and its successors and permitted assigns.
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(h) A party must:
(i) acknowledge in writing, on the reasonable request of the
other party:
(A) any permitted assignment under this clause 38.3;
and
(B) the right of a permitted assignee to enforce this
Agreement against it; and
(ii) on the reasonable request of a permitted assignee, deliver
any certificates and copies of corporate documents relating
to this Agreement.
38.4 INDEMNITIES
The indemnities in this Agreement are:
(a) continuing, separate and independent obligations of the parties from
their other obligations and survive the termination of this Agreement;
and
(b) absolute and unconditional and unaffected by anything that might have
the effect of prejudicing, releasing, discharging or affecting in any
other way the liability of the party giving the indemnity except to
the extent that a party recovers in respect of the losses the subject
of the indemnities under the Insurance Policies.
38.5 INVALID OR UNENFORCEABLE PROVISIONS
If a provision of this Agreement is invalid or unenforceable in a jurisdiction:
(a) it is to be read down or severed in that jurisdiction to the extent of
the invalidity or unenforceability; and
(b) that fact does not affect the validity or enforceability of:
(i) that provision in another jurisdiction; or
(ii) the remaining provisions.
38.6 WAIVER AND EXERCISE OF RIGHTS
(a) A waiver by a party of a provision of or of a right under this
Agreement is binding on the party granting the waiver only if it is
given in writing and is signed by the party or an Representative of
the party granting the waiver.
(b) A waiver is effective only in the specific instance and for the
specific purpose for which it is given.
(c) A single or partial exercise of a right by a party does not preclude
another exercise of that right or the exercise of another right.
(d) Failure by a party to exercise or delay in exercising a right does not
prevent its exercise or operate as a waiver.
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38.7 AMENDMENT
This Agreement may be amended only by a document signed by both parties.
38.8 RIGHTS CUMULATIVE
The rights, remedies and powers of the parties under this Agreement are
cumulative and do not exclude any other rights, remedies or powers.
38.9 CONSENTS AND APPROVALS
Each party must do all things necessary to give full effect to this Agreement
and the transactions contemplated by this Agreement.
38.10 GOVERNING LAW
This Agreement is governed by the laws of Victoria.
38.11 JURISDICTION
Each party irrevocably and unconditionally:
(a) submits to the non-exclusive jurisdiction of the courts of Victoria;
and
(b) waives, without limitation, any claim or objection based on absence of
jurisdiction or inconvenient forum.
38.12 SURVIVAL OF CERTAIN PROVISIONS
(a) Clauses 5.3(a), 17, 22.4, 24, 25, 27, 28 29.3(c), 37 and 39 survive
the termination of this Agreement.
(b) If this Agreement or performance of this Agreement is rescinded or
terminated, no party is liable to the other parties except:
(i) under clauses 5.3(a), 17, 22.4, 24, 25, 27, 28, 29.3(c), 37
and 39; or
(ii) in respect of any breach of this Agreement occurring before
rescission or termination.
--------------------------------------------------------------------------------
39. DISPUTE RESOLUTION
--------------------------------------------------------------------------------
39.1 PARTIES NOT TO TAKE LEGAL ACTION
If a Dispute arises a party may not commence any court or arbitration
proceedings relating to the Dispute, except to seek urgent interlocutory relief,
unless it has complied with this clause 39.
88
<PAGE>
39.2 NEGOTIATION OF DISPUTE
(a) A party claiming that a Dispute has arisen must give written notice to
the other party:
(i) specifying the nature of the Dispute; and
(ii) requesting that the Operating Management Team meet to
resolve the Dispute;
(b) On receipt of a notice from a party pursuant to clause 39.2(a), the
other party must cooperate with that party to ensure that the
Operating Management Team meets to resolve the Dispute within 10
Business Days.
(c) If:
(i) the Dispute has not been resolved within 10 Business Days of
the meeting of the Operating Management Team in accordance
with clause 38.2(b); or
(ii) the Operating Management Team does not meet within 10
Business Days after one party has received a notice from the
other party under clause 39.2(a),
each party must cooperate with the other party to ensure that the
Alliance Board meets to resolve the Dispute within a further 10
Business Days.
(d) If:
(i) the Dispute has not been resolved within 10 Business Days of
the meeting of the Alliance Board in accordance with clause
39.2(c); or
(ii) the Alliance Board does not meet within the time limit
specified in clause 39.2(c),
each party must refer the Dispute to its chief executive officer, and
the chief executive officer of each party must meet to resolve the
Dispute within a further 10 Business Days.
(e) If the Dispute has not been resolved within 10 Business Days of the
meeting of the chief executive officers pursuant to clause 39.2(d),
the parties must appoint the non-binding mediation services of a
mediator:
(i) agreed by the parties; or
(ii) if the parties do not agree, appointed by the President of
the Law Institute of Victoria,
to assist in the resolution of the Dispute by the chief executive
officers.
(f) If:
89
<PAGE>
(i) the parties do not agree to appoint a mediator pursuant to
clause 39.2(e); or
(ii) the Dispute is not satisfactorily resolved with the
assistance of the mediator appointed pursuant to clause
39.2(e),
then:
(iii) if the Dispute is in relation to clauses 12.3(a),
12.3(b)(v), 12.4, 14.2, 14.3, 14.5, 16.6 and 18.1(c) of this
Agreement, either party may give notice to the other party
that the dispute is to be resolved by an Independent Expert
in accordance with clause 39.3; and
(iv) if the Dispute is not in relation to clauses 12.3(a),
12.3(b)(v), 12.4, 14.2, 14.3, 14.5, 16.6 or 18.1(c) of this
Agreement, this Agreement and the provision of Services
under this Agreement continue to operate unchanged.
39.3 INDEPENDENT EXPERT
(a) If a party gives notice to the other party under clause 39.2(f)(iii),
the parties must, within 5 Business Days. agree on a person who has
the qualifications set out in clause 39.3(c) for the purposes of
acting as Independent Expert under this clause.
(b) If the parties are unable to agree in accordance with clause 39.3(a),
either party may request that the President of the Institute of
Chartered Accountants in Victoria nominates a person who has the
qualifications set out in clause 39.3(c) to act as Independent Expert
under this clause.
(c) The Independent Expert must be a person:
(i) independent of both parties; and
(ii) who has appropriate qualifications and experience in the
subject matter of the Dispute to settle the Dispute.
(d) If the Independent Expert agreed by the parties under clause 39.3(a)
or nominated by the President of the Institute of Chartered
Accountants in Victoria under clause 39.3(b) accepts the appointment
as Independent Expert, that person must act as Independent Expert to
resolve the Dispute in accordance with this clause 39.3.
(e) The Independent Expert must act as expert and not as arbitrator in
resolving the Dispute and the provisions of the Commercial Arbitration
Act 1984 (Vic) do not apply.
(f) The decision of the Independent Expert in relation to the Dispute will
be final and binding on the parties.
(g) A party must provide all reasonable assistance to the Independent
Expert for the purposes of resolving the Dispute, including:
90
<PAGE>
(i) providing the Independent Expert with any documents or
information requested by the Independent Expert; and
(ii) complying with all reasonable requests of the Independent
Expert.
(h) The Independent Expert must decide on which party, or in what
proportions each party, will pay the costs of the Independent Expert
resolving a Dispute in accordance with this clause 39.3.
(i) A party must pay the costs of the Independent Expert as decided by the
Independent Expert under clause 39.3(h).
91
<PAGE>
EXECUTED as an agreement.
THE COMMON SEAL of )
WESTAR PTY LTD )
was affixed to this document )
in the presence of: )
------------------------------------ ----------------------------------------
Signature of director Signature of director/secretary
------------------------------------ ----------------------------------------
Name of director (please print) Name of director/secretary (please print)
THE COMMON SEAL of )
EASTERN ENERGY LIMITED )
was fixed to this document )
in the presence of: )
------------------------------------ ----------------------------------------
Signature of director Signature of director/secretary
------------------------------------ ----------------------------------------
Name of director (please print) Name of director/secretary (please print)
THE COMMON SEAL of )
TXU NETWORKS PTY LTD )
was affixed to this document )
in the presence of: )
------------------------------------ ----------------------------------------
Signature of director Signature of director/secretary
------------------------------------ ----------------------------------------
Name of director (please print) Name of director/secretary (please print)
<PAGE>
THE COMMON SEAL of )
AKAMON PTY LTD )
was fixed to this document )
in the presence of: )
------------------------------------ ----------------------------------------
Signature of director Signature of director/secretary
------------------------------------ ----------------------------------------
Name of director (please print) Name of director/secretary (please print)
THE COMMON SEAL of )
TENIX PTY LTD )
was fixed to this document )
in the presence of: )
------------------------------------ ----------------------------------------
Signature of director Signature of director/secretary
------------------------------------ ----------------------------------------
Name of director (please print) Name of director/secretary (please print)
<PAGE>
SCHEDULE 1
MAP OF THE ELECTRICITY DISTRIBUTION NETWORK
[GRAPHIC OMITTED]
<PAGE>
SCHEDULE 2
DESCRIPTION OF THE ELECTRICITY DISTRIBUTION NETWORK
(a) Conductor & Poles
The TXU Companies own and operate an electrical distribution network
consisting of approximately 35,500 kms of overhead conductor and 4,340 kms
of underground cable. The network operating voltages are 66kV, 22kV, 11kV,
6.6kV and 240/415V with approximately 466,000 cross-arm structures
associated with its network.
The overhead network includes approx 325,000 poles of which 64% are wood,
34% are concrete and 2% are steel.
(b) Transformers
There are approx 43,100 distribution transformers connected to the system
which vary in size from 10kVA to 2000kVA and consist of pole mounted,
ground type, kiosk and indoor constructions. There are also a limited
number of Automatic Voltage Regulators (AVRs). There are 102 zone
substation transformers that transform 66kV to 22kV,11kV or 6.6kV.
Associated with power measurement and protection are approx 714 Current
Transformers (CTs) and 268 Voltage Transformers (VTs). These CT and VT
installations consist of both 66kV and 22kV and are found primarily within
the zone substations, however several are also located within the
distribution system for High Voltage customer installations.
(c) Meters & Services
There are approx 500,000 electrical customers associated with the network,
with the same number of meters and services. The 500,000 meters and
services are a combination of single phase and multiphase installations
with 21% serviced underground and 79% overhead.
(d) Switches
Dispersed through the zone substation and distribution system are approx
6650 high voltage switches that allow flexible operation of the network
configuration.
(e) Circuit Breakers & ACRS
Dispersed through the zone substations there are approx 686 Circuit
Breakers rated at 66kV and 22kV along with approx 568 Auto Circuit
Reclosers rated at 12.7kV and 22kV on the distribution system. These
devices are an integral part of the discriminated protection system that
supports the network's quality and reliability of supply.
<PAGE>
(f) Public Lights
Public Lighting is an important focus for the TXU Companies' customers and
the network has approx 95,800 public lights incorporated with its network.
Of these lights, 24% are located on major roads while 76% are located
within the residential areas.
<PAGE>
SCHEDULE 3
MAP OF THE GAS DISTRIBUTION SYSTEM
[GRAPHIC OMITTED]
<PAGE>
SCHEDULE 4
DESCRIPTION OF THE GAS DISTRIBUTION SYSTEM
(a) Pipelines and Mains
The TXU Companies own and operate approximately 196km of transmission
pressure pipelines in metropolitan and country areas. These pipelines
transport gas from GPU Gasnet Pty Ltd's gas transmission system to Westar's
gas distribution system and operate at pressures between 515 kPa. and 2800
kPa. Transmission pipelines consist of 182 Km. of `licensed' pipelines
operating at above 1,050 kPa. and 14 Km. of `unlicensed' pipelines
operating between 515 to 1,050 kPa. Some pipe-work owned by Westar within
City Gates operates at pressures up to 7,000 kPa.
Westar's gas distribution system includes approx 7,400 Km. of mains, of
which 61% operate at high pressure, 28% at low pressure and 11% at medium
pressure. The high-pressure system operates at up to 515 kPa. and comprises
steel and polyethylene pipes. The medium pressure system operates at up to
210kPa. and comprises steel, cast iron and polyethylene pipes. The
low-pressure system operates at up to 7 kPa. and comprises steel, cast
iron, polyethylene and PVC pipes.
(b) Gas Services
There are approx 378,000 gas services supplying domestic, commercial and
industrial customers. Approx. 200,000 of these services are high pressure
(of which 116,000 are polyethylene) with the balance being low or medium
pressure services constructed using a variety of materials.
(c) Meters and Regulators
There are approx 416,000 installed meters, of which 98% are standard
domestic meters, with a capacity of approx 6 cubic metres per hour. All
domestic meters are diaphragm type construction and approximately 60% were
manufactured since 1985.
There are 7,800 larger capacity meters that are used by the TXU Companies
for industrial and commercial applications of which 96% have a diaphragm
style construction. The remainder of the TXU Companies' installed
industrial/commercial meters, comprise approx 181 rotary,
positive-displacement meters and 164 turbine meters. There are
approximately 1,250 industrial and commercial meter regulator sites
operating at pressures greater that 1.1kPa.
Currently, all industrial and commercial meters are removed from the field
and refurbished after every ten years of service. Larger
industrial/commercial installations can include multiple regulators and
sophisticated instrumentation. The TXU Companies have approx 208 consumer
sites with installed flow computers, of which 27 are accessed by telemetry
systems.
<PAGE>
The Gas Distribution Code has extended the life of domestic meters in the
field from 10 years to 15 years. Currently, these meters and comparable
types of meters can be left in the field if the sample passes annual tests
for compliance within the statutory limits.
(d) City Gates and Field Regulators
Westar's gas distribution system includes 94 field regulators, 33 city
gates, 18 heaters and 467 licensed valves. All field regulators are in
below ground pits. All city gates are above ground.
(e) District Regulators
Westar's gas distribution system includes 139 district regulators, which
are used to supply gas into low-pressure networks from the high and medium
pressure systems.
These regulator installations are located in the older reticulated areas
and may be installed in either above ground kiosks or below ground pits.
(f) SCADA
The S.C.A.D.A (Supervisory Control and Data Acquisition) system, uses
Remote Terminal Units (RTUs) to monitor and/or control the operation of 40%
of the transmission and high pressure distribution systems. The system
comprises 19 controlled city gate/field regulator sites and 80 monitored
sites. Under the current contract, Westar can terminate the provision of
this service from VENCorp by issuing twelve months notice, on or after 24
February 2000. The SCADA system is operated from the Fitzroy Control
Centre.
(g) T.L.P Gas Plant (Colac)
TXUN currently operates a Tempered Liquefied Petroleum Gas plant at Colac.
The plant produces TLPG by mixing liquefied petroleum gas (LPG) with air.
The plant contains LPG and TLP storage vessels, gas holder, gas mixers,
compressors, vaporisers and other equipment and is controlled by
sophisticated programmable logic control systems (PLCs).
(h) Land and Buildings
Westar has a number of freehold properties in various centres located
throughout Victoria.
The major gas sites are Ardeer, Geelong, Ballarat, Bendigo and Warnambool.
These centres are shown in Schedule 3, and are used for offices, depots,
LPG plant, storage, workshops and vehicle garaging, as well as for
distribution system infrastructure such as meters, regulators and city
gates.
<PAGE>
(i) Leases and Licences - Sites
Westar has 35 other gas sites leased or licensed from other parties on
which there are gas assets. None of the sites have buildings other than
those required to protect above ground regulators.
The TXU Companies have access to shared sites with GPU GasNet and other
industry parties where custody transfer stations are located, and also with
the Melbourne Water Authority on which other assets exist.
(j) Easements
Westar has 103 easements covering gas transmission pressure pipelines and
335 miscellaneous gas easements. Westar also has 43 `Consents to Lay',
which are used in instances where an easement is considered an `excessive
interest' such as, where a main is to be installed along an alignment and
planned to become a road reserve in the future. There are also 160 other
land interests associated with gas activities currently managed by the TXU
Companies.
Westar has extensive easement rights associated with sub-transmission and
distribution lines, both overhead and underground.
<PAGE>
SCHEDULE 5
ELECTRICITY DISTRIBUTION NETWORK OPERATIONS
AND MAINTENANCE SERVICES
(a) Fault & Emergency Work
Work performed on the Electricity Distribution Network where supply has
been interrupted, or assets damaged or rendered unsafe by breakdown, making
immediate operations and/or repairs necessary.
INCLUDES:
o Faults on the sub-transmission assets
o All operating associated with the fault or emergency
o Attendance at:
- electrical accidents
- supply failures to customers
- shocks or facilities fires
- high voltage injections
- emergency tree clearing
EXCLUDES:
o Prearranged work of any kind
o Maintenance of public lighting
o Asset replacement of any kind
(b) System Operations
Electrical operation of the High Voltage distribution and sub-transmission
network associated with preparation for prearranged work.
INCLUDES:
o Switching and patrolling
EXCLUDES:
o Operating related to specific Capital Projects.
(c) Overhead Line Maintenance
Maintenance of both High Voltage and Low Voltage lines including all
associated support hardware.
INCLUDES:
o Maintenance of all pole, cross-arm and conductor hardware <$500
o Work on television and radio interference (investigation and
correction)
EXCLUDES:
o Inspections and Vegetation management
o Asset replacement
<PAGE>
o Maintenance of all pole, cross-arm and conductor hardware >$500
(d) Voltage Complaints
Work involved in the investigation, validation and correction of all
voltage complaints (quality of supply).
INCLUDES:
o Customer management
o Measurement device installation and data analysis
o Construction activity to rectify problem
EXCLUDES:
o Capital activity
(e) High Voltage Installation Maintenance
Maintenance of distribution substations, switches, voltage regulators and
automatic circuit reclosers.
INCLUDES:
o Inspection, testing and maintaining of the high voltage assets and
their associated protective apparatus.
o Maintenance of site including fences and cleaning
o Replacement of high voltage apparatus where the value is <$500
EXCLUDES:
o Transformer Upgrades and replacements
o Maintenance of high voltage apparatus where the value is >$500
(f) Line/Pole Inspection/Treatment
All inspection, testing and treatment of sub-transmission, distribution and
private overhead power lines.
INCLUDES:
o Management of the inspection process and resources
o Pole preserving chemical treatment of poles
(g) Vegetation Management
Tree cutting, undergrowth control and waste disposal connected with
sub-transmission and distribution system line clearing in accordance with
the Electricity Safety Act 1998 (Act) and the Code of Practice for
Powerlines Clearance (Vegetation) 1996 (Code)
<PAGE>
INCLUDES:
o Management of the Vegetation process within the contracted guidelines,
including planning and management of resources to achieve planned
targets as well as any special additional requirements.
(h) Meter Maintenance
Prearranged Maintenance of TXUN meters (Gas & Electric), services & time
switches providing supply to customers' premises.
INCLUDES:
o removing, inspecting, testing and re-installation of meters, time
switches, overhead and underground services and associated equipment.
EXCLUDES:
o Replacement of any of the above assets with new assets.
(i) Underground Cable Maintenance
Inspection, testing and maintenance of underground high voltage
sub-transmission and distribution cable and low voltage reticulation cable
installations and terminations.
INCLUDES:
o Power, Supervisory and Protection cable maintenance
o Ancillaries, such as conduits, tunnels, man-holes, cover slabs, sumps
and terminations.
o Cable location enquiries.
EXCLUDES:
o Cable repairs to damage caused by another party.
(j) Public Lighting Maintenance
All works associated with patrolling, inspection and maintenance of public
lighting installations.
INCLUDES:
o Bulb replacement, Material supply, Scheduling, Resource Management
EXCLUDES:
o Lantern Replacements
(k) Property - Operating and Maintenance
Work associated with the operation and maintenance of a property.
INCLUDES:
o Office Cleaning, Gardening, Rubbish Removal etc.
<PAGE>
(l) Zone Substation Fault & Emergency
Work performed at zone substations where supply has been interrupted, or
assets damaged or rendered unsafe resulting from a fault or breakdown where
immediate action is necessary.
INCLUDES:
o All emergency work whether within or outside normal working hours
o All operating relating to the fault or emergency
EXCLUDES:
o Prearranged work of any kind
o Asset Replacements
(m) Zone Substation Plant Maintenance
Maintenance of all primary and secondary items of plant and equipment
located at zone substations.
INCLUDES:
o Garden Maintenance of Zone Substation Sites
EXCLUDES:
o Asset Replacement
(n) Retirements - Distribution Assets
The permanent removal from service of a Electricity Distribution Network
asset, including overhead, underground, sub-transmission, substation,
pipeline or regulators
INCLUDES:
o Total Design, Total Construction Works, System Updating
<PAGE>
SCHEDULE 6
GAS DISTRIBUTION SYSTEM OPERATIONS AND MAINTENANCE SERVICES
(a) Mains - Clearing Mains Stoppage
Description of activity:
Tracing the location of an interruption of supply in a gas main caused
by ingress of water or dirt and clearing it.
Variables:
Locations of stoppage; time spent on job (ordinary time or overtime);
sags in main and location of syphons; weather.
Work Driver:
Public complaint and system performance
(b) Mains - Mains Investigation and Proving
Description of activity:
Proving the location of a gas main prior to excavation work being
performed by external parties (generally above ground) and proving the
location of gas main, depth and pipe details for internal requests. On
site inspection of outside party works to preclude damage to gas
pipes. Any other investigation works on gas mains.
Variables:
Location of proving; time spent on job (ordinary time or overtime);
excavation required; ground conditions and reinstatement.
Work Driver:
External party requests for gas main locations and internal requests
for TXUN asset management strategy.
(c) Mains - Maintenance of above ground assets, marker posts and syphons.
Description of activity:
Annual inspection of aboveground gas mains, including those attached
to bridges, and any subsequent maintenance work including sand
blasting, painting and replacement of supports as deemed necessary
from the inspection. The maintenance of pipeline markers including
replacement of posts and warning signs and maintenance of syphon and
valve covers including locating, painting of covers and replacement of
access tubes.
Variables:
Location and number of marker signs; syphons and valves; frequency of
maintenance work and repairs required.
<PAGE>
Work Driver:
TXUN asset management strategy planned inspections and works by
outside parties.
(d) Mains - Repair Damaged Mains
Description of activity:
Repair to gas main caused by external third party damage.
Variables:
Location; pipe material and size; gas main pressure; need for
specialist equipment; time spent on job (ordinary or overtime); ground
conditions and reinstatement.
Work Driver:
Damages by outside parties.
(e) Mains - Repair Mains Escapes
Description of activity:
Repair to gas main caused by corrosion, leaking joint, broken main and
repairs to leaking valves.
Variables:
Location; pipe material and size; gas main pressure; need for
specialist equipment; time spent on job (ordinary or overtime); ground
conditions and reinstatement.
Work Driver:
Public reported escapes and leakage survey detection.
(f) Mains - Mains Syphon Pumping
Description of activity:
The routine and unplanned pumping of water out of gas mains with
syphon pumps from the low-pressure system where water has accumulated
in the pipes.
Variables:
Location; weather; time spent on job (ordinary or overtime)
Work Driver:
Public complaints; routine pumping of syphons derived from local
knowledge and maintenance history.
(g) Mains - Searching for Escape
Description of activity:
The searching for and pin pointing the exact location of a gas leak
from a gas main in the Gas Distribution System.
Variables:
Location, pipe material and size; time spent on job (ordinary or
overtime); ground conditions and reinstatement.
<PAGE>
Work Driver:
Public complaints; damages not reported and system faults.
(h) Mains - Alter / Lower Mains
Description of activity:
The alteration or lowering of a gas main generally 20m or less in
length..
Variables:
Location; pipe material and size; length of main altered; gas main
pressure; need for specialist equipment; time spent on job (ordinary
or overtime); ground conditions and reinstatement.
Work Driver:
Third party requests where proposed works affect a gas main.
(i) Services - Alter / Lower Services
Description of activity:
The alteration or lowering of a gas service including maintenance or
replacement of service valves.
Variables:
Location; pipe material and size; gas main pressure; time spent on job
(ordinary or overtime); ground conditions and reinstatement.
Work Driver:
Third party requests where proposed works affect a gas service and
faulty service valves.
(j) Services - Clear Service Stoppage
Description of activity:
Clearing an interruption of service gas supply caused by water, dust,
dirt, tree roots or supply problems.
Variables:
Location; pipe material and size; gas pressure although generally
occurs in low pressure system; time spent on job (ordinary time or
overtime); water travelling in gas mains; ground conditions and
reinstatement.
Work Driver:
Public complaint and system performance.
(k) Services - Cut Off (Debt / No longer required)
Description of activity:
The disconnection of an old service pipe which is no longer being used
and/or has been replaced by another pipe and/or the disconnection and
reconnection of a service pipe for debt.
<PAGE>
Variables:
Location; pipe material and size; gas pressure; time spent on job
(ordinary time or overtime); ground conditions and reinstatement.
Work Driver:
System performance, third party request and TXUN asset management strategy.
(l) Services - Service Investigation and Proving
Description of activity:
Performing an investigation on a service pipe after receiving a complaint
(due to poor supply) or request from the public. Proving the location of a
gas service (generally using a pipe locator but sometimes by excavation)
prior to excavation work being performed by third parties, as well as
proving service locations for internal requests. Providing on site
inspection of outside party works to preclude damage to gas service pipes.
Variables:
Location of proving; time spent on job (ordinary time or overtime);
excavation required; ground conditions and reinstatement.
Work Driver:
External party requests for gas service locations, public complaints and
internal requests for TXUN asset management strategy.
(m) Services - Repair Damaged Services
Description of activity:
Repair to gas service caused by external third party damage.
Variables:
Location; pipe material and size; gas pressure; time spent on job (ordinary
time or overtime); ground conditions and reinstatement.
Work Driver:
Damages by outside parties.
(n) Services - Repair Service Escapes
Description of activity:
Repair to gas service caused by corrosion, leaking connections and
fittings, and leaking service valves.
Variables:
Location; pipe material and size; gas pressure; time spent on job (ordinary
time or overtime); ground conditions and reinstatement.
Work Driver:
Public reported escapes and leakage survey detection.
<PAGE>
(o) Gasfit -Alter Meter Position
Description of activity
The reconnection or altering the position of a gas meter including the
renewal and replacement of gas fitting lines. Some work is chargeable.
Variables
Location; fitting pipe material and size; time spent on job (ordinary time
or overtime); access to existing fitting line and clearance under the
house.
Work Driver
External party requests for reposition of gas meter and TXUN asset
management strategy (mains renewal program).
(p) Gasfit - Meter Change
Description of activity:
Replacement and / or changeover of gas meters, and water meters associated
with bulk hot water installations including the replacement of meter
assembly components as required.
Variables:
Location; size and type of meter and assembly components; time spent on job
(ordinary time or overtime) and meter location.
Work Driver:
TXUN asset management strategy (time expired meter program), field life
sampling, faulty and damaged meters, customer complaints and load
requirements.
(q) Gasfit - Turn On / Restore Supply
Description of activity:
Restore customer gas supplies following disconnection for debt and/or turn
on for a new customer at existing address.
Variables:
Location and time spent on job (ordinary time or overtime)
Work Driver:
Public and Retailer requests.
(r) Gasfit - Final Reading
Description of activity:
Check meter details for final customer reading when a premise is to be
vacated and/or meter details as requested by TXUN.
Variables:
Location and time spent on job (ordinary time or overtime).
Work Driver:
Public and retailer requests.
<PAGE>
(s) Gasfit - Disconnect / Remove
Description of activity:
Removal of gas meter from the property.
Variables:
Location; size and type of meter and time spent on job (ordinary time or
overtime)
Work Driver:
Public and/or retailer request (eg where building coming down).
(t) Gasfit - Refix / Relight Appliances
Description of activity:
Refix of existing gas meter and relight of appliances after fitting line
alteration work, removal of gas meter and gas supply interruptions.
Variables:
Location; size and type of meter and appliances inside house and time spent
on job (ordinary time or overtime).
Work Driver:
TXUN asset management strategy, customer complaints and planned and
unplanned supply interruptions.
(u) Gasfit - Regulator Replacement / Maintenance
Description of activity:
Replacement and maintenance of gas regulators to maintain gas supply
including the fitting of raincaps and drilling of breather hole.
Variables:
Location; size; pressure and type of regulator and time spent on job
(ordinary time or overtime).
Work Driver:
TXUN asset management strategy, customer complaints, faulty regulators
and unplanned supply interruptions.
(v) Gasfit - General
Description of activity
Performance of work that is not covered under current work descriptions eg
fitting internal relief to meters to solve lock up problems; upgrade of
lead connections on meter outlet; attend gas leaks inside house and make
safe; high account investigations; pressure testing of customer fitting
lines; gas theft investigations; site visits where access cannot be gained
to the meter or inside house etc
<PAGE>
Variable
Location; job request; time spent on job (ordinary time or overtime).
Work Driver
Dependant on situations encountered on job site and customer and
retailer requests.
(w) City Gate Maintenance
Description of Activity:
Maintenance and operation of city gates, TP line valves and heaters. This
includes scheduled and breakdown maintenance, site maintenance and chart
changing.
Variables:
Location; faults detected and parts replacement.
Work driver:
TXUN asset management strategy and system performance.
(x) Field Regulator Maintenance
Description of Activity:
Maintenance and operation of field regulators, includes scheduled and
breakdown maintenance, site maintenance and chart changing.
Variables:
Location; faults detected and parts replacement.
Work driver:
TXUN asset management strategy and system performance.
(y) District Regulator Maintenance
Description of activity:
Maintenance and operation of district regulator stations. This includes
scheduled and breakdown maintenance, site maintenance, adjustments and
chart changing.
Variables:
Location; faults detected and parts replacement
Work driver:
TXUN asset management strategy and system performance.
(z) Meter Regulator Maintenance
Description of activity:
Maintain and operate industrial and commercial meter regulator
installations. This includes scheduled and breakdown maintenance, external
isolation valve inspection for accessibility and operation, adjustments and
chart changing.
Variables:
Location, faults detected and parts replacement
Work driver:
TXUN asset management strategy, system performance and customer
connections.
<PAGE>
(aa) Leakage Survey
Description of Activity: The provision of leakage surveys to ensure system
integrity. This includes planning of leakage surveys, detecting,
pin-pointing and reporting of leaks within the distribution system. The
works in particular will include the following.
Planning of Surveys
-------------------
Types of survey required fall under the following categories:
Category 1 Biannual (CBD)
Category 2 Annual (Places of Public congregation)
Category 3 Systematic (Four yearly general distribution)
Category 4 On request (Requests from Regions, Councils etc).
For each year of the contract, plan for the above surveys to be
carried out deciding on type, target lengths and timing of
surveys.
Detecting of Leaks
------------------
Utilise mobile and portable Flame Ionisation Units (FIUs) leak
detection equipment to carry out leak surveys.
Pinpointing of Leaks
--------------------
Pinpoint all leaks detected both below and above ground on
exposed pipe and fittings.
Reporting of Leaks
------------------
Provide the following relevant data, which will be entered into
the TXU Companies' information technology systems:
o Detection
o Pinpointing
o Completion
o Job creation and scheduling
o Work issued and in hand.
o Leakage rate per Kilometre (all regions) and average for
Westar.
o Kms and jobs surveyed and numbers outstanding in all
regions.
o Outstanding leakage repairs.
These data are used for asset repair and replacement strategies.
Variables:
Location; leaks detected and pin pointed; frequency of surveys
Work Driver:
TXUN asset management strategy.
<PAGE>
(bb) Cathodic Protection
Description of Activity:
The provision of corrosion protection services for Westar's gas
distribution steel pipe network, including:
Potential Surveys:
-----------------
Conduct six-monthly surveys using 24 hour data logging equipment on
180 areas on the Gas Distribution System and 21 licensed pipelines.
Analyse results and prepare reports and recommendations for TXUN and
for submission to regulatory authorities.
Electrolysis Surveys:
--------------------
Participate in typically nine co-ordinated area tests and
investigations each year, each test with approximately 30 recording
instruments. Includes data analysis and representing TXU Companies'
interests at site meetings and throughout each test.
Coating Defect Surveys and Inspection and Repair:
------------------------------------------------
Conducts coating defect surveys and assist with examination & repair
on typically 70 kms of transmission and distribution pipelines per
annum.
Monitoring of Cathodic Protection Units Performance and Administration
----------------------------------------------------------------------
of Power Consumption:
--------------------
Conduct monthly monitoring and adjustment of 110 impressed current
cathodic protection units. Verify, pay and record all related
electricity accounts.
Repair and Maintain Cathodic Protection Systems:
-----------------------------------------------
Carry out major and minor repairs as required. (Average 50 per annum.)
System Maintenance:
------------------
Carry out approximately 700 km of fault finding surveys on
distribution and transmission systems. Provide technical assistance
for repairs.
Consultancy, Works Co-ordination, Investigations:
------------------------------------------------
Average 300 assignments/projects per annum. Includes representing the
TXU Companies' interests on relevant Electrolysis, Standards and
Industry committees.
Design, Install and Commission:
------------------------------
Design, procure, install and commission an average of five impressed
current units and 50 sacrificial anode installations per annum.
Variables:
Location; soil types; electrical isolation; power source; detection and
repair of faults; electrical surges and condition of pipe coatings.
<PAGE>
Work Driver:
TXUN asset management strategy.
(cc) Pipeline Patrol
Description of activity:
The provision of pipeline security services for transmission pipelines and
city gates. This includes managing M.O.C.S and other authorities enquires
on these assets, the provision of on site inspection services for outside
works near these assets, the daily patrolling of these assets and
maintenance to pipeline easements and markers.
Variables:
Location and accessibility of assets and number of works in vicinity
of assets.
Work Driver:
TXUN asset management strategy, outside party requests for asset
location and works undertaken in vicinity of assets.
(dd) SCADA Maintenance
Description of Work Activity:
The maintenance and calibration of remote telemetry units.
Remote telemetry unit maintenance work is broken into four categories -
o Monitor Sites - 80 in total (70% of Sites - Below Ground)
These sites have simple functionality and only monitor site pressure
and status information. These sites are maintained once a year
o Fringe Sites - for Control Systems 14 in total.
These sites measure fringe pressure information that is used
perform automatic upstream system pressure control. These sites are
maintained every 6 months.
o Fringe Sites - for Monitor Systems, 9 in total.
These sites measure fringe pressure and status for system monitoring
purposes. These sites are maintained every 6 months.
o Control - 19 in total (70% of Sites Below Ground)
These sites perform pressure control functionality and monitor site
information. These sites are maintained every 6 months.
Variables:
Location and type of faults detected.
Work driver:
TXUN asset management strategy.
<PAGE>
(ee) Planned and Emergency Gas Flow Control
Description of Work Activity:
The provision of specialist control equipment and technicians for planned
maintenance and emergency response, for the flow control of gas in Westar's
steel and cast iron pipelines, as detailed below:
---------------- ----------- --------------
Pressure Size
---------------- ----------- --------------
Steel 50mm to Up to 7000kpa
200mm
---------------- ----------- --------------
Steel 50mm to Up to 2800kpa
450mm
---------------- ----------- --------------
Steel 32mm to Up to 515kpa
300mm
---------------- ----------- --------------
Cast Iron 100mm to Up to 210kpa
600mm
---------------- ----------- --------------
`Emergency' means an unplanned event, which directly affects Westar
---------
pipelines and/or pipe distribution assets and has the ability to cause
disruption to the business and/or risk to the public, employees and
environment. An emergency gas flow control team must be dispatched to the
emergency site within two hours to attend to the event.
`Gas Flow Control' means drilling and `stopping-off' gas flows in
----------------
pipelines, installing and connecting temporary bypass pipelines, cutting
and capping pipelines and purging and `flaring off' pipelines.
The `Emergency' and `Gas Flow Control' definitions provided above are only
--------- ----------------
in the context of the provision of specialist control equipment and
technicians.
Variables:
Location; pipe size; pressure; type of faults detected; time spent on job
(ordinary time or overtime).
Work driver:
Damage or modifications to Gas Distribution System
(ff) TLPG Plant Maintenance
Description of work Activity:
Maintain and operate the TLPG Plant in a safe and satisfactory manner, to
ensure the reliable distribution of TLPG to Colac consumers, in accord with
required gas quality. The works in particular will include the following:
o ensure sufficient stock of LPG for plant operation;
<PAGE>
o carry out routine daily and weekly plant operational inspections and
checks;
o maintain appropriate logging of inspections and other production
details;
o arrange LPG deliveries and transfers into plant storage facilities;
o maintain and operate plant and programmable logic control systems at
various stages of gas production;
o production of LP gas vapour through vaporisers;
o operation and adjustment of mixers to ensure correct proportions of
LPG and air are maintained to provide required heating value of mixed
gas;
o operation of compressors and after coolers for storage of gas into low
and high pressure tanks;
o maintain steady downstream pressure from on line storage tanks via
high-pressure regulator station;
o removal of condensate from compressors, storage vessels and
underground pipe-work siphon points; and
o testing and maintaining stand-by generator and fire protection deluge
systems.
Variables:
Number and type of faults detected in TLPG Plant, customer load
requirements influencing demand for gas production.
Work Driver:
TXUN asset management strategies, plant performance and customer demand for
gas.
(gg) Flow Computer Maintenance
Description of Work Activity:
The provision of service to maintain and calibrate flow computer
installations every 6 months or as requested. This includes maintenance of
test equipment and N.A.T.A endorsement.
Variables:
Location, mounting of in-line flow computer and type of unit installed.
Work Driver:
TXU Network asset management strategy and type of customer and load
connected to network.
<PAGE>
(hh) Data Logger Maintenance
Description of Work Activity:
The provision of service to maintain and calibrate data loggers every 12
months or as requested.
Variables:
Location, mounting of data logger and type of unit installed.
Work Driver:
TXUN asset management strategy and type of customer and load connected
to network.
(ii) Site Maintenance
Description of Work Activity:
The provision of site security patrolling at various city gates
Variables:
Location of city gates
Work Driver:
Vandalism at sites, TXUN asset management strategy
(jj) Winter Test Program
Description of Work Activity:
The provision of field data to TXUN through installation of pressure
recorders at various selected test points on the distribution system
including the setting of pressures at SCADA controlled sites over a
two week period.
Variables:
Location of SCADA controlled sites and selected test points.
Work Driver:
TXUN asset management strategy
<PAGE>
SCHEDULE 7
ELECTRICITY DISTRIBUTION NETWORK
REPLACEMENT CAPITAL WORKS SERVICES
(a) Sub-Trans Pole Replacement
Replacement of all Sub Transmission poles initiated by a pole test or
inspection.
INCLUDES:
o All directly associated replacement or re-attachment of underground
cables, public light fittings, services, hardware, stays, re-stringing
or re-sagging of conductors attached to the pole replaced made
necessary because of the pole replacement action.
o All directly associated labour, material, contract, motor vehicle and
miscellaneous costs.
EXCLUDES:
o Replacement of fittings on a pole other than the one being replaced.
o Meter replacement done as part of the pole replacement works.
o Any additional re-stringing or re-sagging of conductors not attached
to the pole replaced.
o Replacement of poles at the request of customers as covered by
Recoverable Works 116.
(b) Distribution Pole Replacement
Replacement of all distribution poles initiated by a pole test or
inspection.
INCLUDES:
o All directly associated replacement or re-attachment of underground
cables, public light fittings, services, hardware, stays, re-stringing
or re-sagging of conductors attached to the pole replaced made
necessary because of the pole replacement action.
o All directly associated labour, material, contract, motor vehicle and
miscellaneous costs.
EXCLUDES:
o Replacement of fittings on a pole other than the one being replaced.
o Meter replacement done as part of the pole replacement works.
o Any additional re-stringing or re-sagging of conductors not attached
to the pole replaced.
o Replacement of poles at the request of customers.
(c) Pole Reinforcement
All reinforcement, staking and rebutting of poles.
(d) Overhead Line Replacement
<PAGE>
Replacement of overhead distribution lines (re-conductoring) and crossarm
replacement to a value greater than $500.
INCLUDES:
o All directly associated replacement or re-attachment of underground
cables, public light fittings, services, hardware, stays, re-stringing
or re-sagging of conductors.
o All directly associated labour, material, contract, motor vehicle and
miscellaneous costs.
EXCLUDES:
o Conductor replacement with ABC when the asset have not reached the end
of its service life.
o Meter replacement done as part of the pole replacement works.
o Crossarm replacement to a value less than $500 covered in Distribution
Line Maintenance.
(e) Underground Cable Replacement
All works associated with the major replacement of underground distribution
cable.
INCLUDES:
o All directly associated labour, material, contract, motor vehicle and
miscellaneous costs.
EXCLUDES:
o Replacement of underground cables at the request of customers as
covered by Recoverable Works.
(f) High Voltage Installation Replacement
All works associated with the replacement of distribution substations,
transformers, switches and equipment.
INCLUDES:
o The replacement of assets as the result of a fault or operational
damage.
o Distribution fuse assemblies and surge diverters.
o Air break switch replacement.
o All directly associated labour, material, contract, motor vehicle and
miscellaneous costs.
EXCLUDES:
o Upgrading of the distribution system covered in Distribution System
Augmentation.
o Replacement of assets at the request of customers as covered by
Recoverable Works.
(g) Meters, Timeswitches & Services Replacement (156)
The replacement of meters, timeswitches and customer services.
<PAGE>
INCLUDES:
o The replacement of assets as the result of a fault or operational
damage.
o The replacement of assets to current technology
o Replacement of an existing overhead service with underground supply.
o All directly associated labour, material, contract, motor vehicle and
miscellaneous costs.
EXCLUDES:
o Testing and inspection
o Replacement of assets at the request of customers as covered by
Recoverable Works.
(h) Public Lighting Replacement
The replacement of public lighting poles and lanterns.
INCLUDES:
o All directly associated labour, material, contract, motor vehicle and
miscellaneous costs.
EXCLUDES:
o Lamp (Globe) and PE cell replacement covered in public lighting
maintenance.
<PAGE>
SCHEDULE 8
GAS DISTRIBUTION SYSTEM
REPLACEMENT CAPITAL WORKS SERVICES
(a) Mains - Mains Renewals
Description of activity:
Replace and abandon a short section of existing pipe with new pipe when the
existing pipe cannot be permanently repaired. Replacement length can be up
to 50m.
Variables:
Reinstatement; ground conditions; pipe material and size; job locality and
length of job; underground boring and construction method.
Work Driver:
Condition of main and impact on public safety, security of supply and
maintenance versus replacement costs.
(b) Services - Service Renewals
Description of activity:
Replace and abandon an existing customer service pipe with new pipe.
Generally referred to as A & B class renewals. ( A class renewal -
Temporarily repaired but condition is such that needs renewal as soon as
possible, generally by next working day. B class renewal - Temporarily
repaired but condition is such that renewal can be deferred for a few
weeks. )
Variables:
Reinstatement; ground conditions; pipe material and size; job locality;
underground boring; length of job and construction method. (Insertion
versus open cut)
Work Driver:
Condition of service and impact on public safety, security of supply and
maintenance versus replacement costs.
(c) Mains - Mains Extensions
Description of activity:
Extending the existing pipe network to transport gas to new customer in
existing gas supply area. Mains extension length can be up to 20m.
Variables:
Reinstatement; ground conditions; pipe material and size, job locality,
underground boring and length of job.
Work Driver:
Customer request for connection to network where it is found in the field
they are not on line of main and short mains extension is required.
<PAGE>
SCHEDULE 9
ELECTRICITY DISTRIBUTION NETWORK
TXUN INITIATEDCAPITAL WORKS SERVICES
(a) Zone Substation Plant & Equipment Replacement
All works associated with the replacement of plant and equipment at the
zone substation.
INCLUDES:
o The replacement of assets as the result of a fault or operational
damage.
o All directly associated labour, material, contract, motor vehicle and
miscellaneous costs.
EXCLUDES:
o Upgrading of the Zone Substation covered in Zone Substation
Augmentation.
o Replacement of assets at the request of customers as covered by
Recoverable Works.
(b) Gas Distribution System Augmentation
All work required to augment the Electricity Distribution Network to meet
general load growth and improve distribution systems performance, i.e. work
which is not associated with a particular customer or identified group of
customers associated with Customer Capital works.
INCLUDES:
o New distribution feeders.
o Voltage improvement substations and augmentations (including
conversions) to improve voltage levels or increase thermal ratings.
o Provision of capacity for future system expansion such as spare
underground cable ducts except where these are devoted to the sole
future use of a specific identified customer.
o Transformer augmentation.
o New high voltage switches, fuses, isolators, tie lines or high
voltage system re-arrangements.
o Low voltage works of a permanent nature which are carried out
primarily to overcome operational problems.
o The installation of equipment to improve the `supply reliability'
where the project capital value is >$500.
o All directly associated labour, material, contract, motor vehicle and
miscellaneous costs.
EXCLUDES:
o Testing and inspection
o Replacement of assets at the request of customers as covered by
Recoverable Work.
<PAGE>
(c) Zone Substation Augmentation
All capital work associated with the augmentation of zone substations to
meet general load growth and improve sub-transmission system performance.
INCLUDES:
o Transformer augmentation
o Installation of cooling fans/pumps
o Circuit breaker augmentation
o Cable augmentation
o Capacitor bank augmentation
o Communication and protection equipment modifications
o Bus work
o Metering modifications
o Works of a permanent nature which are carried out primarily to
overcome operational problems
o NERs (Neutral Earth Resistor)
(d) Fire Mitigation Capital Projects
Incorporates work that involves the reconfiguration of the high voltage or
low voltage network, the provision of additional supply capacity or
conversion to underground services for the purpose of fire mitigation.
INCLUDES:
o All labour, material, contract, vehicle and miscellaneous costs
associated with the project
EXCLUDES:
o Relocations which effectively leave the supply network unchanged
(e) Gas Distribution System Automation
Incorporates work undertaken on the Gas Distribution System to improve the
performance of the Electricity Distribution Network by the application of
automation technology. (ie) SCADA
INCLUDES:
o Computer controlled switching schemes
o Remotely operated switches
o Advanced metering
o Protection improvements
(f) Zone Substation Automation
Incorporates work undertaken within a zone substation to improve the
performance of the Electricity Distribution Network by the application of
automation technology. (ie) SCADA
<PAGE>
INCLUDES:
o Computer controlled switching schemes
o Advanced metering
o Protection improvements
(g) Gas Distribution System Visual Improvement
Incorporates work undertaken with the primary aim of improving the
appearance of the Electricity Distribution Network assets.
INCLUDES:
o The undergrounding of lines
o The relocation of lines
o The replacement of bare overhead conductors with insulated conductors
- when the primary aim is to reduce the visual impact of TXUN assets.
<PAGE>
SCHEDULE 10
GAS DISTRIBUTION SYSTEM TXUN INITIATED CAPITAL WORKS SERVICES
(a) Mains - Reinforcements
Description of activity:
Laying of new pipe to reinforce the supply of the existing network.
Variables:
Reinstatement; ground conditions, pipe material and size, job locality,
underground boring and length of job.
Work Driver:
TXUN asset management strategy, security of supply and Gas Distribution
System performance
(b) System Operations - District Regulator
Description of activity:
Installation of a district regulator in an area where a regulator
previously did not exist. Also included is the relocation of a district
regulator from one area to another, the modification of a district
regulator to increase capacity and the removal of a district regulator.
Variables
Location, design of district regulator, ground conditions and
reinstatement.
Work Driver
TXUN asset management strategy, Gas Distribution System performance and
augmentation.
(c) Field Regulator
Description of activity
Installation of field regulator into an area where no regulator previously
existed. Also included is the relocation of a field regulator from one area
to another, the modification of a field regulator to increase capacity and
the removal of a field regulator.
Variables
Location; design of field regulator; ground conditions and reinstatement.
Work Driver
TXUN asset management strategy, Gas Distribution System performance and
augmentation.
(d) SCADA ( Remote Terminal Units )
Description of activity:
Installation of remote telemetry units at network fringe points, city gates
and field regulators to monitor system performance.
<PAGE>
Variables:
Location, power source available, ground conditions, type of unit and
method of communication used. ie radio or telephone.
Work Driver:
TXUN asset management strategy and monitoring of Gas Distribution System
performance.
(e) Mains - Mains Renewals
Description of activity:
Replace and abandon existing pipe with new pipe.
Variables:
Reinstatement; ground conditions; pipe material and size; job locality and
length of job; underground boring and construction method.
Work Driver:
TXUN asset management strategy for replacement of pipes and service
provider input from maintenance of Gas Distribution System performance.
(f) Services - Service Renewals
Description of activity:
Replace and abandon an existing customer service pipe with new pipe.
Variables:
Reinstatement; ground conditions; pipe material and size; job locality;
underground boring; length of job and construction method. (Insertion
versus open cut)
Work Driver:
TXUN asset management strategy associated with mains replacement program.
<PAGE>
SCHEDULE 11
ELECTRICITY DISTRIBUTION NETWORK CUSTOMER INITIATED
CAPITAL WORKS SERVICES
(a) Medium Density Housing - URD & PURD
Underground or partial underground cable works to provide supply to new
medium density residential subdivisions, neighbourhood extensions both
specific and general as well as minor low voltage extensions in medium
density areas, supplied by extending or upgrading the distribution system.
INCLUDES:
o All directly associated labour, material, contract, motor vehicle and
miscellaneous costs.
EXCLUDES: Metering and servicing and lots connected from line of mains
covered in Meter and Servicing.
(b) Dual Occupancy and Multiple Occupancy Supplies
Works to provide additional supply points to existing lots from roadside
mains in the medium density residential subdivisions including any updating
of the roadside low voltage mains and installations of additional
subdivisions (Including any high voltage works for those substations).
INCLUDES:
o All directly associated labour, material, contract, motor vehicle and
miscellaneous costs.
EXCLUDES: Additional services in low density areas, metering and servicing
and lots connected from line of mains covered in Meter and Servicing.
(c) Business Supply Projects
Works to provide new or increased supply for Industrial or Commercial
Customers.
INCLUDES:
o Units, flats and farms industrial supplies requiring more than a
minimum capacity substation (10 kVA single phase).
o All directly associated labour, material, contract, motor vehicle
and miscellaneous costs.
EXCLUDES: Metering and servicing and lots connected from line of mains
covered in Meter and Servicing.
(d) Private Electric Line Replacement
Works included in the replacement of private electric lines (PELs) with a
Electricity Distribution Network high voltage spur line and substation or
<PAGE>
undergrounding of overhead LV service from the substation or LV
distribution pole to a service pit on the customer's boundary.
INCLUDES:
o All directly associated labour, material, contract, motor vehicle and
miscellaneous costs.
EXCLUDES:
Metering covered in Meter and Servicing.
(e) Low Density Housing
Works to provide new or increased overhead or underground supply to low
density subdivisions and single/small group extensions.
INCLUDES:
o Units, flats and farms industrial supplies which can be supplied with
a substation of 10 kVA or less.
o All directly associated labour, material, contract, motor vehicle and
miscellaneous costs.
o Associated costs of constructing the necessary "backbone" assets to
facilitate supply.
EXCLUDES:
Metering and servicing and lots connected from line of mains covered in
Meter and Servicing.
(f) Meters, Timeswitches and Servicing
All works required to service and meter customers to provide new, increased
or changed supply not covered by a fixed change. This work also includes
high voltage metering installation, timeswitches for hot water.
INCLUDES:
o Additional services in low density areas;
o metering and servicing and lots connected from line of mains; and
o all directly associated labour, material, contract, motor vehicle and
miscellaneous costs.
EXCLUDES:
Meter & timeswitch maintenance and replacement of overhead services with
underground supply covered in Meter & Service replacement.
(g) Recoverable and Special Capital Works
All capital works carried out for customers or other authorities in which
actual costs are externally financed and for which the prime purpose is to
satisfy a requirement other than new or increased supply.
<PAGE>
INCLUDES:
o Recoverable works expenditure of capital nature associated with assets
damaged (accidental or wilful) by personnel other than personnel of
the TXU Companies or the Alliance Service Provider; and
o all directly associated labour, material, contract, motor vehicle and
miscellaneous costs.
EXCLUDES:
Metering and servicing and lots connected from line of mains covered in
Meter and Servicing.
(h) Public Lighting Capital Projects
All work for the provision of new or upgraded public lighting including
both major road schemes and minor street schemes.
INCLUDES:
o All directly associated labour, material, contract, motor vehicle and
miscellaneous costs.
(i) Fixed and Other Charges
All work for which customers will be charged under the "Schedule of Fixed
Charges" and recoverable works of a non capital nature.
INCLUDES:
o All directly associated labour, material, contract, motor vehicle and
miscellaneous costs.
<PAGE>
SCHEDULE 12
GAS DISTRIBUTION SYSTEM CUSTOMER INITIATED
CAPITAL WORKS SERVICES
(a) Mains - Supply Mains
Description of activity:
Laying of new pipe to supply customer(s) outside existing Gas Distribution
System.
Variables:
Reinstatement; ground conditions; pipe material and size; job locality;
underground boring and length of job.
Work Driver:
TXUN asset management strategy, security of supply and market forces with
customer/developer requests.
(b) Mains - Mains Extensions (Domestic)
Description of activity:
Extending the existing pipe network to transport gas to new domestic
customers in existing gas supply areas and/or new sub-division or housing
estates.
Variables:
Reinstatement; ground conditions; pipe material and size; job locality;
underground boring and length of job.
Work Driver:
Market forces with new estate developments, customer requests for
connection and TXUN asset management strategy.
(c) Mains - Mains Extensions (Industrial / Commercial)
Description of activity:
Extending the existing Gas Distribution System to transport gas to new
Industrial and Commercial customers in existing gas supply areas and/or new
sub-division or Industrial estates.
Variables:
Reinstatement; ground conditions; pipe material and size; job locality;
underground boring and length of job.
Work Driver:
Market forces with customer requests for connection and TXUN asset
management strategy.
(d) Services - New Services (Domestic)
Description of activity:
Pipe laid for connection of new customer to Gas Distribution System.
<PAGE>
Variables:
Reinstatement; ground conditions; pipe material and size; job locality (new
or existing home); time spent on job (ordinary time or overtime);
underground boring and length of job.
Work Driver:
Market forces with customer requests for connection.
(e) Services - New Services (Commercial Industrial)
Description of activity:
Pipe laid for connection of new industrial/commercial customer to Gas
Distribution System.
Variables:
Reinstatement; ground conditions; pipe material and size; job locality
(new or existing premises); underground boring and length of job.
Work Driver:
Market forces with customer requests for connection.
(f) Service Enlargement
Description of activity:
Enlarge or upgrade customer service pipe.
Variables:
Reinstatement; ground conditions; pipe material and size, job locality,
underground boring and length of job.
Work Driver:
Market forces with customer requests for load increase
(g) Gasfit - New Meter Installation
Description of activity:
Installation of new meter for domestic, commercial and industrial customers
operating at 1.1kpa ranging in size from 6 c/m/h to 142 c/m/h.
Variables:
Meter size; regulator installed (includes below ground black box
regulator); time spent on job (ordinary time or overtime) and location; TXU
Network Asset Management Strategy.
Work Driver:
Market forces with customer requests for connection and customer load.
(h) Meter Regulator
<PAGE>
Description of activity:
Installation of a meter regulator operating at greater than 1.1kpa and/or
greater than 142m3/hr for connection of new industrial/commercial customer
to Gas Distribution System. Also included is the relocation of a meter
regulator from one area to another, the modification of a meter regulator
to increase capacity and the removal of a meter regulator.
Variables:
Location; design of meter regulator; time spent on job (ordinary time or
overtime), ground conditions and reinstatement.
Work Driver:
Market forces with customer requests and customer load.
(i) Data Loggers and Flow Computers
Description of activity:
Installation of data loggers and flow computers at large industrial meter
regulator sites for gathering customer metering information.
Variables:
Location; power source available; type of unit and method of communication
used (ie radio or telephone).
Work Driver:
TXUN asset management strategy and compliance with MSO Rules (customer
tranching).
(j) System Operations - City Gate
Description of activity:
Installation of a city gate in an area where a city gate previously
did not exist.
Variables
Location; design of city gate; ground conditions and reinstatement.
Work Driver
Supply to a new town
(k) System Operations - Field Regulator
Description of activity
Installation of field regulator into an area where no regulator previously
existed.
Variables
Location; design of field regulator; ground conditions and reinstatement.
Work Driver
Supply to a new town
<PAGE>
SCHEDULE 13
BUSINESS PROCESSES
(a) Customer Initiated Capital Works Services - change to Electricity
Distribution Network or Gas Distribution System required
(Note: Customer includes a retailer and/or developer when applied to gas.)
Customer Initiated Capital Works Services include an extension or change to
the existing Electricity Distribution Network or Gas Distribution Systems
that is requested and may be primarily financed by the customer.
In these cases, the customer will register its requirements with TXUN and
the relevant TXUN responsible officer will determine an outline design and
estimate for approval and customer acceptance. If the proposed work is
complex, TXUN must involve the Alliance Service Provider in the project
design/estimation at this stage.
Upon acceptance of the offer by the customer the project will be issued to
the Alliance Service Provider for detailed design. This detail must include
a site survey (if required), all associated drafting, all easement and
lease negotiations (if required) and the production of a scope of works and
working documents suitable for construction.
As a result of the design process, the Alliance Service Provider must:
(i) define a comprehensive bill of materials; and
(ii) arrange the procurement and supply of the required materials to complete
the construction activities.
All materials supplied must conform to the standards set out by TXUN.
The Alliance Service Provider must construct the works in a safe and
quality manner. The Alliance Service Provider is responsible for
negotiating access to the specific network and undertaking any required
switching but only as directed by TXUN.
Upon completion of the works, The Alliance Service Provider must update all
the relevant information systems.
(b) Customer Initiated Capital Works Services - change to Electricity
Distribution Network or Gas Distribution System not required (ie New
Connection Service)
Customer Initiated Capital Works Services include situations where a
Customer wishes to be connected to the Electricity Distribution Network or
Gas Distribution System where the connection does not require an extension
or change to the existing Electricity Distribution Network or Gas
Distribution System.
In these cases, the customer will contact the TXUN call centre (operated by
Global Customer Solutions Pty Ltd) where the Customer details are
<PAGE>
registered and a specific work order is generated for the servicing and
metering of the customer's premises.
Where the servicing is not complicated, (eg. direct overhead service,
domestic gas service), the Alliance Service Provider must arrange the
supply of the required material and install the service and meter
accordingly.
Where the service installation is complicated, (eg. electrical underground
Service, small commercial/industrial gas service or retirement village),
the Alliance Service Provider must:
(i) design the cable/gas route;
(ii) supply the materials;
(iii) install the service and meter; and
(iv) produce a detailed drawing of the installation
All materials supplied must conform to the standards set out by TXUN.
The Alliance Service Provider must construct the works in a safe and
quality manner. The Alliance Service Provider is responsible for
negotiating access to the specific network and undertaking any required
switching but only as directed by TXUN.
Upon completion of the metering and servicing work, the Alliance Service
Provider must ensure that the relevant information systems are updated.
(c) Underground Reticulation Development Construction
Underground Reticulation Development Construction is electrical
reticulation of newly developed housing and industrial estates. This work
is performed on a turnkey basis where the Developer selects who will design
and construct the assets.
Prior to any parcel of land within the area of the Electricity Distribution
Network as set out in schedule 1 being subdivided, it must be approved by
TXUN in relation to the availability of electricity supply to the parcel.
At this stage, TXUN will develop an outline design for the route of the
`backbone' supply through the subdivision to ensure that easements are
available for cables and substations. This is required and a single
subdivision may have multiple stages developed at different times by
different developers and the over-all cost of the high voltage assets must
be distributed equitably between each stage development.
A developer will contact TXUN and request certification of its subdivision.
Prior to this certification, TXUN will request payment from the developer
and enter into a connection contract, which will allow the developer to
connect to the Electricity Distribution Network.
<PAGE>
The developer will then engage a contractor to design, supply material,
construct and commission the reticulation system associated with the supply
of electricity to the estate. The contractor arranges compliance audits
that are `spot' checked by TXUN to ensure the quality of the assets that
are being connected to the Electricity Distribution Network.
Upon completion of the works, the Alliance Service Provider must update all
the relevant information systems.
(d) TXU Network Initiated Capital & Planned Asset Replacement
This capital work is initiated by TXUN and represents the investment of
capital into the Electricity Distribution Network and Gas Distribution
System to improve their performance, capacity and reliability.
TXUN, in consultation with the Alliance Service Provider, identifies
projects that will benefit TXUN. The projects are registered and an outline
design, estimate and business case are developed for consideration and
approval.
Once approved, these projects and their subsequent activities are
scheduled, in consultation with the Alliance Service Provider, to ensure
that the work can be completed. This will include scheduling the design,
survey, drafting, material ordering, construction, commissioning and record
updating.
The design will include a site survey (if required), all associated
drafting, all easement and lease negotiations (if required) and the
production of a detailed scope of works and working documents suitable for
construction.
As a result of the design process, a comprehensive bill of materials will
be defined and the Alliance Service Provider must arrange the procurement
and supply of the required materials to complete the construction
activities.
All materials supplied must conform to the standards set out by TXUN.
The Alliance Service Provider must construct the works in a safe and
quality manner. The Alliance Service Provider is responsible for
negotiating access to the specific network and undertaking all the required
switching but only as directed by TXUN.
Upon completion of the works, the Alliance Service Provider must update all
the relevant information systems.
(e) Asset Inspections - Maintenance / Asset Replacement
Asset inspection and the resulting maintenance is defined by policy set by
TXUN which includes the standards to which assets will be maintained and
the inspection cycles/criteria applicable to each type of asset.
The inspection activity is scheduled and the specific assets are inspected
and as a result classed as defective or in need of maintenance or
replacement. The relevant maintenance information system is updated with
this information and a package of work is developed for approval and
<PAGE>
action. Significant asset replacement will require the approval of TXUN
prior to proceeding.
The maintenance/replacement works are programmed into the works schedule
and the Alliance Service Provider will arrange the procurement and supply
of the required materials to complete the maintenance activities.
All materials supplied must conform to the standards set out by TXUN.
The Alliance Service Provider must construct the works in a safe and
quality manner. The Alliance Service Provider is responsible for
negotiating access to the specific network and undertaking all the required
switching but only as directed by TXUN.
Upon completion of the works, the Alliance Service Provider must update all
the relevant information systems.
(f) Planned Maintenance
Planned Maintenance is defined by policy set by TXUN, which includes the
frequency and standards to which assets will be maintained. This work is
based on preventative maintenance cycles and is not dependent on inspection
results.
The Alliance Service Provider must develop the maintenance plan with TXUN
approval, and package the required work.
The maintenance works are programmed into the works schedule and the
Alliance Service Provider must arrange the procurement and supply of the
required materials to complete the maintenance activities.
All materials supplied must conform to the standards set out by TXUN.
The Alliance Service Provider must construct the works in a safe and
quality manner. The Alliance Service Provider is responsible for
negotiating access to the specific network and undertaking all the required
switching but only as directed by TXUN.
Upon completion of the works, the Alliance Service Provider must update all
the relevant information systems.
(g) Fault and Emergency Work
Fault and Emergency Work results from incidents affecting the Electricity
Distribution Network or Gas Distribution System where supply is lost or
disrupted. The cause of these incidents may be weather, equipment failure,
or third party intervention.
Typically a customer will contact the TXUN call centre (operated by Global
Customer Solutions Pty Ltd) to report the loss of supply to its premises.
The fault details are recorded by at the call centre and the work order is
electronically forwarded to the System Control Centre for dispatch to the
relevant work crews. SCADA and other telemetered devices are also a source
<PAGE>
of incidents on the network, however these notifications are delivered
directly to the System Control Centre.
The Alliance Service Provider must maximise the resource utilisation and
therefore the restoration of faults through managing the dispatch activity.
When major incidents occur, TXUN will manage the outage and direct the
dispatchers accordingly.
The field crews will attend, investigate and repair the fault in a safe and
timely manner. Where the fault results in a major piece of equipment
requiring replacement, the Alliance Service Provider must consult TXUN.
The fault and emergency work will be carried out in a safe and quality
manner with the Alliance Service Provider responsible for negotiating
access to the specific network and undertaking all the required switching
as directed by TXUN.
Upon completion of the works, the Alliance Service Provider will update all
the relevant information systems.
<PAGE>
TXU PROCESS OWNERSHIP - POST INTERGRATION
[GRAPHIC OMITTED]
<PAGE>
TXU PROCESS OWNERSHIP - POST INTERGRATION
[GRAPHIC OMITTED]
<PAGE>
TXU PROCESS OWNERSHIP - POST INTERGRATION
[GRAPHIC OMITTED]
<PAGE>
SCHEDULE 14
INFORMATION SYSTEMS MANAGEMENT SERVICES
(a) Obligation to provide data
The Alliance Service Provider must provide the following data to TXUN, and
ensure that the data is, at all times, accurate and up to date:
(i) "Proposed" and "as constructed" details of new, replaced or repaired
assets;
(ii) details in support of a gas mains replacement "points system" which records
the history and status of distribution assets, to assist in determining
replacement/renewal strategies in accordance with TXU Network's asset
management plan;
(iii) data required for TXU Network's financial reporting process;
(iv) data required to provide estimates to retailers and customers;
(v) data proving that labour and material rates are market tested;
(vi) data concerning domestic meter installation, replacement or movement and
the initiation of the retailer, including stock inventory, repair and
testing;
(vii) data and systems associated with the issuing and control of statutory
notices for excavated works requiring restoration of existing surfaces,
resulting from works undertaken;
(viii) details of cost and work done on all TXU Network assets, in support of
regulatory reporting;
(ix) materials cost data to provide information for specific job costing
reports, which will be used for auditing and performance analysis;
(x) data associated with tracking the life cycle of all jobs;
(xi) history of all work performed;
(xii) details of reported faults and subsequent follow-up action;
(xiii) data required for productivity performance and cost analysis reports; and
(xiv) data required for updating TXUN' asset register.
The Alliance Service Provider must provide this data by way of direct input
into TXU Network's systems set out below, or by electronic data transfer in
a format approved by TXUN.
The Alliance Service Provider must ensure that the data provided to TXUN is
of high quality, accurate and complete.
<PAGE>
Accordingly, TXUN must provide the Alliance Service Provider with access to
its IT systems described below. Alternatively, the Alliance Service
Provider may choose not to use these systems to provide the information
required by TXUN. In this case, the Alliance Service Provider must comply
with the requirements set out below. The terms of access of the Alliance
Service Provider to the TXUN IT Systems are set out below.
(b) Terms of access to TXUN' IT Systems
(i) The Alliance Service Provider must make any desktop hardware changes
necessary to access the IT Systems.
(ii) The Alliance Service Provider must not give access to the IT Systems unless
it has the prior written consent of TXUN.
(iii) All data relating to the assets forming part of the Electricity
Distribution Network and Gas Distribution System is owned by TXUN.
(iv) The Alliance Service Provider must pay for any enhancements to the IT
Systems initiated by the Alliance Service Provider and, for the avoidance
of doubt, this cost will be a Reimbursable Cost.
(v) The Alliance Service Provider must ensure that all systems, networks and
data under its control will not be affected by any date related issue,
including Year 2000 compliance, and that any existing or new interface
systems are also Year 2000 compliant.
(vi) The Alliance Service Provider must ensure it has adequate IT
infrastructure, resources, policies, procedures and standards to ensure it
meets the above requirements.
(c) If Alliance Service Provider uses other systems
(i) If the Alliance Service Provider does not use the TXUN IT systems set out
above, any costs additional to those that would normally be associated with
the provision of these systems must be borne by the Alliance Service
Provider. Moreover, if the Alliance Service Provider does not use these
systems, it must ensure that data and system integrity is maintained to the
same standards as TXUN IT Systems in respect of:
o maintenance of security access to systems and WAN that provides a
safe and secure computing environment;
o firewalls that include hardware, software and configuration
management and support to secure data and communications;
o a disaster recovery plan; and
o backup services to ensure business continuity.
If the Alliance Service Provider does not use the TXUN IT Systems, it
must ensure that a disaster recovery plan is in place that ensures
that:
o all data associated with the assets owned or operated by or for
TXUN can be recovered; and
<PAGE>
o business continuity will prevail in any circumstance requiring
execution of the disaster recovery plan.
(ii) All data relating to the assets forming part of the Electricity
Distribution Network and Gas Distribution System is owned by TXUN.
(iii) The Alliance Service Provider must ensure that all systems, networks and
data under its control will not be affected by any date related issue,
including Year 2000 compliance, and that any existing or new interface
systems are also Year 2000 compliant.
(iv) The Alliance Service Provider must ensure it has adequate IT
infrastructure, resources, policies, procedures and standards to ensure it
meets the above requirements.
(d) Existing IT Systems made available by TXUN
(i) GAS SYSTEMS
(A) SPLYDB
SPLYDB is an internally developed suite of sub-systems that contains and
processes location attribute and technical information regarding network
assets. It consists of the following sub-systems;
o Distribution Information System (DIS);
o Contract Management System (CMS);
o Meter Management System (MTRMS);
o Meter and Regulator System (MARS),
o Road Opening System (ROS)
(B) Distribution Information System (DIS)
DIS is an asset register of the physical `pipes' (mains and services),
which constitute the gas reticulated network. It does not currently record
domestic or commercial meter data.
(C) Contractor Management System (CMS)
CMS is a system, which records details of out-sourced contracts with
external contractors. It:
o Records rates paid to contractors
o Records payment details of claims by contractors
o Validates claims against rates charged
o Interfaces with accounts payable process
o Produces cheques for contractors against invoice
<PAGE>
o Links `jobs issued' to contractors by `planners'
o Provides data for `planners' estimating purposes
o Provides data for job estimates.
The Alliance Service Provider will be required to provide and operate a
system which has similar or equivalent functionality and outputs as CMS.
(D) Meter Management System (MTRMS)
MTRMS is a database, which records data in regard to the installation of
domestic, commercial and industrial meters.
MTRMS records:
o a `meter reference' number;
o the address location of the meter;
o the test year of the meter;
o the meter installation date;
o the initial meter index reading; and
o meter "family" history, comprising: manufacturer, make, model, size.
MTRMS also maintains data used for the "time-expired" meter exchange
program, and records details of meters, which are;
o installed at customer's premises but are not active.
o removed from customer's premises and dispatched for accuracy testing
requiring the issuing of compliance certificates.
MTRMS has interfaces to the retailers' Customer Information System (CIS),
the data being used by the retailer for billing purposes.
The Alliance Service Provider will be required to maintain similar records
using either this or a future target system within TXUN.
(E) Meter and Regulator Systems (MARS)
MARS is a database comprising an asset management register of all gas
related industrial and commercial installations relating to field and
district regulators and associated metering equipment.
The system generates maintenance schedules to ensure compliance with
statutory regulations and that the equipment is properly maintained. The
following information is recorded in the database:
o detailed location of the meter and regulator installations
o configuration of the equipment installed (engineering drawing)
o material and component specifications
o specific details of the regulator and meter
<PAGE>
o operating pressure settings
o a history of repairs and maintenance on the equipment.
The Alliance Service Provider will be required to provide input to a TXUN
database to record details of any work completed on assets associated with
industrial and commercial installations
(F) Road Opening System (ROS)
ROS is a system which:
o Records documentation relating to `road opening' notices issued to/by
local councils and other relevant authorities.
o Provides average costs for council surface restoration costs/rates.
o Records all `road opening' locations and restoration dimensions.
o Records the status of `road openings' (not-completed/completed); and
o Records payments to councils for restoration costs.
The Alliance Service Provider will be required to provide and operate a
system which has similar or equivalent functionality and outputs as ROS.
This will include the issuing and control of statutory notices and
responsibility for excavated works requiring restoration of existing
surfaces, resulting from works undertaken.
(G) Materials Management System (MMS)
The Materials Management System (MMS) tracks and monitors the movement of
materials and cost of inventory. It is predominantly used by an existing
Service Provider for construction works, and has the following modules and
functions:
o Ordering
o Stores
o Accounts Payable
o Purchasing
o Stocktake
The Alliance Service Provider will be responsible for developing and
managing its own materials inventory management system, including
procurement storage distribution and maintenance of materials allocated to
field works.
(H) Work Management System (WMS)
A Works Management System (WMS), which electronically tracks and records
work orders throughout the `life cycle' of all jobs allocated to
contractors, from inception to `close-out' for gas related work. WMS is a
client server system purchased from Andersen Consulting that manages work
carried out on the gas network. WMS includes the following modules and
functions:
<PAGE>
o Emergency Initiation
o Initiation
o Planning
o Approvals
o Scheduling
o Field Reporting
o Closure
o Preventative Maintenance
o Work Tracking
o Performance Reporting
o Table Maintenance
Collectively, these modules provide for:
o work planning, work scheduling, work co-ordination.
o reports relating to the processing of work activities (note: not
---
used for contractor payments).
o Tracking of work in progress (WIP) for future construction and
planned maintenance activities. WMS is a "job number" generator which
produces unique job reference numbers, for works undertaken on gas
mains and services, and commercial and industrial plant and equipment.
Retailers currently have direct electronic access to WMS.
The following flow diagram illustrates:
[GRAPHIC OMITTED]
WMS also produces reports on KPIs required by the Service Level Agreement
(SLA) with the Retailers, and provides data, through interfaces to
management reporting and operating systems.
o financial management system
o distribution information system (currently DIS)
o Meter and Regulator System (MARS)
The Alliance Service Provider will be required to use TXUN's systems for
works management, and provide relevant input for operational and reporting
requirements.
(ii) Electricity systems
<PAGE>
(A) AM/FM
This is an Asset Mapping & Facilities Management application developed in a
Smallworld GIS environment. It provides for the recording of the
distribution network asset attributes and their associated geographical
locations and electrical connectivity. It also provides the business
applications necessary to improve the management of the distribution
network. This application is a representation of `Network Normal'.
(B) EZYEST
An estimating tool for supporting Distribution, Construction and Stores
staff. The application assists in:
o The development of design estimates using Standard Work Units
(Compatible Units)
o Transfer Bills of Material data to PeopleSoft and Re-distribute
PeopleSoft status information
o Preparation of Unit Price sheets
o Provision of Forecast Data for Logistics
(C) CAMM
A maintenance management system that also provides an Asset and Plant
repository. It is used to schedule maintenance activities and generate
works orders that can be passed to Projects in PeopleSoft (PSWorks).
(D) AMS Realtime
Built around Schedule Publisher, this is a project management application
used to build project plans and manage the progress of the project. In
effect all works projects are monitored in this application, faults,
maintenance, minor and major projects.
(E) PSSU / DINIS
Power System Simulator Utilisation provides engineering planning support as
part of the network planning operations within Network. DINIS provides a
similar function.
(F) SCADA
SCADA as defined here relates only to the Master Station application. This
application provides remote monitoring, control and operation of the
sub-transmission network.
<PAGE>
(e) Future IT Systems to be made available by TXUN
(i) Introduction
The following information has been compiled from analysis work conducted as
part of the `Network Migration Strategy for Gas' project. The information
has been requested to be provided in draft form for consideration in the
TXUN ASP project.
The `Network Migration Strategy for Gas' project is due for completion on
24 September 1999. The following high-level migration plan for TXUN Gas
Works/Asset Management systems is therefore based on incomplete analysis.
The following provides examples of some of the considerations that may
impact the attached high-level migration plan or where further analysis is
required:
[ ] Availability of internal TXUN resources and external contractors
[ ] Y2K no implementation window
[ ] Management and Operational report delivery
A comprehensive analysis and final migration plan will be available on
completion of the `Network Migration Strategy for Gas' project.
(ii) Preliminary Timelines
The following chart provides some insight to preliminary timelines for the
migration of Gas systems to TXUN systems. Details of Task Descriptions
follow.
[GRAPHIC OMITTED]
(iii) Migration task plan descriptions
(A) PS Works
<PAGE>
Note: The migration of WMS into PS Works prior to 17 January 2000 is
required to avoid the need to interface from People Soft to the
current Westar Works Management System (WMS). The minimum requirement
is to sufficiently enhance PS Works to enable the management of
current on-going and future gas works and to transfer the current
`open' jobs data from WMS. Functionality enhancements or the transfer
of historical data may be conducted post January 17.
Define TOW & SAR Code Structure & Mapping to FLAME codes
The Type Of Work (TOW) and Standard Assets Register (SAR) codes
provide the link from the People Soft Works module to the People Soft
Calendars module to define assets and project types. PS Works business
users apply these codes, with their associated descriptions, to define
jobs and the assets employed.
A common TOW and SAR code structure needs to be defined within People
Soft for gas assets. This will enable the definition of gas jobs in PS
Works and the `mapping' of existing `jobs' from WMS to PS Works.
It is assumed that the creation of a TOW and SAR code structure, and
the mapping from existing FLAME/WMS codes, is also a task required to
be undertaken as part of the Westar-FLAME migration project.
Analysis & Design of Required Tables, Data Maps & Panels
A detailed analysis and design effort is required to define the
specific information and panels (on-line forms/interfaces) required to
manage gas jobs.
Implement & Integrate with Existing Panels (where possible)
The requirements defined in the previous task should be integrated
with the existing tables and panels used for electricity works
management where possible. For example this may include the addition
of gas assets and gas job descriptions to existing `job definition'
tables and menus.
Changes should only be made to satisfy minimum business functional
requirements to ensure there is no impact on the January 17 target.
Develop & Test New Tables & Panels - (To satisfy minimum business
requirements)
New tables and panels may be required to support `gas specific' works
management requirements.
Changes should only be made to satisfy minimum business functional
requirements to ensure there is no impact on the January 17 target.
Convert Data from WMS
The data conversion step should focus on the conversion of current
'open' jobs. This is to be completed by 17 January 2000 (Westar-FLAME
migration completion date) to avoid the need to interface from PS
Works to WMS.
<PAGE>
Develop & Test New Tables & Panels - (To satisfy all business
requirements) Required enhancements to current functionality or the
need for historical data transfer will occur post January 17.
Integrate with EzyEst
The definition of EzyEst Tasks, Compatible Units and Bill of Materials
for gas will allow the links to be established between EzyEst tasks
and PS Works job and asset codes.
(B) CAMM
Analysis & Design of Asset Structures & Maintenance Schedules
Asset structures/models within CAMM are designed to efficiently
support asset management policies/programs. Resources with gas asset
management experience will need to be involved in designing this asset
model. A `Smallworld GIS' gas model will be required to ensure the
consistency of data definitions between CAMM and AMFM.
Development / Data Mapping / Validation / Cleansing
This step will involve developing the asset model, mapping data from
the Westar source asset registers, and developing processes to clean
and validate the data.
Data Conversion / PS Works Links
Data will be extracted from a number of Westar asset registers
including DIS, MARS, REGS-DB, VALVES-DB and RTU-DB. CAMM maintenance
schedules will be linked to certain job types in PS Works.
(C) EzyEst
Analysis and Design of Tasks, Compatible Units and Bill of Materials
Structure
CMS currently holds Rate Schedules that are used to determine the
agreed price of certain works (mainly service laying) performed by
itinerant contractors. A Bill of Materials (BOM) or `materials kit' is
also available in WMS to conveniently select the appropriate set of
assets required for standard works. Also available in WMS are
Compatible Unit (CU) definitions; although they have not been used for
some time and are not up to date.
Contractor rate schedules are held in EzyEst as `psuedo-tasks'. The
BOM and CU definitions held within WMS will be used to build a gas
Compatible Unit structure within EzyEst.
Develop / Test / Implement / Data Conversion
Data will be extracted from CMS (Rates Schedule) and WMS (CU
definitions / BOM data)
<PAGE>
(D) AMFM
TXUN Gas Model Design
The Smallworld gas data model will need to be enhanced to suit TXUN's
network model. The resulting design will be used to provide consistent
data definitions for the CAMM asset management model.
Model Development & Data Mapping Definition
The GIS model will be developed to represent gas network connectivity.
Data will be mapped from the existing AutoCad database to the GIS gas
model and will incorporate data cleansing rules.
Translator set-up & Data Cleansing
The translator is a program that enforces the mapping and data
cleansing rules during data conversion.
Data Conversion
Data will be sourced from the existing Westar AutoCad database.
(E) CIS+
Analysis / Design / Develop / Test / Implement / Data Conversion
TXUN have estimated the integration of gas customers into CIS+ would
take approximately 18 months. A final decision has not yet been made
on the CIS+ integration. It is assumed for the purpose of providing an
estimate that this decision will be made in the near future and
therefore integration will be achieved by approximately April 2001.
CIS+ has the in-built functionality to perform meter movement
tracking. Domestic meter data currently held within MTRMS will be
migrated to CIS+ to support new connections and other meter movement
activities.
Migration Plan Business Workarounds
Assuming the ASP purchaser does not have an alternative system, manual
reference will need to be made to Rate Schedules and Bill of Material
definitions until EzyEst is fully implemented in April 2000.
<PAGE>
SCHEDULE 15
ADJUSTMENT MECHANISM FOR ALTERATION IN THE SERVICES
The following section identifies how the target cost will be adjusted for a
Alteration to the Services.
For the purpose of monitoring the Alliance Service Provider's performance
against the agreed annual target cost, it is intended that the annual cost be
divided into four quarterly periods for the `work scope' described in this
document. It is intended that the quarterly targets reflect variances in
seasonal and other influencing factors to clearly represent the volume of
activities to be undertaken.
For illustration purposes, the example provided below represents equal quarterly
targets of 25% of the annual target cost.
[GRAPHIC OMITTED]
Variances to the agreed quarterly target cost will be treated as follows:
(a) Decrease in scope due to normal activities
If the planned maintenance work completed at the end of the period is
behind the agreed plan, the Target Cost for the period will be reduced
pro-rata by the planned man-hours for work in backlog, and the reduction in
Target Cost carried forward and added to the Target Cost for the subsequent
period.
[GRAPHIC OMITTED]
(b) Increase in scope due to normal activities
If the planned maintenance work completed at the end of the period is ahead
of the agreed plan, the Target Cost for the period will not be increased.
The costs will be met during the period during which they are properly
incurred with the additional cumulative planned maintenance work to be
<PAGE>
carried forward and deducted from the planned maintenance work for the
subsequent period.
[GRAPHIC OMITTED]
(c) Increase in scope due to TXUN initiated Policy changes
If the planned maintenance work to be completed by the Alliance Service
Provider is altered at the direction of TXUN (for example a policy change
that results in an increase in planned maintenance), the Target Cost for
the period and subsequent periods will be increased in consultation with
the Alliance Service Provider.
[GRAPHIC OMITTED]
(d) Decrease in scope due to TXUN initiated Policy changes
If the planned maintenance work to be completed by the Alliance Service
Provider is altered at the direction of TXUN (for example a policy change
that results in a reduction in planned maintenance), the Target Cost for
the period and subsequent periods will be reduced in consultation with the
Alliance Service Provider.
[GRAPHIC OMITTED]
<PAGE>
SCHEDULE 16
NON-FINANCIAL INCENTIVE FEE
NON-FINANCIAL INCENTIVE FEE
(a) The Non-Financial Incentive Fee is based on the Annual "At Risk Amounts"
set out below.
-------------- ----------- ---------- ---------- ----------- ----------
YEAR 2000 2001 2002 2003 2004
-------------- ----------- ---------- ---------- ----------- ----------
$M 2.5 2.5 2.5 2.5 2.5
-------------- ----------- ---------- ---------- ----------- ----------
-------------- ----------- ---------- ---------- ----------- ----------
YEAR 2005 2006 2007 2008 2009
-------------- ----------- ---------- ---------- ----------- ----------
$M 3.75 3.75 3.75 3.75 3.75
-------------- ----------- ---------- ---------- ----------- ----------
The At Risk Amounts for each year from 2001 will be indexed by CPI.
(b) The At Risk Amount for the relevant year must be divided by 4 (or divided
as otherwise agreed between the parties) to obtain a "Quarterly At Risk
Amount".
(c) The Quarterly At Risk Amount must be allocated between electricity and gas
in the same proportions as the actual expenditure in that Quarter on
Operations and Maintenance Services, Replacement Capital Works Services,
TXUN Initiated Capital Works Services and Customer Initiated Capital Works
Services is divided between electricity and gas services.
(d) The Quarterly At Risk Amount for electricity must be allocated between the
electricity non-financial KPI's in accordance with the following
weightings:
---------------------------------------------------------------------------
ELECTRICITY
---------------------------------------------------------------------------
KPI Weighting [L]
------------------------------------------- -------------------------------
NETWORK RELIABILITY
------------------------------------------- -------------------------------
Network Reliability 30%
------------------------------------------- -------------------------------
CUSTOMER SATISFACTION
------------------------------------------- -------------------------------
Consumer Satisfaction 15%
------------------------------------------- -------------------------------
Owner Satisfaction 5%
------------------------------------------- -------------------------------
SAFETY
------------------------------------------- -------------------------------
Industrial Safety 10%
------------------------------------------- -------------------------------
Bushfire Mitigation 20%
------------------------------------------- -------------------------------
QUALITY
------------------------------------------- -------------------------------
Quality of Works 20%
------------------------------------------- -------------------------------
<PAGE>
(e) The Quarterly At Risk Amount for gas must be allocated between gas
non-financial KPIs in accordance with the following weightings:
---------------------------------------------------------------------------
GAS
------------------------------------------- -------------------------------
KPI Weighting [P]
------------------------------------------- -------------------------------
NETWORK RELIABILITY
------------------------------------------- -------------------------------
Network Reliability - Metro 10%
------------------------------------------- -------------------------------
Network Reliability - Country 10%
------------------------------------------- -------------------------------
CUSTOMER SATISFACTION
------------------------------------------- -------------------------------
Consumer Satisfaction 8%
------------------------------------------- -------------------------------
Customer Connections 8%
------------------------------------------- -------------------------------
Owner Satisfaction 4%
------------------------------------------- -------------------------------
SAFETY
------------------------------------------- -------------------------------
Public Safety - Metro 7am to 7pm 11%
------------------------------------------- -------------------------------
Public Safety - Metro 7pm to 7am 11%
------------------------------------------- -------------------------------
Public Safety - Country All Hours 11%
------------------------------------------- -------------------------------
Industrial Safety 7%
------------------------------------------- -------------------------------
QUALITY
------------------------------------------- -------------------------------
Quality of Works 20%
------------------------------------------- -------------------------------
(f) The Non-Financial KPIs must be measured in accordance with Schedule 18.
(g) The Alliance Service Provider will receive an amount in respect of each KPI
calculated by multiplying the "At Risk Amount" allocated to that KPI under
clauses (d) and (e) of Part B of this Schedule 17, by the relevant
percentage attributable in respect of the Alliance Service Provider's
performance in relation to that KPI, calculated in accordance with the
graph for that KPI set out in Schedule 19.
<PAGE>
SCHEDULE 17
NON-FINANCIAL KPI MEASURES
(a) Network Reliability
(i) Network Reliability (Electricity)
Measure:
Customer minutes off supply (CMOS)
Assessment Period:
12 months Rolling Average reported quarterly
Total Minutes off Supply:
Is the sum of Customer Minutes off Supply from all interruption events
during the last 12 months.
Calculation:
The number of minutes for a distribution interruption is equal to the time
period for which customers are off supply due to a distribution fault (ie
total time off supply minus time off supply due to transmission faults,
load-shedding or Force Majeure Events), divided by the total number of
customers.
TIME PERIOD OFF SUPPLY DUE TO DISTRIBUTION OUTAGE (PLANNED & UNPLANNED)
-----------------------------------------------------------------------
TOTAL NUMBER OF CUSTOMERS
(ii) Network Reliability (Gas)
The Network Reliability for Gas is divided into two sections being Metro
and Country. The definition below applies to both sections.
Measure:
Represents the complete loss of gas to individual customer's meter. It
measures the time of supply loss being reported to The Alliance Service
Provider, to the time supply is restored to the gas meter. It aggregates
all planned and ordinary unplanned supply losses arising from:
Assessment Period:
12 months Rolling Average reported quarterly.
Hours Off Supply:
Is the sum of Hours off Supply from all interruption events during the last
12 months.
Calculation of Hours:
<PAGE>
Is the total number of hours off supply for the previous 12 month period
less time relating to transmission faults or Force Majeure events divided
by the total number of customers.
HOURS OFF SUPPLY
INDEX = -----------------------
TOTAL NUMBER OF CUSTOMERS
(b) Customer Satisfaction
(i) Consumer Satisfaction (Gas)
Measure:
Customer responses regarding the performance of The Alliance Service
Provider.
Assessment Period:
12 months Rolling Average reported quarterly.
Calculation of Index:
Data sourced from end use customer questionnaire. Calculation measures
customer Complete Satisfaction with the asset maintenance and Capital
works. Complete satisfaction is the % of respondents who are not
dissatisfied with any statistically significant aspect of the service
provided
(ii) Customer Connections (Gas)
Measure:
The performance of The Alliance Service Provider in meeting target dates
for Customer Connections.
Assessment Period:
Quarterly
Calculation of Index:
Measures the ability of The Alliance Service Provider to comply with agreed
service levels. The calculation is for the proportion of connections
undertaken within the target dates
NO. OF CONNECTIONS UNDERTAKEN IN AGREED TIME
CONNECTIONS = ------------------------------------------------
TOTAL NO. OF CONNECTIONS UNDERTAKEN
(iii) Consumer Satisfaction (Electricity)
Measure:
The capability of The Alliance Service Provider to comply with customer
Guaranteed Services Levels "(GSLs)".
Assessment Period:
Quarterly
<PAGE>
Calculation of Index:
Four (4) indices are measured
o Lights repaired within < 2 days
o Connections within agreed date
o Appointments met within 15 minutes
o Interruptions, Customers provided with Min 4 days notice
Each area is measured as a percentage of the index. For example:
NO. OF CONNECTIONS UNDERTAKEN IN AGREED TIME
CONNECTIONS = -----------------------------------------------
TOTAL NO. OF CONNECTIONS UNDERTAKEN
Once calculated for each parameter, the indices are averaged to compile
the total GSL Index.
(iv) Owner Satisfaction
Measure:
The performance of The Alliance Service Provider as a "partner" in the
Alliance.
Assessment Period:
Quarterly
Calculation of Index:
Answers to a survey from TXUN and The Alliance Service Provider executives
and managers, rated as follows;
---------------------------------------- -----------
ANSWER TO THE QUESTION RATING
---------------------------------------- -----------
Always exceeds expectations 1.3
---------------------------------------- -----------
Regularly exceeds expectations 1.2
---------------------------------------- -----------
Sometimes exceeds expectations 1.1
---------------------------------------- -----------
Generally meets expectations 1.0
---------------------------------------- -----------
Sometimes fails to meet expectations 0.9
---------------------------------------- -----------
Regularly fails to meet expectations 0.8
---------------------------------------- -----------
Always fails to meet expectations 0.7
---------------------------------------- -----------
Questions are directed towards areas of a focus on savings, safety,
quality, environment, cultural/community, Alliance `health'.
Each of these areas is weighted to allow a calculation of the fee-modifying
factor or index.(Weighting yet to be agreed)
(c) Safety
(i) Public Safety (Gas)
<PAGE>
Public Safety for Gas is divided into three sections, Metro between 7AM and
7PM, Metro between 7PM and 7AM and Country `all hours'. The definition
below applies to these sections.
Measure:
This KPI measures the Alliance Service Provider's ability to respond to a
gas leak incident. It measures the number of instances where the Alliance
Service Provider did not meet the requirements.
Assessment Period:
Quarterly
Calculation of Index:
The index is simply calculated as the sum of the situations where the
Alliance Service Provider did not meet the target.
(ii) Industrial Safety
Applies to both Gas and Electricity.
Measure:
This KPI measures the Alliance Service Provider's industrial safety level.
It measures the number of LTI's per million manhours.
Assessment Period:
12 months Rolling Average reported quarterly.
Calculation of Index:
The index is simply calculated as the sum of the number of Lost Time
Injuries divided by the total number of manhours worked. The figure is
extrapolated to illustrate the number of LTI's per million manhours worked.
Different initial benchmarks will be set for electricity and gas to reflect
current performance levels.
For the first year in Electricity, the assessment of the KPI for payment of
the Non-Share of Savings Payment will exclude the measure for
subcontractors.
The measure for gas will include subcontractors in the assessment from the
commencement of the Agreement.
(iii) Bushfire Mitigation
Measure:
This KPI measures the Alliance Service Provider's preparedness for the
bushfire season and measures the level of service provision during the
bushfire season.
The target associated with this measure relates to the Bushfire Mitigation
index at the start of the Fire Season and also during the Fire Season.
Assessment Period:
<PAGE>
Measured and reported at the start of the Fire Season, weekly during the
Fire Season and quarterly during the remainder of the year.
Calculation of Index:
The bushfire mitigation index is made up of 9 specific packages of works,
divided into specific zones reflecting bushfire preparedness. The index for
each work package is calculated as follows:
[ACTUAL OUTSTANDING ITEMS
BUSHFIRE MITIGATION INDEX = ----------------------------- X MULTIPLIER
DENOMINATOR]
Multiplier:
Is the maximum index for the particular work.
Denominator:
This is the average number of items repaired per year based on
historical data collected.
Actual Outstanding Items:
The actual outstanding items yet to be repaired based on the required
timeframes to effect the repair.
Work Packages:
The following are the work packages and their respective multiplier and
timeframes:
--------------------------------------- ------------- ---------------------
WORK PACKAGE MULTIPLIER TIMING
--------------------------------------- ------------- ---------------------
Line Inspections 10 6 Months Beyond
--------------------------------------- ------------- ---------------------
Pre-Summer Inspection 1 N/A
--------------------------------------- ------------- ---------------------
Poles not Fire Safe - LL/US 30 LL > 12 weeks
US > 12 months
--------------------------------------- ------------- ---------------------
Spans Not Cleared - 55/56 20 55's > 1 week
56's > 4 weeks
--------------------------------------- ------------- ---------------------
Attachments 10 Priority 1 > 4 weeks
Priority 2 > 6 months
--------------------------------------- ------------- ---------------------
Conductors 10 Priority 1 > 4 weeks
Priority 2 > 6 months
--------------------------------------- ------------- ---------------------
EDO's Greater Than 30 years old 7 O/S > 12 months
--------------------------------------- ------------- ---------------------
Unacceptable Surge Diverters 6 O/S > 4 weeks
--------------------------------------- ------------- ---------------------
22 kV Bird Covers 6 O/S > 12 weeks
--------------------------------------- ------------- ---------------------
LL - A pole assessed to be Limited Life
US - A pole assessed to be Unserviceable
55 - A tree that in contact with the power lines
56 - A tree in the vicinity of the power lines
EDO - Expulsion Dropout Fuse Unit
O/S - Outstanding
The zones of work are as follows:
<PAGE>
Northern Section
o Benalla (NBNA)
o Seymour (NSMR)
o Wodonga (NWOD)
Central Section
o Beaconsfield (CBFD)
o Lilydale (CLDL)
o South Morang (CSMG)
Eastern Section
o Bairnsdale (EBDL)
o Leongatha (ELGA)
o Traralgon (ETGN)
The calculation of the overall index is the sum of each of the work
package indexes calculated as shown in the followingexample:
---------------------------------------------------------------------------
CONDUCTORS
---------------------------------------------------------------------------
Zone of Work Actual O/S Denominator Index
----------------------- ------------------- ------------------ ------------
CBFD 0 1 0
----------------------- ------------------- ------------------ ------------
CLDL 0 3 0
----------------------- ------------------- ------------------ ------------
CSMG 1 1 1.00
----------------------- ------------------- ------------------ ------------
EBDL 1 2 1.00
----------------------- ------------------- ------------------ ------------
ELGA 0 17 0
----------------------- ------------------- ------------------ ------------
ETGN 0 21 0
----------------------- ------------------- ------------------ ------------
NBNA 2 0 2.00
----------------------- ------------------- ------------------ ------------
NSMR 0 4 0
----------------------- ------------------- ------------------ ------------
NWOD 1 14 0.71
======================= =================== ================== ============
Total 5 63 0.79
----------------------- ------------------- ------------------ ------------
Therefore, once calculated for each work package, each of the indices
is added together to compile the Bushfire Mitigation Index.
(d) Quality
Measure:
This KPI measures The Alliance Service Provider's quality management for
works whether it be construction or O&M works for gas and electricity.
Assessment Period:
Quarterly
Electricity
Calculation of Index:
The Quality index for electricity poles and cabling projects is made up of
two (2) sections, `construction' and `pole to pit'.
Further audit programs are yet to be developed for other electricity
projects
<PAGE>
Gas
Calculation of Index:
For gas, there are six (6) sections measuring materials, asset installation
and protection, condition and calibration of equipment, testing, `as built'
records and operation of the TLPG plant at Colac.
The index is an average percentage of `points scored' across all jobs
assessed during the period of measurement.
An agreed audit program with relevant weightings will be developed by the
Alliance Team .
<PAGE>
SCHEDULE 18
KPI TARGETS
[GRAPHICS OMITTED]
<PAGE>
SCHEDULE 19
PERFORMANCE INCENTIVE FEE CALCULATION EXAMPLES
SCENARIO ANALYSIS FOR THE NETWORK SERVICES ALLIANCE AGREEMENT
SCENARIO
The following scenario is designed to represent how the payment mechanism will
operate in a real situation. All the figures are examples and do not represent
the expected or otherwise performance of the Alliance Service Provider or TXUN.
TODAY
The date is the 30 July 2002. We are at the end of the second quarter of 2002
and it is now time to complete the second profit assessment and payment for the
year of 2002 (the tenth payment of the Contract).
TARGET COST - OPERATIONS & MAINTENANCE AND REPLACEMENT CAPITAL WORKS
At the beginning of 2000, the Alliance Team had set the Target Cost to equal
$69.032 million for all the Operations, Maintenance and Replacement Capital
Works including all the Support Costs (as defined in the zero base costing
model) for the entire contract for that year.
Looking forward, this Target Cost adjusts according to CPI and for the table
below shows the adjusted Target Costs assuming CPI of 2.5% as follows:
[GRAPHIC OMITTED]
(Please note: The Target Cost will be negotiated at the start of year 2000 and
will be renegotiated at the start of year 2005)
TARGET COST - TXU & CUSTOMER INITIATED CAPITAL WORKS
<PAGE>
The setting of the Target Costs for TXU Initiated and Customer Initiated Capital
Works Projects is done prior to each specific project. In this quarter, the
Alliance Service Provider has completed 38 TXU Initiated and Customer Initiated
Capital Works Projects with Target Costs equating to $15.65 million (broken into
Target Costs of $10.457 million for Electricity and $5.193 for Gas).
There are also 12 jobs currently not completed (Works in progress) which do not
form part of the Target Cost assessment for the profit for this quarter.
ACTUAL COSTS
The actual costs incurred in the second quarter of 2002 by the Alliance Service
Provider are equal to the amounts as described in Exhibit 1. All scope has been
completed in accordance with the Alliance Service Provider submitted work plan
and there have been no TXU discretionary changes.
REIMBURSABLE COSTS
The Alliance Service Provider has been paying for actual costs from the agreed
account in which TXU have been placing one-twelfth of the agreed annual Target
Cost. Therefore, TXUN have paid the Alliance Service Provider all the
reimbursable costs.
CORPORATE OVERHEAD
The Corporate Overhead amount was agreed at the beginning of 2002 and will
divided into monthly amounts and will be paid on a monthly basis. This amount is
assumed to have been paid (on the 15th day of each month).
NON-FINANCIAL KPI INCENTIVE FEE CALCULATION
All the Key Performance Indicator data has been collected and the performance of
the Alliance Service Provider is shown tabulated in Exhibit 2 for Electricity
and Gas.
In order to calculate the Incentive Fee payable to the Alliance Service Provider
we need to calculate the proportion that each of the Non-Financial KPI
contributes. Exhibit 2 shows the calculated values for each of the KPI. It also
shows the total calculated incentive fee payable to the Alliance Service
Provider for the second quarter of 2002.
The Annual Incentive Fee for the year 2002 is listed as $7.880 million ($7.5
million adjusted for CPI). One-third of this value is attributable to the
Non-Financial Key Performance Indicators (which is equivalent to the $2.5
million part of the $7.5 million unadjusted incentive fee).
This value is firstly proportioned against the amount of Target Cost for
Electricity and Gas (seen in the calculation of [I] and [J] in Exhibit 2) and
altered to reflect the time period of one quarter of the year. The weighting is
then applied to the amount calculated to provide an amount at risk for that
quarter for each of the Key Performance Indicators.
Based on the actual performance of the Alliance Service Provider, the Incentive
Fee can be calculated with the help of the graphs provided in schedule 19 of the
<PAGE>
Network Services Alliance Agreement (Note: In Exhibit 2, the amounts are not
extrapolated from the graphs but are calculated amounts.)
MANAGEMENT FEE
The Management Fee for the first five years is $5.0 million per year. This is
paid to the Alliance Service Provider on the 15th day of each month in a monthly
amount. The payment of these monthly amounts are assumed to have been paid.
SHARE OF SAVINGS PAYMENT
In order to assess the financial performance of the Alliance Service Provider,
we need to assess the Actual Costs against the Target Costs. We have performed
this check in Exhibit 3.
The figures are based on sharing savings or over runs in the proportions of 1/3
in the O&M / Replacement Capital and 1/2 in the TXU / Customer Initiated
Capital.
ALLIANCE SERVICE PROVIDER PROFITS
The total payment received for this quarter is then equal to the Incentive Fee
plus seventy five percent of the Share of Savings Payment plus twenty five
percent of the previous period's Share of Savings Payment.
[OBJECT OMITTED]
PAYMENT MODEL
[GRAPHIC OMITTED]
<PAGE>
Exhibit 1. Alliance Service Provider Actual Costs - For 2nd Quarter 2002
[GRAPHIC OMITTED]
<PAGE>
EXHIBIT 2. NON-FINANCIAL INCENTIVE FEE CALCULATION
[GRAPHIC OMITTED]
[GRAPHIC OMITTED]
[GRAPHIC OMITTED]
<PAGE>
EXHIBIT 3. SHARE OF SAVINGS PAYMENT CALCULATION
[GRAPHIC OMITTED]
<PAGE>
Schedule 20
Technical Standards
PART A - ELECTRICITY
STANDARDS, CODES AND GUIDES RELATING TO AERIAL LINES AND SERVICES
Note. the standards listed are relevant to this Code but do not necessarily
represent all the standards that may need to be consulted in meeting the
requirements of this Code.
<TABLE>
<CAPTION>
CONDUCTORS
<S> <C>
Bare overhead--Hard - drawn copper AS 1746-1991
Bare overhead--Aluminium and aluminium alloy AS 1531-1991
Bare overhead--Aluminium & aluminium alloy--steel reinforced AS 3607-1992
Steel conductors and stays--Bare overhead: Galvanised AS 1222.1-1992
Steel conductors and stays--Bare overhead: Aluminium clad AS 1222.2-1992
Galvanised steel wire strand AS 2841-1986
INSULATED CABLES
Approval & test specification - elastomer insulated 0.6/1kV AS/NZS 3116-1996
Approval & test specification - thermoplastic insulated 0.6/1kV AS 3147-1992
Approval & test specification - neutral screened - 0.6/1kV AS/NZS 3155-1995
XLPE insulated - Aerial bundled - 0.6/1kV AS 3560-1991
Mechanical fittings for low voltage aerial bundled cable AS 3766-1990
Aerial bundled - Polymeric insulated - 6.35/11 kV, 12.7/22 kV: AS 3599.1-1988
Metallic screened Aerial bundled - Polymeric insulated -
6.35/11 kV, 12.7/22 kV :(non metallic screened) AS 3599.2-1991
Conductors - Covered overhead - 6.35/11 kV to 19/33 kV AS 3675-1993
INSULATORS
Guidelines for the design & maintenance of overhead ESAA Guide C(b)
distribution and transmission lines Selection 1-1991 Section 4
Porcelain & glass indoor and outdoor station post, U> 1000Va.c. AS 1137.3-1981
Porcelain & glass for O/H lines, U>1000V a.c.: Test methods AS 2947.1-1989
Porcelain & glass for O/H lines, U> 1000V a.c.: Characteristics AS 2947.2-1989
Porcelain & glass for O/H lines, U> 1000V a.c.: Couplings AS 2947.3-1995
Porcelain & glass, pin & shackle U <1000V AS 3608-1989
Porcelain stay type U > 1000V AS 3609-1989
INSULATOR AND CONDUCTOR FITTINGS
For overhead lines: Performance and general requirements AS 1154.1-1985
For overhead lines: Dimensions AS 1154.2-1985
For overhead lines: Performance and general requirements for AS 1154.3-1985
helical fittings
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
THERMAL LIMITS
Guidelines for the design & maintenance of overhead ESAA C(b) 1-1991
distribution and transmission lines: Thermal limits Appendix A2
Current rating of bare overhead line conductors ESAA D(b)5-1988
SHORT CIRCUIT CAPACITY
Guidelines for the design & maintenance of overhead ESAA C(b) 1-1991
distribution and transmission lines: Fault ratings Appendix A2
MECHANICAL LOADING CONDITIONS
Guidelines for the design & maintenance of overhead ESAA C(b) 1-1991
distribution and transmission lines Mechanical Loading Section 3
Conditions,
Minimum design loads on structures (Loading Code) AS 1170
Dead & live loads AS 1170.1-1989
Wind loads AS 1170.2-1989
Snow loads AS 1170.3-1990
Earthquake loads AS 1170.4-1993
CONDUCTOR TENSIONS
Guidelines for the design & maintenance of overhead
distribution and transmission lines
General ESAA C(b) 1 - 1991
Section 6
Calculations ESAA C(b) 1-1991
Appendix B
STRUCTURES AND FOOTINGS
Guidelines for the design & maintenance of overhead ESAA C(b) 1-1991,
distribution and transmission lines Sections 7 & 8 and
General Appendix C
Methods of testing soils for engineering purposes AS 1289 (set)
Piling - Design and installation AS 2159-1995
Timber Structures (Timber structures code) AS 1720
Design methods AS 1720.1-1988
Timber properties AS 1720.2-1990
Timber - Poles for overhead lines AS 2209-1994
Timbers - Classification into strength groups AS 2878-1986
Cross arms Eastern and South Eastern Australian hardwoods AS O61-1955
Design of steel lattice towers & masts AS 3995-1994
Steel structures AS 4100-1990
Concrete structures AS 3600-1991
CLEARANCES FROM GROUND
Guidelines for the design & maintenance of overhead ESAA C(b) 1-1991
distribution and transmission lines - Environmental & loading Section 9
conditions
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
CLEARANCES FROM STRUCTURES
Guidelines for the design & maintenance of overhead ESAA C(b) 1-1991
distribution and transmission lines - Environmental & loading Section 10
conditions
SPACING OF CONDUCTORS
Guidelines for the design & maintenance of overhead ESAA C(b) 1-1991
distribution and transmission lines - Clearances Section 11
- Environmental & loading conditions ESAA C(b) 1-1991
Section 11
MAINTENANCE
Guidelines for the design & maintenance of overhead ESAA C(b) 1-1991
distribution and transmission lines - Maintenance and Appendix E
inspection procedures
STANDARDS, CODES AND GUIDES RELATING TO UNDERGROUND LINES AND SERVICES
Note: The standards listed are relevant to this Code but do not necessarily
represent all the standards that may need to be consulted in meeting the
requirements of this Code.
HIGH VOLTAGE CABLES
Polymeric Cables 3.3 kV to 33 kV AS 1429.1-1993
Impregnated paper insulated - U< 33 kV AS 1026-1992
Underground residential systems AS 4026-1992
Extruded solid dielectric - 1kV to 30kV IEC 502-1994
Tests for solid dielectric cables 30 kV to 150 kV IEC 840-1988
LOW VOLTAGE CABLES
Impregnated paper insulated - U< 33 kV AS 1026-1992
Conductors in insulated cables and flexible cords AS 1125-1993
Concentric wire neutral - XLPE insulated - 0.6/1kV AS 1178-1986
Approval & test specification - elastomer insulated - 0.6/1kV AS 3116-1996
Approval & test specification - thermoplastic insulated - .6/1kV AS 3147-1992
Approval & test specification -neutral screened - 0.6/1kV AS/NZS 3155-
1995
Underground residential systems AS 4026-1992
HIGH VOLTAGE CABLE ACCESSORIES
High Voltage Cable Joints ANSI/IEEE 404-1994
High Voltage Cable Terminations ANSI/IEEE 48-1990
Separable insulated connectors - U>1kV AS 2629-1983
CONTINUOUS CABLE RATINGS
Calculation methods IEC 287-1982
Selection of cables - U< 0.6/ 1kV AS 3008.1-1989
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
SHORT CIRCUIT CURRENTS
Calculation of Short Circuit Currents IEC 949-1988
INSTALLATION
ESAA Guide to the Installation of Underground Cables ESAA C(b) 2 -
1989
ESAA Guide to the Use of Separable Connectors ESAA D(b) 30-1983
Code of Practice for Safety Precautions in Trenching Operations
Co ordination of Street Works, Code of Practice--1983
Shared trench Agreement. Telecom SECV--1973
MAINTENANCE
ESAA Guide for the Maintenance of High Voltage Paper Oil ESAA D(b) 31-1989
Insulated Cables and Accessories
STANDARD, CODES AND GUIDES RELATING TO SUBSTATIONS
Note. The standards listed are relevant to this Code but do not necessarily
represent all the standards that may need to be consulted in meeting the
requirements of this Code.
ELECTRICAL DESIGN
Switchgear assemblies & ancillary equipment - U > 1kV - General AS 2067-1984
CIRCUIT BREAKERS AND ANCILLARY EQUIPMENT
Classification of degrees of protection provided by enclosures AS 1939-1990
for electrical equipment (IP code)
High voltage, a.c. Switchgear & control gear -circuit breakers AS 2006-1986
U > 1000 volts
SWITCHGEAR ASSEMBLIES AND ANCILLARY EQUIPMENT
High voltage, a.c. Switchgear & control gear -
Switches and disconnectors - 1 kV to 52 kV AS 1025.1-1984
Switches and disconnectors - U > 52 kV AS 1025.2-1989
Isolators and earthing switches AS 1306-1985
Fuse/ switch & fuse / circuit breaker combinations AS 2024-1991
Common requirements AS 2650-1986
A.C. metal enclosed switch gear & control gear - 1 kV to 72.5 kV AS 2086-1995
A.C. insulation enclosed switchgear - 1 kV to 38 kV AS 2264-1995
Switchgear assemblies & ancillary equipment - U > 1 kV AS 2067-1984
Classification of degrees of protection provided by enclosures AS 1939-1990
for electrical equipment (IP code)
Insulating oil for transformers and switchgear AS 1767-1975
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
CONTROL EQUIPMENT
Low voltage switchgear & control gear: AS 3947
General rules AS 3947.1-1993
Switches, disconnectors, switch disconnectors and fuse AS 3947.3-1994
combination units
Contactors and motor starters: Electromechanical contactors AS 3947.4.1-1995
and motor starters
Circuit control devices and switching elements AS 3947.5.1-1995 :
Electromechanical control circuit devices
Control circuit devices and switching elements: Proximity AS 3947.5.2-1995
switches
INSULATING PANELS
Sheets and Boards for electrical purposes
Classification and general requirements AS 1795.1-1983
Dimensions of switchboard panels AS 1795.2-1983
POWER TRANSFORMERS
Power Transformers AS 2374
General requirements AS 2374.1-1982
Temperature rise AS 2374.2-1982
Insulation Levels and dielectric tests:
General requirements AS 2374.3.0-1982
External clearances in air AS 2374.3.1-1992
Tappings and connections AS 2374.4-1982
Ability to withstand short circuit AS 2374.5-1982
Determination of transformer and reactor sound levels AS 2374.6-1994
Insulating oil for transformers and switch gear AS 1767-1975
BUSHINGS
Bushings for a.c. U> 1000 V AS 1265-1990
SURGE ARRESTERS
Surge Arresters (diverters):
Silicon carbide type for a.c. systems AS 1307.1-1986
Metal oxide type for a.c. systems AS 1307.2-1987
BATTERIES
Stationary batteries
Lead acid - vented type AS 4029.1-1994
Lead acid - valve regulated sealed AS 4029.2-1992
Stationary batteries - lead acid -pure lead positive pasted type AS 4029.3-1993
INSULATION CO ORDINATION
Insulation Co ordination
Definitions, principles and rules AS 1824.1-1995
Phase to earth & phase to phase: Application Guide AS 1824.2-1985
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
Insulation coordination within LV systems: Principles, IEC 664.1-1992
requirements and tests
SAFETY CLEARANCES
Classification of degrees of protection provided by enclosures AS 1939-1990
for electrical equipment (IP code)
Switchgear assemblies & ancillary equipment - U >1kV AS 2067-1984
BUILDINGS AND ENCLOSURES
Australian Building Code
Fixed platforms, walkways, stairways & ladders: Design AS 1657-1992
construction & installation
The use of mechanical ventilation & air conditioning in buildings
Fire and smoke control AS 1668.1-1991
Mechanical ventilation for acceptable indoor air quality AS 1668.2-1991
Classification of degrees of protection provided by enclosures AS 1939-1990
for electrical equipment (IP code)
The storage and handling of flammable and combustible materials AS 1940-1993
Oil containment Environmental
Protection
Authority.
Victoria Building
Guidelines
Fire protection of electricity substations ESAA D(b) 29-1982
Electrical Installations
Secondary batteries installed in buildings - Vented cells AS3011.1-1992
Secondary batteries installed in buildings - Sealed cells AS 3011.2-1992
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
SWITCHYARD STRUCTURES, FOOTINGS AND FOUNDATIONS
Minimum design loads on structures (Loading Code) AS1170
Dead & live loads AS 1170.1-1989
Wind loads AS 1170.2-1989
Snow loads AS 1170.3-1990
Earthquake loads AS 1170.4-1993
Design of steel lattice towers & masts AS 3995-1994
Steel structures AS 4100-1990
Concrete structures AS 3600-1994
MAINTENANCE
Guide to maintenance & supervision of insulating oils in AS 1883-1992
service
Maintenance of electrical switchgear AS 2467-1981
Guide to the installation, maintenance, testing and
replacement of secondary cells in buildings:
Vented cells AS 2676.1-1992
Sealed Cells AS 2676.2-1992
STANDARDS, CODES AND GUIDES RELATING TO PROTECTION AND EARTHING SYSTEMS
Note. The standards listed are relevant to this Code but do not necessarily
represent all the standards that may need to be consulted in meeting the
requirements of this Code
PROTECTION
All or nothing electrical relays AS 2481-1981
Voltage transformers for measurement and protection AS 1243-1982
Current transformers for measurement and protection AS 1675-1986
Low voltage Switchgear & control gear: AS 3947-1993
General rules AS 3947.1-1993
Switches. disconnectors, switch disconnectors and fuse AS 3947.3-1994
combination units
Contactors and motor starters: Electromechanical contactors AS 3947.4.1-1995
and motor starters
Circuit control devices and switching elements: AS 3947.5.1-1995
Electromechanical control circuit devices
Control circuit devices and switching elements: Proximity AS 3947.5.2-1995
switches
EARTHING
Switchgear assemblies & ancillary equipment - U > 1kV AS 2067-1984
Appendix C
Substations, earthing guide ESAA EG 1-1995
Guide to safety in substation grounding IEEE 80-1986
Customer installations AS 3000-1991 and
AS 3001-1990
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
Guidelines for the design & maintenance of overhead ESAA C(b) 1-1991
distribution and transmission lines - Stay wires
Section 13 Step & touch potentials ESAA C(b) 1- 1991
Section 13
Switchgear assemblies & ancillary equipment - U > 1kV AS 2067-1984
Appendix C2.6
ESAA - Australian Telecommunications Commission "Earth
Potential Rise" Code of Practice
ESAA - Australian Telecommunications Commission "Earth
Return High Voltage Power Lines" Code Of Practice.
MAINTENANCE
Switchgear assemblies & ancillary equipment - U > 1kV AS 2067-1984
Electrical installations AS 3000-1991
Guide to safety in substation grounding IEEE 80-1986
Guidelines for the design & maintenance of overhead ESAA C(b) 1- 1991
distribution and transmission lines
ESAA - Australian Telecommunications Commission "Earth
Potential Rise" Code of Practice
ESAA - Australian Telecommunications Commission "Earth
Return
High Voltage Power Lines" Code of Practice
TESTING
Earthing AS 3000-1991
IEEE 80-1986
ESAA C(b) 1-1991
</TABLE>
PART B - GAS
AUSTRALIAN STANDARDS PERTAINING TO THE GAS INDUSTRY
This list should be used as a guide only and may not necessarily contain all
applicable standards.
B00037 AS 2885-1987 Pipelines Gas and Liquid Petroleum
B00038 AS Supplement to 4084-1993 Steel Racking- Commentary
B00039 AS 4084-1993 Steel Racking
B00040 AS 3788-1990 Boilers and Pressure Vessels In-Service Inspection
B00041 AS/NZS 3788-1996 Standard Pressure Equipment In-Service Inspection
B00042 AS 3500.4-1994 National Plumbing and Drainage Code Hot Water
B00043 AS 2971-1987 Serially Produced Pressure Vessels
B00044 AS 3000-1991 Electrical Installations-Buildings, Structures & Premises
B00045 AS 2865-1995 Safe Working in a Confined Space
B00046 AS 2885-1987 Pipelines Gas and Liquid Petroleum
<PAGE>
B00047 AS 2885.2-1987 Pipelines Gas and Liquid Petroleum Part 2 Welding
B00048 AS 2812-1985 Welding, Brazing and Cutting of Metals Glossary Terms
B00049 AS 2738.3-1984 Copper & Copper Alloys Part 3 Cast Products
B00050 AS 2738.2-1984 Copper & Copper Alloys Part 2 Wrought Products
B00051 AS 2738.1-1984 Copper & Copper Alloys Part 1 Refinery Products
B00052 AS 2544-1982 Grey Iron Pressure Pipes and Fittings
B00053 AS 2528-1982 Bolts, Studbolts & Nuts for Flanges and Other High
and Low Temperature Applications
B00054 AS 2430.1-1987 Part 1 Explosive Gas Atmospheres
B00055 AS 2430.2-1986 Part 2 Combustible Dusts
B00056 AS 2430.3-1991 Part 3 Specific Occupancies
B00057 AS 2337.3-1987 Gas Cylinder Test Station Part 3 Inspection and
Testing of Fibre Reinforced Plastics Alloy Gas Cylinders Hoop
Overwrapped
B00058 AS 2337.1-1987 Gas Cylinder Test Station Part 1 General
Requirements, and Tests Gas Cylinders
B00059 AS 2290.3-1990 Electrical Equipment for Coal Mines-Maintenance and
Overhaul Part 3 Maintenance of Gas Detecting and Monitoring Equipment
B00060 AS 2286-1989 Space Heating Appliances Secondary Guards
B00061 AS 2285-1989 Space Heating Appliances External Temperature
Limits and Primary Guards
B00062 AS 2275 Paarts 1 & 2 - 1979 Combustible Gas Detection Instruments
for Use in Explosive Atmospheres
B00063 AS 2187.1-1984 SAA Explosive Code Part 1 Storage and Land
Transport
B00064 AS 2129-1982 Flanges for Pipes Valves and Fittings
B00065 AS 2033-1980 Installation of Polyethylene Pipe Systems
B00066 AS 2032-1977 Installation of UPVC Pipe Systems
B00067 AS 2031.1-1989 SAA Gas Cylinders Code Part 1 Cylinders for
Compressed Gases other than Acetylene
B00068 AS 2030.3-1982 The Approval Filling Inspection Testing and
Maintenance of Cylinders for the Storage and Transport of Compressed
Gases Non-Refillable Cylinders for Cpompressed Gases
B00069 AS 2030.1-1989 SAA Gas Cylinders Code Part 1 Cylinders for
Compressed Gases other than Acetylene
B00070 AS 2030-1986 Supplement Foreign Gas Cylinders Specifications
B00071 AS 2002-1987 Solar Water Heaaters Installation
B00072 AS 1978-1977 Field Pressure Testing of Pipelines
B00073 AS 1940-1988 The Storage and Handling of Flammable and Combustible
liquids
B00074 AS 1885-1976 Recording and Measuring Work Injury Experience
B00075 AS 1869-1983 Hose and Hose Assemblies for Liquefied Petroleum
Gases (LPG) Natural Gas and Town Gas
B00076 AS 1832-1985 Iron Castings Maalleable Cast Iron
B00077 AS 1796-1983 SAA Welder Certification Code
B00078 AS 1769-1975 Welded Stainless Steel Tubes for Plumbing Applications
B00079 AS 1724-1983 Part 2 Grey Iron Pressure Pipes and Fittings with
Bolted Gland Joints Part 2 Soft Metric Series for Maintenance Purposes
B00080 AS 1724-1975 Cast Grey Iron Pressure Pipes and Fittings with
Bolted Gland Joints Metric Units
<PAGE>
B00081 AS 1722-1975 Part 2 Pipe Threads of Whitworth Form
Part 2 Fastening Pipe Threads
B00082 AS 1722-1975 Part 1 Pipe Threads of Whitworth Form
Part 1 Sealing Pipe Threads
B00083 AS 1596-1989 LP Gas Storage and Handling
B00084 AS 1674-1980 Fire Precautions in Cutting Heating and Welding
Operations
B00085 AS 1674-1974 SAA Cutting and Welding Safety Code
B00086 AS 1657-1985 SAA Code for Fixed Platforms Walkways Stairways
and Ladders
B00087 AS 1645-1974 Copper and Copper Alloy Compression Fittings for use in
water supply and hot water services
B00088 AS 1628-1977 Copper Alloy Gate Valves and Non-Retune Valves for use
in water supply and hot water services
B00089 AS 1596-1983 SAA LP Gas Code
B00090 AS 1590-1982 Copper Alloy Threaded Pipe Fittings for use with Tubes
Threaded With Pipe Threads of Whitworth Form
B00091 AS 1585-1982 Capillary and Brazing Fittings of Copper / Copper Alloy
B00092 AS 1572-1985 Copper / Copper Alloy Seamless Tubes for
Engineering Purposes
B00093 AS 1530.4-1997 Methods for Fire Tests on Building Materials
Components and Structures Part 4 Fire-Resistance tests of Elements
of Build. Const.
B00094 AS 1518-1979 Extruded High - Density Polyethylene Protective
Coating for Pipes
B00095 AS 1530.3-1982 Methods for Fire Tests on Building Materials
Part 3 Test for Early Fire Hazard Properties of Materials
B00096 AS 1530.1-1984 Methods for Fire Tests on Building Materials
Part 1 Combustibility Test for Materials
B00097 AS 1530.2-1973 Methods for Fire Tests on Building Materials
Part 2 Test for Flammability of Materials
B00098 AS 1529-1974 Installation Household Type Hot Water Supply System
B00099 AS 1477.1-1988 Unplasticized PVC (pipes) and Fittings for Pressure
Applications Part 1 Pipes
B00100 AS 1477.4-1988 Unplasticized PVC (upvc) Pipes and Fittings for
Pressure Applications Part 4 Post formed bends
B00101 AS 1477.1 - 61973 Unplasticized PVC (upvc) Pipes and Fittings for
Pressure Applications Part 1 to 6
B00102 AS 1345-1995 Identification Conduits and Ducts
B00103 AS 1697-1981 SAA Gas Pipeline Code
B00104 AS 1697-1979 SAA Gas Pipeline Code
B00105 AS 1210-1997 Pressure Vessels
B00106 AS 1210-1989 SAA Unfired Pressure Vessels Code
B00107 AS 1470-1986 Health and Safety at Work Principles & Practices
B00108 AS 1464. 1-2-1984 Plastics Pipes and Fittings for Gas Reticulation
Unplasticized PVC (UPVC) Part 1 Pipes Part 2 Fittings
B00109 AS 1460-1973 Mechanical Jointing Fittings for Use With
Polyethylene Pressure Pipes
B00110 AS 1432-1983 Copper Tubes for Water Gas and Sanitation
<PAGE>
B00111 AS 1432-1990 Copper Tubes for Plumbing Gasfitting and Drainage
Applications
B00112 AS 1397-1984 Steel Sheet and Strip Hot Dipped Zink-Coated or
Aluminium Zink-Coated
B00113 AS 1357.2-1988 Water Valves for Use with Unvented Water Heaters
Part 2 Control Valves
B00114 AS 1357.1-1988 Water Valves for Use with Unvented Water Heaters
Part 1 Protection Valves
B00115 AS 1319-1983 Safety Signs for the Occupational Environment
B00116 AS 1318-1985 SAA Industrial Safety Colour Code
B00117 AS 1279-1985 Copper Refinery Shapes
B00118 AS 1271-1982 Valves Water Gauges and Other Fittings for Boilers and
Unfired Pressure Vessels
B00119 AS 1170.1-1989 SAA Loading Code Part 1 Dead and Live Loads and
Load Combinations
B00120 AS 1167.2-1986 Welding and Brazing Filler Metals Part 2 Filler Metal
for Welding
B00121 AS 1159-1988 Polyethylene Pipes for Pressure Applications
B00122 AS 1141-1974 Methods for Sampling and Testing Aggregates
B00123 AS 1135-1973 SAA Non-Ferrous Pressure Piping Code
B00124 AS 1074-1989 Steel Tubes and Tubulars for Ordinary Service
B00125 AS 1000-1979 The International System of Units (SI) and its
Application
B00126 AS A.72-1954 Control Plug Cocks for Low Pressure Gas
B00127 AS CA69-1972 Installation of Polyethylene Pipe Systems
B00128 AS CA67-1972 Installation of PVC Pipe Systems
B00129 AS CB15.5-1968 SAA Pipe Welding Code Part 5 Flash Butt Welding
of Steel Pipes and Tubes
B00130 AS CB18.1-1967 SAA Pressure Piping Code Part 1 Ferrous Piping
B00131 AS CB15.3-1967 SAA Pipe Welding Code Part 3 ARC Welding of
Ferritic Steel Piping
B00132 AS CB15.3-1967 SAA Pipe Welding Code Part 3 ARC Welding of
Ferritic Steel Piping
B00133 AS CB15.1-1970 SAA Pipe Welding Code Part 1 Oxy Acetylene
Welding of Ferritic Steel Piping
B00134 AS CB15.1-1970 SAA Pipe Welding Code Part 1 Oxy Acetylene
Welding of Ferritic Steel Piping
B00135 AS Z5.2-1968 Welding Terms and Symbols British Standard
499.3-1965
B00136 British Standard 437.1-1970 Cast Iron Spigot and Socket Drain Pipes
and Fittings Part 1 Pipes, Bends, Branches and Access Fittings
B00137 AS MH1-1972 Metric Conversion in Building and Construction
B00138 Australian/New Zealand Standard 3760-1996 In-Service Safety
Inspection and Testing of Electrical Equipment
B00139 Report of the Task Group on Coiled PE Pipe
B00140 British Standard 5155-1984 Specification for Butterfly Valves
B00141 British Standard 5158-1989 Specification for Cast Iron Plug Valves
B00142 British Standard 4368.3-1974 Specification for Carbon and Stainless
Steel Compression Couplings
<PAGE>
B00143 British Standard 4127.2-1972 Specification for Light Gauge
Stainless Steel Tubes
B00144 British Standard 2051.2-1984 Tube and Pipe Fittings for Engineering
Purposes Part 2 Olive Type Copper Alloy Compression Tube Fittings
B00145 British Standard 2051.1-1973 Tube and Pipe Fittings for Engineering
Purposes Part 1 Copper and Copper Alloys Capillary and Compression
Tube Fittings for Engineering
B00146 British Standard 1845-1984 Specification for Filler Metals For Brazing
B00147 British Standard 1640.4-1968 Specification for Steel Butt-Welding
Pipe Fittings Part 4 Wrought and Cast Austenitic Chromium-nickel Steel
Fittings
B00148 British Standard 1640.3-1968 Specification for Steel Butt-Welding
Pipe Fittings Part 3 Wruoght Carbon and Ferritic Alloy Steel Fittings
B00149 British Standard 1640.2-1962 Specification for Steel Butt-Welding
Pipe Fittings Part 2 Wrought and Cast Austenitic Chromium-nickel Steel
Fittings
B00150 British Standard 1640.1-1962 Specification for Steel Butt-Welding
Pipe Fittings Part 1 Wruoght Carbon and Ferritic Alloy Steel Fittings
B00151 British Standard 1560.2-1970 Specification for Steel Pipe Flanges
Part 2 Metric Dimen.
B00152 British Standard 4368.1-1972 Specification for Carbon and
Stainless Steel Compression Couplings for Tubes Part 1 Heavy Series
B00153 British Standard 1740.1-1971 Specification for Wrought Steel Pipe
Fittings ( Screwed BSP Thread )
B00154 British Standard 143 & 1256-1968 Specification for Malleable Cast
Iron & Copper Alloy Screwed Pipe Fittings for Steam Air Water Gas and
Oil
B00155 Standard for Welding Pipe Lines and Related Facilities
B00156 Chemical Testing 1991
OTHER GAS STANDARDS AND SPECIFICATIONS
Document numbers beginning with the letter TS are known as Technical Standards
Document numbers beginning with the letter SP are known as Technical
Specifications Document numbers beginning with the letter CPS are documents
owned by Corrosion Protection Services.
<PAGE>
<TABLE>
<CAPTION>
NO. TITLE DATE ISSUE
<S> <C> <C> <C>
0000-1299 ADMINISTRATIVE
TS 0500 Staff Participation in Committee and Drafting 1/03/1992 1
------- work of Standards Aust and AGA
TS 0502 Emergency Response Procedures 18/01/1997 2
-------
TS 0503 Gas Incident/Installation Reporting and 5/11/1999 3
------- Analysis
TS 0506 Melbourne One Call Protocol 8/03/1995 1
-------
TS 0507 Change Management 31/07/1995 1
-------
TS 0511 Refurbished Appliances (Type A) 3/03/1996 1
-------
1300-2299 CIVIL ENGINEERING
TS 1300 Site Drainage 1/10/1991 1
-------
TS 1301 Prevention of Soil Erosion 1/10/1991 1
-------
TS 1302 Trade Waste and Effluent Discharge 1/09/1991 1
-------
TS 1305 Design of Pits, Vaults and Kiosks 14/04/1994 1
-------
TS 1308 Construction of Site Works for Industrial and 24/10/1995 1
------- Commercial Metering/Regulating Installations
(LP/MP/HP Inlet Pressures)
SP 1600 Construction of Gas Supply Pipework 5/12/1998 1
-------
SP 1601 Pipe Bedding Material 23/09/1998 1
-------
2300-2599 CORROSION MITIGATION
SP 2300 Heat Shrink Pipe-Sleeves 14/06/1991 1
-------
SP 2301 PE Overwrap to Protect Petrolatum Base Tape 11/03/1991 1
-------
CPS 2303 Cothodic protection of underground gas 30/06/1997 1
-------- vessels, pipework and components
SP 2304 Coating of Buried Valves and Fittings - 1/08/1991 1
Transmission Pipelines
CPS 2305 Application of coating of transition with 30/06/1997 1
-------- above ground TP pipework
CPS 2307 Repair of fusion bonded repair coupling 13/10/1998 1
--------
CPS 2308 Protection from electrical surges and induxed 30/06/1997 1
-------- voltages on gas pipelines
SP 2309 Crushed Metallurgical Coke for Carbonaceous 13/10/1992 1
Backfill
CPS 2310 Selecting systems for coating above ground 30/06/1997 1
-------- steelwork
TS 2311 Responsibilities for Above Ground Licensed and 14/12/1994 1
------- TP Meter/regulator Installations
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NO. TITLE DATE ISSUE
<S> <C> <C> <C>
CPS 2312.1 Protective coating of steel Part 1 - General 30/06/1997 1
----------
CPS 2312.2 Protective coating of steel Part 1 - Above 30/06/1997 1
---------- ground pipework - standard
CPS 2312.3 Protective coating of steel Part 1 - Above 30/06/1997 1
---------- ground pipework - Premium
CPS 2312.4 Protective coating of steel Part 1 - Above 30/06/1997 1
---------- ground pipework - Maintenance
CPS 2312.5 Protective coating of steel Part 1 - Above 30/06/1997 1
---------- ground pipework - Insulating flanges
SP 2313 Petrolatum Coating Materials 29/08/1995 2
CPS 2314 Cathodic protection - Distribution systems 30/06/1997 1
--------
CPS 2315 Cathodic protection - Transmission systems 1/03/1998 1
--------
2600-2899 DRAFTING
TS 2601 Field Recording of Special Crossings 2/08/1995 3
-------
TS 2612 Procedure for identifying the need for an 18/12/1992 1
------- easement for reticulation mains
TS 2613 Recording of mains information 29/05/1998 2
-------
TS 2614 Drawing number system 12/04/1994 1
-------
2900-3999 ELECTRICAL ENGINEERING
TS 2901 Earthing of Vessels and Holders 7/12/1993 1
-------
TS 2902 Earthing of Tanker Transfer Points 7/12/1993 1
-------
TS 2904 Maintenance of Batteries 1/07/1991 1
-------
4000-4299 DISTRIBUTION
TS 2607 Conditions for Works Near Gas Transmission 24/05/1999 3
------- Pipelines and Mains
TS-2607.1 Conditions for Works Near Gas Mains and 24/05/1999 3
--------- Infrastructure (If distributing this document
it must be printed on company letterhead)
TS 2607.2 Conditions for Works Near Gas Transmission 24/05/1999 3
--------- Pipelines (If distributing this document it
must be printed on company letterhead)
TS 2607.3 Conditions for the use of Explosives near Gas 24/05/1999 3
--------- Transmission Pipelines and Mains (If
distributing this document it must be printed
on company letterhead)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NO. TITLE DATE ISSUE
<S> <C> <C> <C>
TS 4000 City High Pressure System (Design and 1/05/1991 1
------- Construction)
TS 4001 Design of Gas Pipework on Bridge Crossings to 1/05/1991 0
------- 515kPa
TS 4004 Valves in Systems Operating at Less than 515 1/08/1991 1
------- kPa
TS 4005 Design Temperatures for System Components 1/02/1991 1
-------
SP 4008 Steel Fittings - Butt Weld HP Pipework 11/03/1999 1
-------
SP 4009 Steel Flanges - Weldolets Threadolets HP 11/03/1991 1
------- Pipework
SP 4011 Service Valves - High Pressure DN15 to DN20 29/05/1995 3
(Internal Inlet Thread, External Outlet Thread)
SP 4012 Gaskets - Compressed Fibre to R/F Flanges 4/08/1994 2
SP 4013 Service Valves (LP) - DN25 - F/M 11/03/1999 1
-------
SP 4014 Service Valves (HP) - DN20 Internal Threads 29/05/1995 3
SP 4015 Coating Paint for Pipe and Casing 11/03/1999 1
-------
SP 4016 Solvent Cement for UPVC Pipe and Fittings 11/03/1999 1
-------
SP 4017 Steel Table Flanges 11/03/1991 1
-------
SP 4018 Casing Pipe 11/03/1999 1
-------
SP 4019 Mechanical Couplings for PE Pipe (200 and 450 11/03/1991 1
------- kPa)
SP 4020 Service Valves High Pressure - DN25 Internal 1/05/1995 2
Threads
SP 4021 Gaskets - Nitrile for F/F Flanges 11/03/1991 1
-------
SP 4022 Welding Three-way-tees and Stop-offs - HP 11/03/1991 1
-------
SP 4023 Mechanical Insulating Pipe Couplings 11/03/1991 1
-------
SP 4024 Stainless Steel Repair Clamps DN50 to DN450 - 11/03/1991 1
------- LP/HP
SP 4025 Monolithic Insulating Joints 18/05/1991 2
-------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NO. TITLE DATE ISSUE
<S> <C> <C> <C>
SP 4026 Service Valves (LP) DN32 F/M 11/03/1991 1
-------
SP-4027 Inlet and Outlet Manifolds and Piping Spools 11/03/1991 1
------- for Regulator Assemblies (HP/TP)
SP 4028 Transmission and Distribution Steel and Cast 1/03/1991 1
------- Iron Valves
SP 4029 Polyethylene (PE) Couplings - Electrofusion 9/11/1993 2
SP 4030 Polyethelene (PE) Yellow Pipe 31/05/1999 6
-------
SP 4031 Purchase specification - control units - 1/09/1989 1
------- electrofusion
SP 4032 UPVC Pipe 29/07/1991 2
-------
TS 4033 Additional Service Isolation Valves 1/12/1995 2
-------
SP 4034 UPVC Fittings 11/03/1991 1
-------
SP 4035 Polyethylene (PE) Fittings (Fusion) 13/01/1999 3
-------
TS 4037 Use of Stainless Steel Repair Clamps 22/06/1993 2
-------
SP 4039 External Application of FBE Coating to HP 11/03/1991 1
Steel Pipe
SP 4041 Coating of Steel Page - External and Internal 5/06/1995 6
SP 4045 Pipe - Steel - Zaplock - HP 1/05/1982 1
-------
SP 4047 Application of Extruded Polyethylene Coating 1/12/1977 1
------- to Steel Pipe
SP 4048 Application of Protective Enamel Coating to 11/03/1991 1
------- Steel Pipe
SP 4049 Internal Lining, External Priming and 11/03/1991 1
------- Application of protective Enamel Coating to
Steel Pipe
SP 4050 Application of Fusion Bondced Low Density 11/03/1991 1
-------
Polyethylene Coating to Steel Pipe
SP 4051 Fittings - Steel Bends 24/06/1992 3
-------
SP 4053 Fittings - Large Diameter Butt Weld for 11/03/1991 1
-------
Pipeline Construction
SP 4054 Road Transport of Extruded Polyethylene Coated 11/03/1991 1
Pipe
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NO. TITLE DATE ISSUE
<S> <C> <C> <C>
SP 4055 Fittings - Split Tees 11/03/1991 1
SP 4056 Unplasticised PVC Pipe and Fittings for LP 11/03/1991 1
-------
SP 4057 Bolted Mechanical Couplings - 7kPa Maximum 1/01/1994 2
SP 4058 Canvas Covered Gas Main Bags 11/03/1991 1
-------
SP 4059 Under Pressure Tapping Reinforcement Sleeve 11/03/1991 1
-------
TS 4060 Selection of Bedding Materials for Pipe Systems 11/03/1991 1
-------
TS 4061 Internal Lining of Pipe - HP 18/03/1991 1
-------
TS 4062 Land Conservation and Pipework 18/03/1991 1
-------
TS 4063 Valve security 21/02/1992 1
-------
SP 4064 Fittings - Plastic Compression LP-MP Services 1/06/1991 1
TS 4065 Design of Sensing Lines and Bleed Valve 7/10/1991 1
------- Connections
TS 4066 Recording of Assets in the Field (Mains and 1/08/1991 1
Services)
TS 4067 Management of Major Transmission and 20/08/1991 1
------- Distribution Projects
SP 4068 Design for Blanking Spades (up to 10000 kPa) 30/07/1991 1
-------
TS 4070 Storage of Polyethylene Coated Pipe - Stock 1/09/1991 1
------- Rotation
TS 4071 Buried Plastic Pipe- Marker Tape and Tracer 1/11/1996 3
-------
Wire Detection
TS 4072 Flanged Joints 15/06/1995 1
-------
TS 4073 Colour Code for Valve and Syphon Covers 5/08/1991 0
-------
TS 4074 Site Selection for District and Field 2/06/1992 1
------- Regulators
TS 4075 Consumer Piping Systems - Operating Pressure 12/02/1996 1
------- Exceeding 515kPa
TS-4077 Design Life of Gas Transmission and 28/11/1991 1
------- Distribution Systems
TS 4078 Management of Transmission Pipeline Easements 24/05/1999 2
-------
TS 4079 Design of Pressure Regulating Installations 7/09/1994 2
------- with Inlet Pressures Between 7kPa and 10,000
kPa
TS 4081 Storage, Handling and Transport of Pipe 13/12/1991 0
-------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NO. TITLE DATE ISSUE
<S> <C> <C> <C>
TS 4082 Selection of Components and Materials for 8/06/1993 1
------- Transmission and Distribution Systems
TS 4084 Abandoning or Removing of Buried Distribution 6/12/1995 2
------- Mains and Services
4085 Pre-fabricated Domestic Service Riser (LP and x 0
HP)
4088 Steel Pipe - API 5L - Suitable for Coating 23/02/1995 5
TS 4090 Purging for Commissioning of Transmission and 10/09/1993 1
------- Distribution Pipe
SP 4091 Pipe Fittings - Malleable Cast Iron and 1/08/1994 2
------- Galvanised
TS 4092 Plant Design (consideration of OH&S 15/11/1996 2
------- Legislation)
TS 4093 Noise Control for Transmission and 30/03/1994 1
------- Distribution Systems
SP 4094 Stainless Steel Tapping Bands for Low and 1/05/1993 1
Medium Pressure Mains - DN80 to DN450
TS 4098 Design Pressure Regulations with Inlet 14/12/1992 0
------- Pressures Between 7 kPa and 10,000 kPa
TS 4099 Depth of Cover to Underground Assets 18/09/1996 1
-------
TS 4101 Consumer Piping Systems - Operating Pressure 10/01/1995 1
------- Exceeding 200 kPa but not Exceeding 515 kPa
TS 4102 Design and Construction of Large Diameter PE 24/10/1995 3
------- Pipe for High Pressure Systems
TS 4107 Inspection and Repair of Damaged Steel 3/05/1993 1
------- Pipelines
TS 4108 Stress Evaluation of Bored Pipeline Crossing 23/04/1993 1
Roads and Railroads
SP 4114 Pipe Fittings - Wrought Steel 1/08/1994 1
-------
TS 4115 Pre-commissioning Treatment of Gas Pipelines 11/04/1994 1
-------
TS 4116 Natural Gas Odorization 11/04/1994 1
-------
TS 4117 Configuration Management (Technical) 31/07/1995 1
-------
TS 4121 Approved Welding Procedures - Transmission 27/07/1995 2
-------
SP 4125 Underground Marking Tape 12/12/1994 1
-------
TS 4127 Distribution Mains and Services 30/10/1995 1
-------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NO. TITLE DATE ISSUE
<S> <C> <C> <C>
TS 4129 Butterfly Valves 1/04/1995 1
-------
TS 4130 Glossary of Terms for the Gas Grid 24/10/1995 1
-------
TS 4132 Insertion 30/08/1995 1
TS 4135 Construction of Industrial and Commercial 20/07/1995 1
------- Metering/Regulating Installations (LP/NP Inlet
Pressure)
TS 4136 Directional Boring of Mains 1/05/1997 1
-------
TS 4137 Domestic Regulator Freezing Protection - 3/11/1995 1
-------
(Interim)
TS 4142 Portable Gas Detector Calibration Intervals 7/10/1996 1
-------
TS 4143 Safety Shut-off Valves in Fire Alarm Systems 20/02/1996 1
-------
TS 4147 Location of Underground Services 1/08/1996 1
-------
TS 4148 Policy for Plastic Pipe Joint Systems 1
-------
TS 4149 Quality Assurance Process for Designated 16/06/1999 2
------- Materials
TS 4153 Materials Management Systems - Gas Grid 1/06/1996 1
------- Critical Materials
TS 4156 Requirements for Planting of Trees Near Gas 24/07/1996 1
------- Mains
TS 4158 Approved Welding Procedures - Distribution 18/08/1996 1
-------
SP 4159 Polyethylene (PE) Black with Yellow Stripes 27/7/1999 4
------- Pipe
SP 1600 Construction of Gas Supply Pipework 5/12/1998 1
-------
SP 1601 Pipe Bedding Material 23/09/1998 1
-------
4300-5199 GAS MEASUREMENT
SP 4300 Outlet Couplings - Domestic Meters - Nylon 7/8/1991 2
SP 4301 Outlet Nuts - Domestic Meters - Nylon - LP 11/03/1991 1
TS 4303 Standard Metering Pressures - Industrial and 2/12/1992 3
------- Commercial
SP 4304 Domestic Regulator - HP to LP 1/06/1991 2
SP 4045 Domestic Regulator - LP to LP 1/06/1991 2
TS 4306 Requesting Inline MK1 18/3/1991 1
-------
TS 4318 Authorised Meter Inspectors 23/7/1999 2
-------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NO. TITLE DATE ISSUE
<S> <C> <C> <C>
TS 4320 Testing Metering Pressure - Industrial and 25/07/1995 2
------- Commercial
TS 4321 Field Test - Mechanical Correctors 18/3/1991 1
TS 4323 Testing Consumer Complaint Meters 18/3/1991 1
4324 Authorised email meter inspector updated 1/11/1988 1
TS 4325 Industrial Sonic Nozzle Test Station - 18/3/1991 1
Calibration
TS 4326 Domestic Sonic Nozzle Test Station - 18/3/1991 1
Calibration
TS 4327 Sealing Compensating Index Type Domestic Meter 18/3/1991 1
TS 4331 Leg Switch During Flow Computer Test 18/3/1991 1
SP 4332 Industrial and Commercial Remote Meter Reading 23/8/1991 2
Indication
TS 4333 Cost update of Standard Meter/Regulator Units 1/08/1991 1
TS 4336 Reading Sarasota Computers 18/03/1991 1
SP 4332 Industrial and Commercial Remote Meter Reading 23/8/1991 2
Indication
TS 4333 Cost Update of Standard Meter/Regulator Units 1/08/1991 1
TS 4336 Reading Sarasota Computers 18/03/1991 1
TS 4340 Calculating Inline Instruments MHQ and MDQ 23/04/1991 1
-------
TS 4341 Industrial and Commercial Regulator and 1/07/1991 1
Ancillaries Testing
TS 4343 Safe Access to Corporation Assets 1/07/1991 1
-------
TS 4344 Arranging Installation of 23/09/1991 1
Industrial/Commercial Remote Meter Indication
SP 4346 Signage Meter Unit for Industrial Commercial 1/02/1992 1
Consumers
TS 4349 Site Selection - Industrial and Commercial 4/09/1998 2
-------
Metering Stations
TS 4351 Selecting and Specifying Single Run Regulator 27/7/1999 1
------- Units
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NO. TITLE DATE ISSUE
<S> <C> <C> <C>
Meter/Instrument/Request form (this form is 27/7/1999 1
------------------------
also available as a Word 97 template on your
computer)
Appendix A - Service Size Maximum Load Capacity 27/7/1999 1
-----------------------------------------------
Appendix B - Selection Charts 27/7/1999 1
-----------------------------
Appendix C - Spring and Orifice Selection Guide 27/7/1999 1
-----------------------------------------------
Appendix D - Reference Drawings 27/7/1999 1
-------------------------------
TS 4352 Gas Meter Location - Single Occupancy Domestic 22/06/1999 1
------- -----------------------------------------------
Premises
--------
TS 4355 Metering Pressure for Domestic Billing Meter 9/12/1993 1
------- --------------------------------------------
5200 6299 LEAKAGE SURVEY
TS 5201 Leakage Survey - Gas Distribution System 30/09/1994 1
-------
6300-6599 MISCELLANEOUS
TS 6304 Pipework Blowdown and Gas Flaring - 16/03/1995 1
------- Transmission
6600 7399 PROPERTY
TS 6600 Security Fencing (General Security) 28/08/1998 2
-------
TS 6601 Security Fencing (Inner High Security)( 28/08/1998 2
-------
7400 7599 STANDARDS MATTERS
TS 7401 Engineering Standards 1/05/1995 3
-------
7600-7899 SYSTEM PLANNING
TS 7600 Pressure Classifications and Operating 26/03/1993 2
------- Pressure Ranges
TS 7601 Maintaining Gas Supply During TP Pipelines 1/05/1992 1
------- Blowdown Operations
7900 9999 TRANSMISSION
TS 7900 Valves in a TP System 1/12/1990 1
-------
SP 7926 Application of Rock Jacket to PE Coated Pipe 13/05/1992 2
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NO. TITLE DATE ISSUE
<S> <C> <C> <C>
SP 7930 Steel Transmission Pipeline Valves 1/09/1992 1
SP 7938 Steel Transmission Pipeline Valves 9/09/1993 1
SP 7941 Valve for Derrimut City Gate 14/12/1993 1
SP 7947 Steel Transmission Pipeline Valves 4/07/1994 1
SP 7950 Steel Transmission Pipeline Valves 31/10/1994 1
</TABLE>
<PAGE>
SCHEDULE 21
OPERATION AND PERFORMANCE MANUALS
PART A: ELECTRICITY MANUALS
ISSUE DATE
----------
Earthing Design Manual June-95
Field Refresher Training - Book 1 July-95
Field Refresher Training - Book 2 July-95
Field Refresher Training - Book 3 July-95
High Voltage Aerial Bundled Cable Manual June-95
Line Inspection Manual December-95
Lineworker Handbook June-95
Live Line Glove and Barrier Manual December-95
Live Line Manual December-95
Low Voltage Aerial Bundled Cable Manual December-95
Network Legislation & Environment Manual May-94
Overhead Line Construction Manual November-95
Overhead Line Design Manual - Volume 1 July-93
Overhead Line Design Manual - Volume 2 May-95
Overhead Line Manual - Volume 1 December-95
Overhead Line Manual - Volume 2 December-95
Overhead Line Manual - Volume 3 December-95
Poles (Power lines electronically surveyored) June-94
Public Lighting Manual June-95
Services Manual June-95
Strategic Maintenance Manual - Volume 2 July-94
Substation Field Manual - Volume 1 December-95
Substation Field Manual - Volume 2 December-95
SUMS (Subdivision Management System) May-94
Underground Cable Design Manual December-95
Underground Cable Jointers Manual - Volume 1 June-95
Underground Cable Jointers Manual - Volume 2 December-95
Underground Cable Jointers Manual - Volume 3 December-95
Underground Installation Manual December-96
Underground Maintenance Manual June-95
Vegetation Management Manual January-89
Victorian Services & Installation Rules September-96
Bushfire Mitigation Manual Various
<PAGE>
PART B - GAS MANUALS
-----------------------------------------------------------------
Network Control Maintenance Guide
-----------------------------------------------------------------
Network Control Maintenance Manual
-----------------------------------------------------------------
Standard Procedure Manual
-----------------------------------------------------------------
System Operation Manual
-----------------------------------------------------------------
TLPG Plant Maintenance Manual Volume 1
-----------------------------------------------------------------
TLPG Plant Maintenance Manual Volume 2
-----------------------------------------------------------------
Westar Approved Materials and Manufacturers Manual
-----------------------------------------------------------------
<PAGE>
SCHEDULE 22
REIMBURSABLE COSTS
<PAGE>
SCHEDULE 23
ETHICS AND NON-DISCLOSURE CERTIFICATION
Pursuant to the Network Services Alliance Agreement between TXU Networks Pty Ltd
("TXUN"), Westar Pty Ltd, Eastern Energy Limited, Akamon Pty Ltd and Tenix Pty
Ltd (the "Alliance Agreement"), the undersigned employee of Akamon Pty Ltd or
affiliate of Akamon Pty Ltd hereby affirms and certifies the following:
I have disclosed, and during the course of my work under the Alliance Agreement
will disclose, to Akamon Pty Ltd any and all of my business and personal
activities, interests and affiliations which may conflict or give the appearance
of conflicting with the interests of TXUN or any of its related bodies corporate
with my ability to exercise sound judgment and faithfully discharge my duties in
a manner which will preserve the reputation and integrity of TXUN and any of its
related bodies corporate. Further, I have advised or will advise the appropriate
TXUN supervisor of any activity of which I am aware that I consider to be in
conflict with or appears to be in conflict with the interests of TXUN or any of
its related bodies corporate.
I will hold confidential any and all proprietary and conditional information of
TXUN and any of its related bodies corporate to which I may be or become privy
during the course of any work under the aforementioned contract, except as may
be compelled by law or official order of an governmental authority of competent
jurisdiction.
THE FOREGOING AFFIRMATION AND CERTIFICATION SHALL NOT RESTRICT IN ANY MANNER
WHATSOEVER THE REPORTING OF SAFETY RELATED CONCERNS.
Signature:
--------- ----------------------------------
Date:
---- ----------------------------------
Employee's Name:
--------------- ----------------------------------
SSN:
--- ----------------------------------
<PAGE>
SCHEDULE 24
SHARE OF SAVINGS PAYMENT
The following is a narrative statement which summaries the parties' agreement
with respect to the share of savings to be made. Costs savings and overruns on
capital projects are shared between the parties 50/50. Costs savings and
overruns on operations and maintenance are shared 2/3 to TXUN and 1/3 to the
Alliance Service Provider.
The parties agree that if the calculations derived pursuant to the table and
following paragraphs set out below do not reflect the fundamental principles
recorded above, the table and paragraphs will be amended to reflect the stated
principles and any dispute in this regard will be resolved by an independent
expert in accordance with clause 39 of this Agreement.
(a) The Share of Savings Payment is based on the annual "At Risk Amounts" set
out below.
-------------- ----------- ---------- ---------- ----------- ---------
YEAR 2000 2001 2002 2003 2004
-------------- ----------- ---------- ---------- ----------- ---------
$M 0 0 0 0 0
-------------- ----------- ---------- ---------- ----------- ---------
-------------- ----------- ---------- ---------- ----------- ---------
YEAR 2005 2006 2007 2008 2009
-------------- ----------- ---------- ---------- ----------- ---------
$M 3.75 3.75 3.75 3.75 3.75
-------------- ----------- ---------- ---------- ----------- ---------
The At Risk Amounts for each year from 2001 will be indexed by CPI.
(b) The At Risk Amount for the relevant year must be divided by 4 (or otherwise
divided as agreed between the parties) to obtain a "Quarterly At Risk
Amount".
(c) The Direct Field Costs and Support Costs of performing each of the
electricity and gas:
1. Operations and Maintenance Services;
2. Replacement Capital Works Services;
3. TXUN Initiated Capital Works Services;
4. Customer Initiated Capital Works Services; and
5. labour costs in relation to entitlements of the Seconded Employees in
performing the Services, whether relating to any contract of
employment, long service leave, workers compensation, superannuation,
annual holidays or industrial instrument of the Seconded Employees
<PAGE>
during that Quarter must be subtracted from the Direct Field Costs and
Support Costs of performing those Services set out in the Target Cost,
as allocated in respect of each Service over that Quarter. If this
results in a positive number, 50% (or, in the case of Operations and
Maintenance Works Services and the Replacement Capital Works Services,
33.33%) must be added to the Quarterly At Risk Amount.
If it results in a negative number, 50% (or in the case of the
Operations and Maintenance Services and the Replacement Capital Works
Services, 33.33%) must be subtracted from the Quarterly At Risk
Amount.
(d) At the end of each Calendar Year, the Direct Cost and Support Cost of
performing each of the electricity and gas:
1. Operations and Maintenance Services;
2. Replacement Capital Works Services;
3. TXUN Initiated Capital Works Services;
4. Customer Initiated Capital Works Services; and
5. labour costs in relation to entitlements of the Seconded Employees in
performing the Services, whether relating to any contract of
employment, long service leave, workers compensation, superannuation,
annual holidays or industrial instrument of the Seconded Employees
during that year must be subtracted from the Direct Field Costs and Support
Costs of performing those Services set out in the Target Cost, as allocated
in respect of each Service over that year.
If this results in a positive number, 50% (or in the case of the Operations
and Maintenance Works Services and the Replacement Capital Works Services,
33.33%) must be added to the Quarterly At Risk Amount.
If it results in a negative number, 50% (or, in the case of the Operations
and Maintenance Services and the Replacement Capital Works Services,
33.33%) must be subtracted from the Quarterly At Risk Amount.
The invoice for the final Quarter of a year must be adjusted such that the
amount paid to or payable by the Alliance Service Provider over the year is
equal to the amount that is paid to or payable by the Alliance Service
Provider determined in accordance with the calculation in this clause (d).
(e) The maximum exposure for over spending the Target Cost for a Calendar Year
is limited to the "Total At-Risk Amount" divided by the relevant sharing
arrangement being 50% (or, in the case of the Operations and Maintenance
Works Services and the Replacement Capital Works Services, 33.33%). The
"Total At-Risk Amount" equals the sum of the Share of Savings Payment
At-Risk Amount for the year and the Non-Financial At-Risk Amount for the
year.
<PAGE>
SCHEDULE 25
COMMERCIAL SUMMARY
The following is a narrative statement which summaries the parties' agreement
with respect to the payments to be made by TXU to the Alliance Service Provider
under this Agreement.
Subject to this Agreement, payments from TXU to the Alliance Service Provider
will consist of:
(a) Reimbursement of actual costs;
(b) An annual management fee of $5 million payable during the first 5 years of
the Contract only.
(c) An annual incentive fee of $2.5 million, payable during the first 5 years
of the Contract only, if all the non-financial KPIs, as agreed, are
achieved by the Alliance Service Provider.
(d) In the case of (c) above, the $2.5 million will be at risk in the event
that target costs are exceeded by actual costs.
(e) A share of savings and overruns which will result from actual costs being
lower or higher than budgeted target costs.
(f) In years 6 to 10 of the contract, an annual fee of $3.75 million will be
paid if the budget is met, and a further $3.75 million will be paid if all
the non-financial KPIs, as agreed, are achieved by the Alliance Service
Provider.
(g) In the case of (f) above, $7.5 million will at risk in the event that
target costs are exceeded by actual costs.
