Korea Western Power Co., Ltd. (KOWEPO) duly organized by virtue of the law of the Republic of Korea and having its head office in Taean-gun, Chungcheongnam-do, Korea, issues this Invitation To Bid (ITB) to provide Bidders with information in detail on the procedures of and requirements for Bidding and Contractual terms and conditions.
1.2 Contract Period (Long-term Contract): Five (5) years
The prices for the remaining Contract Years (CY2 ~ CY5) shall be determined by mutual agreement of the both parties.
1.3 Quantity and Shipping
No
Spec(NCV)
Quantity for
1st Contract year
Delivery Period and Origin
Price
LT
05
Min.5,600
Max. 6,100
[CY1]
Max. 320,000mt
Min. 80,000mt
[CY1]
· (FOB) May or June at Seller’s option
- In case of May shipment,
22 ~ 31 May, 2022
- In case of June shipment,
1 ~ 30 June, 2022
* 10 days laycan to be declared by KOWEPO
· (CFR) By the end of June, 2022 or
By the end of July at Seller’s option
· (Origin) Indonesia, Australia, Canada,
RSA and Colombia
* Not allowed from Russian ports
One Single
Fixed Price on FOB
or
CFR CY1
- ALS Limited (ACIRL Quality Testing Services Pty) is not allowed as an international independent inspection agency.
- The following deviations apply to all 5 Gencos in common.
- Liquidate Damage clause shall not be deleted.
- The vessel age shall not be restricted.
- The bidder should not submit specified surveyor’s name.
- The bidder should not submit two prices in the same bid.
- The restricted origin bidding shall not be accepted multi origin clause.
- The bidder should not remove any clauses in Adjustment of the Price for Quality in the contract.
- Payment Term shall be selected by the T/T.
- In case of Seller who does not meet the qualifications of the bidder or who does not have supply record to KOWEPO within recent one (1) year, payment will be made on Banker's Letter of Credit term.
- The difference between the guaranteed NCV and the limit of range for NCV shall be less than 100kcal/kg (within 100kcal/kg).
- When NCV is greater than 6,100kcal/kg, there is no calorific bonus.
- As per Korean government law, the seller should submit an original of MSDS and Korean translation of MSDS before arriving shipment and shall email copy of them at the address below.
- The seller should arrange with the Agency to email a copy of the certificate of quality to Buyer directly before shipping the original documents for payment to Buyer’s office.
- Seller should submit the full set of Ash Analysis (SiO2, Al2O3, Fe2O3, CaO, MgO, SO3, Na2O, K2O, TiO2, P2O5, MnO, SrO) and Trace elements.
(1) Shipment Size & Delivery Term for 1st year
Shipment size
Total Q'ty
Remark
Case 1
1 Panamax
80kt
Possible
Case 2
2 Panamaxes
160kt
Possible
Case 2
4 Panamaxes
320kt
Possible
Case 3
1 Cape
130kt
Possible
Case 4
1 Cape
140kt
Possible
Case 5
1 Cape
150kt
Possible
Case 6
1 Cape
160kt
Possible
Case 7
2 Capes
320kt
Possible
Case 7
3 Capes
390kt
Impossible
(2) Origin (Loading Port)
- Chinese coal and Russian coal are not allowed to participate in this tender.
(3) Additional quantity supply
- On the basis of mutual agreement, additional quantity can be sold and purchased and addendum for the additional tonnage shall be attached to the original contract for long-term contract.
- The prices for the remaining Contract Years (CY2~CY5) shall be determined by mutual agreement of the both parties.
Award Q'ty
CY 2 to CY5
Case 1
80kt
160kt per each year
Case 2
160kt
320kt per each year
Case 2
240kt
320kt per each year
Case 3
320kt
640kt per each year
Case 4
130kt
320kt per each year
Case 5
140kt
320kt per each year
Case 6
150kt
320kt per each year
Case 7
160kt
320kt per each year
Case 8
320kt
640kt per each year
(5) Shipping schedule
- KOWEPO will not be obliged to take the Supplier's preferred laycan into consideration when
deciding the final laycan will be free to declare 10 days laycan in light of KOWEPO's own needs.
- Once KOWEPO has, in principle, selected the bidder to be awarded a Contract, KOWEPO and that bidder shall agree the Delivery to be included in the Contract. The bidder must not unreasonably refuse to agree any Delivery Periods proposed by KOWEPO.
(6) Coal Mine (Indonesian Coal Only)
Each shipment of coal to be purchased by KOWEPO and delivered by the Bidder shall be entirely supplied from a single mine. Supply of coal for any shipment from more than one mine is not allowed. Upon request by KOWEPO, a Bidder shall provide relevant supporting documents including certificates, issued by the relevant authorities of the exporting country, to demonstrate the legal status and current situation of the coal mine from which the coal would be supplied. If coal to be supplied by the seller is found out to be blended coal from a different kinds of Coal mines or coal specs during any process of delivery (including unloading & using in power plant), the seller shall pay the Buyer liquidated damages for deception in the amount of 30% × FOBT Price (Base Price) × Contractual Quantity. Also, Buyer may be giving written notice to Seller terminating the subject Contract without any liability or charge to Buyer
1.4 (Intentionally left blank)
1.5 Quality Specifications (based on ASTM standards)
: Spec For LT-5
Item
Unit
Limit of
Range
Total Moisture (As received basis)
% WT
Max. 15 *¹
Inherent Moisture (Air dried basis)
Volatile Matter (Air dried basis)
Volatile Matter (Air dried basis) *1
Volatile Matter (Air dried basis)*Colombian Coal Only
Fixed Carbon (Air dried basis)
Ash (Air dried basis)
% WT
% WT
% WT
% WT
% WT
22∼36
22∼42
22~38
Max. 60
Max. 18
Total Sulphur (As received basis)
% WT
Max. 1.0
Grindability (HGI)
Min. 45
Gross Calorific Value (Air dried basis)
Gross Calorific Value (As received basis)
Net Calorific Value (As received basis) *2
kcal/kg
kcal/kg
kcal/kg
Min. 5,600
Max. 6,100
Hydrogen (Hd) (Dry Basis)
% WT
Nitrogen (Dry ash free basis)
% WT
Max. 2.4
Oxygen (Dry ash free basis)
% WT
Ash Fusion Temperature
IDT (Reducing Atmosphere)
℃
Min. 1,200
Ash Analysis
Fe₂O₃
Na₂O
K₂O
Na₂O + K₂O (Colombian Coal only)
SiO₂
% WT
% WT
% WT
% WT
% WT
Max. 16
Max. 2.0
Max. 3.0
Max. 5.0
Max. 70
Size Distribution
Above 50mm
Under 2mm
%
%
Max. 5
Max. 40
*1 In the event that the VM is outside the limits of range as the above Standard Quality Specifications for High CV of Indonesian coal, KOWEPO will select as a successful Bidder if KOWEPO judges that Coal can be used by the Taean Power Plant.
* 2 Net Calorific Value = Gross Calorific Value - 5.72 (Har × 9)
Where: Har = Hd × (100-TM)/100 + 0.1119 × TM
Har : Total hydrogen on as received basis
※ In the event that the quality is outside the limits of range as the above Standard Quality Specifications, KOWEPO will select as a successful Bidder if KOWEPO judges that Coal can be used by the Taean Power Plant.
1.6 Terms of Payment
Payment Term shall be selected by T/T.
In case of Seller who does not meet the qualifications of the bidder or who does not have supply record to KOWEPO within recent one (1) year, payment will be made on Banker's Letter of Credit term
1.7 Compliance with Invitation to Bid
Bidders shall prepare and submit a Bid in compliance with the procedures and requirements as provided in this ITB. Any failure to do so may give KOWEPO a reason to reject or to unfavorably evaluate the Bid. Bidders shall be regarded as having been thoroughly acquainted with and having accepted all the contents of the ITB.
Upon submission of Bid documents, Bidders are thereafter regarded as having agreed to fully comply with the terms and conditions of the contract as attached in the Invitation to Bid.
1.8 Language
The Bid proposal documents shall be prepared in English.
1.9 Unacceptable Bids
Any of the following Bids will not be accepted by KOWEPO:
(1) Bid which is submitted by a company not qualified for participation in this bidding.
(2) Bid which is submitted after the bid closing date.
(3) Two or more Bids which are submitted from the same mine.
(4) Bid which, as deemed by KOWEPO, deviates from the other essential requirements of the ITB.
(5) Bid submitted containing any changes whatsoever in the context or any additions to the content of the attached contract, which are not required by the ITB
1.10 Definition of Terms
The meanings defined in Article 1 of Contract Terms, Chapter Ⅲ shall be applied to the words of terms employed in other Chapters of the ITB, except where the context otherwise requires.
1.11 Notice of Changes in the ITB
KOWEPO may notify the Bidder of any amendment or changes of the ITB, if any, and they will constitute a part of the ITB.
1.12 Computation of Time
Unless otherwise specifically provided in the ITB, the time which is stated in number of days and months, will include Saturday, Sunday and holidays, and in case that any specific day falls on Sunday or a holiday, the day will be postponed to the first following business day.
1. 13 Confidentiality of Bidding
The prices in the Bidder's Price Proposal must be issued independently, without consultation, communication, or agreement with any other Bidder or potential Bidder;
The prices that have been quoted in the Bidder's Price Proposal have not been disclosed knowingly by the Bidder and will not be disclosed knowingly by the Bidder, directly, or indirectly, to any other Bidder or potential Bidder prior to the time Bids are due; and
No attempt has been made directly or indirectly to induce any other person or firm to submit or not to submit a Bid for the purpose of restricting competition.
The Bidder shall not disclose the ITB to any third party who is not directly related with the preparation of the Bid proposal.
1.14 Validity Period of the Bid
The Bid including the price shall be bound as a firm offer and valid for a period of at least two (2) calendar days after the bid closing date. KOWEPO may request the Bidder to extend the validity period of the Bid, if necessary.
1.15 Withdrawal of Bid
KOWEPO has the right, at any time and without any liability to the Bidder, to withdraw or delay this bid process or to re-tender or alter the scope of purchase.
1.16 Performance Record Collection
Each bidder’s quality record of 1) CV difference by country of origin between the loading port quality certification and the result of analysis made at the unloading port by KOWEPO and 2) CV fluctuation by lots in a single shipment analyzed at the unloading port by KOWEPO shall be applied to the price evaluation later.
Clause 2 - Bidding Procedures
2.1 Qualifications of the Bidder
Companies who and have more than 300,000MT direct performance records of coal supply with 5 Korea Gencos (KOWEPO, KOEN, KOMIPO, KOSPO, EWP) or power generation companies (or electric power companies) in Korea, Taiwan, Japan, EU or North America or steel mill companies in Korea, Taiwan, Japan during the last three (3) years (from the bid closing date), on the condition that they do not have unfaithful coal supply records to the above five companies(excluding the cases where sanctions on tender participation, taken by Korean generation companies, still run), and shall meet the whole requirements of ITB including but not limited to, coal quality specification, shipping schedule, etc., are qualified to participate in the ITB.
After being awarded as a successful Bidder, if a successful Bidder fails to enter into making a contract or fails to execute the contract signed, the Bidder will be banned from participating in KOWEPO’s future coal purchasing tender for at least three (3) months, which is the KOWEPO’s sole right and could not be challenged under any circumstances.
2.2 Bid Bond
In case the Seller has had a successful record of coal supply no less than 300,000MT to one of the five (5) Korean Gencos (KOWEPO, KOEN, KOSPO, KOMIPO, and EWP) or major power generation companies (or electric power companies) in Taiwan, Japan or major steel companies in Taiwan, Japan and Korea in the recent three (3) years, then KOWEPO may exempt the seller from establishing the Bid Bond.
A) The bidders who have material unfaithful records of coal supply to the above mentioned companies shall provide bid bond in favor of KOWEPO not less than five percent (5%) of the total tender price by 10:00 hours Korea Standard Time of the bid closing date, according to the Bidding Instructions 2.2
(1) Cash or certified check issued by a first-class international bank
(2) Irrevocable stand-by letter of credit, in which the L/C should be advised to KOWEPO
(3) Bank guarantee or surety bond issued by a first-class bank with the condition that Korean Bank in Korea reissue Bank Guarantee under your counter guarantee
(4) Guarantee Certificate issued by Guarantee Insurance Company
B) The bid bond shall be payable unconditionally to KOWEPO at sight against the KOWEPO's simple request for payment in the event that:
(1) the bidder withdraws his bid proposal before its expiration of validity; or
(2) the successful bidder refuses to sign the Contract within the designated period
(3) the successful bidder fails to establish the relative performance bond within the designated period.
C) The bid bond shall be valid for at least one (1) month after the expiration of validity of the bidder proposal referenced in 1.13 Validity Period of the Bid
D) The bid bond shall be returned without interest thereon, (ⅰ) to the unsuccessful bidder within one (1) month after award of the Contract or promptly after rejection of the bidder proposal, and (ⅱ) to the successful bidder as soon as he establishes the performance bond as provided in Article 14, Chapter Ⅲ.
2.3 Submission of Bid Documents
The Bid documents shall be submitted by designated e-mail(bidding@iwest.co.kr) below not
later than the deadline (refer to 2.5 Bid Closing Date).
The Bid documents which submitted by personal e-mail or a method other than those noted above shall not be accepted.
2.4 Bid Closing Date
The Bid documents shall be submitted no later than 10:00 AM, 6 May, 2022 (KOWEPO Server’s Korea Standard Time)
Clause 3 - Preparation of Bid Documents
3.1 Contents of Bid Documents
Each bid shall consist of the following documents and all necessary attachments:
(1) Bidding Price
(The Bid Price Form in Chapter Ⅱ shall be used)
(2) Shipping Conditions
(3) Coal Specifications
(4) Certificate of Performance of Coal Supply Contract
(5) Integrity Pact
(6) Power of Attorney (if necessary)
(7) Certificate of Origin
(8) Certification to supply the Coal
(9) In case of Indonesian Coal, bidders must submit documents as follow.
① Within 7 business days after receiving Award
- Export & Sales License
- Coal Production License
- Clean and Clear Certificate of Single Mine Product
② Within 7 business days after loading completion
- Certificate of Analysis on each barge (only anchorage shipment)
- Samples of the coal taken from each barge (only anchorage shipment)
Clause 4 - Evaluation of Bid
4.1 Evaluation Method of Bids
The Bid Proposal will be appraised by comparing the evaluated CFR prices determined in accordance with the following formulas;
- Individual consumption Tax: worth of KRW 43,000/MT (in the event the Guaranteed Specification for NCV is below 5,000kcal/kg) or KRW 46,000/MT(in the event the Guaranteed Specification for NCV is more than 5,000kcal/kg) or KRW 49,000/MT (in the event the Guaranteed Specification for NCV is more than 5,500kcal/kg)
* The amount of consumption tax penalty shall be calculated in U$ applying ‘KRW/US$ basic exchange rate’ posted by the Korean Exchange Bank on the closing date of this bidding.
4.2 Selection of the Successful Supplier, Right of Rejection
KOWEPO shall select successful suppliers in the order of the lowest evaluated price until the quantity amounts to the target contractual quantity of KOWEPO only if evaluate price is lower than the KOWEPO’s target price which is internally authorized
In the process, if the last lowest supplier’s quantity is in excess of the target contractual quantity of KOWEPO, the excessive quantity will be excluded from the contractual quantity. In the event that there are two or more suppliers who proposed the same price, the Supplier who proposed the largest quantity shall be selected as the successful supplier.
In the event that there are two or more supplies who proposed the same price as well as the same quantity, the supplier who proposed the highest Net Calorific Value coal will be selected as the successful supplier.
KOWEPO shall reserve the right, at any time without any liability, to reject any part or all of the ITB, to withdraw this ITB, to increase or decrease the quantity of necessary coal to be purchased in the ITB for the best interests of KOWEPO.
No claim(s) from Suppliers for compensation with regard to the rejection, withdrawal and further price negotiation shall be accepted by KOWEPO.
4.3 Appointment as Contractor
Award notice shall be made after reaching an agreement on the contract price and shipping schedule adjustments between KOWEPO and the lowest price supplier.
4.4 Signing of Contract
The awarded bidders (successful bidders) shall sign a contract within three (3) weeks after the notice of contractual price term by KOWEPO.
Clause 5 ? Performance Bond
The Seller shall establish a performance bond in favor of KOWEPO within seven (7) days after receipt of the Price Term Notice from KOWEPO after an agreement on the contract price and shipping schedule adjustments in an amount not less than ten percent (10%) of the price amount of each shipment.
In case the Seller has had a successful record of coal supply no less than 300,000MT to one of the five (5) Korean Gencos (KOWEPO, KOEN, KOSPO, KOMIPO, and EWP) or major power generation companies (or electric power companies) in Taiwan, Japan or major steel companies in Taiwan, Japan and Korea in the recent three (3) years, then KOWEPO may exempt the seller from establishing the Performance Bond.
The performance bond shall be valid for at least three (3) months after the last date in the mutual agreed laycan.
(1) Cash or certified check issued by a first-class international bank; or
(2) Irrevocable stand-by letter of credit, in which the L/C should be advised to KOWEPO; or
(3) Bank guarantee or surety bond issued by a first-class bank with the condition that Korean Bank in Korea reissue Bank Guarantee under your counter guarantee
(4) Guarantee Certificate issued by Guarantee Insurance Company
The performance bond shall be payable unconditionally to KOWEPO at sight against the KOWEPO's simple request for payment:
-
Clause 6 ? Loading Port Supervision & Unloading Problem
6.1 Loading Port Supervision
KOWEPO, at its sole discretion, may appoint and dispatch an independent inspector for the whole unloading process including but not limited to ? barge loading, barge transferring, mother vessel loading, measuring temperatures of the barge coal, coal sampling, laboratory witnessing, sample sealing and etc,. KOWEPO may add more procedures when it determines that those are required to secure the quality and homogeneity of the loaded coal.
KOWEPO has the right to perform additional surveillance for the proposed coal mine, the mining facility, the shipping process and coal quality analysis. In such event, the Seller shall cooperate with such attendance and observation.
Bidders who submitted their Bid Proposals shall be deemed to be fully acquainted with this loading port supervision and they shall fully cooperate with the whole process. All the costs related with this supervision shall be borne by KOWEPO.
6.2 Unloading Problem
If the coal actually delivered to the unloading port is not readily handleable or substantially unable to unload in the reasonable effort by KOWEPO, KOWEPO may request the Seller to select an independent inspector to investigate exact causes of the problem. KOWEPO will also appoint an independent inspector for the same task. Pending the results of the investigations, KOWEPO shall endeavor to finish the unloading as soon as possible. And the final results of the investigations shall be basis of the sharing ratio of directly incurred costs including demurrage money related to the subject cargo unloading. The Seller shall not have any right of not acceding to KOWEPO’s demand to select an independent inspector by reason of the full compliance of the coal specifications to the required standard in the contract.
Clause 7 ? Special Terms and Conditions for Coal Quality Evaluation Score
7.1 Coal Quality Evaluation Score
7.1.1 Coal Quality Evaluation Score will be only applied to contract(s) and addendum(s) including this special terms and conditions but will not be applied to shipments which do not arrive at Taean Port by any other reasons such as swap-out to other companies.
7.1.2 KOWEPO manages history of Coal Quality Evaluation Score by classifying supplier by country of origins. In other word, even if suppliers are same, they are considered as different suppliers when coal’s country of origins are different.
7.1.3 Suppliers should fully trust KOWEPO's sampling and analysis methods, but if requested by the supplier with writing within five working days of the day awarded as a successful bidder, sampling and analysis can be carried out by a single International Laboratory in Korea which will be selected by mutual agreement with supplier and KOWEPO. In this case, the cost of sampling and analysis shall be borne by Supplier, and the calculation of the Coal Quality Evaluation Score and the adjustment of the price will be based on the analysis result by the International Laboratory.
7.1.4 Coal Quality Evaluation Score is calculated according to the Table 1-1 and deductions are made by Table 1-2 when unloading problems and/or coal quality issues occur. Coal Quality Evaluation Score is determined on the day when chemical engineers of KOWEPO send out a technical report. However, if the analysis is to be carried out by an international Laboratory, Coal Quality Evaluation Score is determined on the day when the analysis report by the International Laboratory is issued. If Coal Quality Evaluation Scores Special Clause is included in contracts awarded before 31st August, 2019, in which case the Coal Quality Evaluation Scores are calculated according to Table 2.
[Table 1-1] Table of evaluations
Items
Details
Score
NCVL ? NCVU
less than 100 kcal/kg
25
between 100~300 kcal/kg
37.5 ? {0.125 × (NCVL? NCVU)}
more than 300 kcal/kg
0
SCU ? SCL
less than 0.1%
25
between 0.1~0.3%
37.5 ? {125 × (SCU ? SCL)}
more than 0.3%
0
NCVF
less than 100 kcal/kg
25
between 100~300 kcal/kg
37.5 ? (0.125 × NCVF)
more than 300 kcal/kg
0
SCF
less than 0.1%
25
Between 0.1~0.3%
37.5 ? (125 × SCF)
more than 0.3%
0
Total
100
[Table 1-2] Table of deductions
Items
Deductions
Delay time of unloading due to coal’s stickiness, foreign materials, dust or lump coal etc. at an unloading port*1
1 per 1 hour
(max. 10)
When NCVU is equal or less than 5,450 kcal/kg (HCV only)
10
When NCVU is equal or less than 4,950 kcal/kg (HCV and MCV only)
10
When NCVL ? NCVU is 350 kcal/kg or more (LCV only)
10
When SCU is equal or more than 0.05%p above the limit of range
10
When ACU is equal or more than 0.50%p above the limit of range
10
When ACU is equal or less than 0.50%p below limit of range*2
10
*1 In case of damage to unloading facility, 10 point will be deducted regardless of delay time
*2 Applies only when the limit of range for minimum is set
When, NCVL: Net Calorific Value (As Received Basis) at a Loading port
NCVU: Net Calorific Value (As Received Basis) at an Unloading port
NCVF: Net Calorific Value (As Received Basis) Fluctuation by lots in a single shipment at an unloading port
SCL: Sulphur Contents (As received basis) at a Loading port
SCU: Sulphur Contents (As received basis) at an Unloading port
SCF: Sulphur Contents (As Received basis) Fluctuation by lots in a single shipment at an unloading port
ACU: Ash Contents (As dried basis) at an Unloading port
7.2 Application of Coal Quality Evaluation Score
7.2.1 If the Supplier’s Coal Quality Evaluation Score average of latest 3 shipments is equal or less than 70, or single shipment which is awarded after 31st August, 2019 is equal or less than 60, the supplier is subject to the following penalties.
- The next arriving shipment of the supplier will be sampled and analyzed by a single International Laboratory selected by KOWEPO, and the analysis result will determine the price adjustment by ARTICLE 8 (Adjustment of the Price for Quality). In this case, coal quality analysis made at the loading port shall be only provisional.
- Coal Quality Evaluation Score will be calculated by the analysis result by the International Laboratory.
- The penalty is able to apply to the shipment after next arriving shipment, if the remaining time until the next shipment's ETB is less than seven (7) days from the date on which the penalty takes effect, or if sampling and analysis at unloading port is not possible due to the International Laboratory for certain reasons.
- The payment of the shipment subject to penalty will be withheld until the coal quality is determined.
- If there is a reason for price adjustment due to the coal quality, KOWEPO shall notify the amount adjusted in accordance with ARTICLE 8 within five business days of the date the analysis result is issued. And the supplier shall issue the revised invoice within five business days of receipt of the notice. If the supplier does not issue revised invoice in time, KOWEPO will not be responsible for delays in payment. If there is no reason for price adjustment due to coal quality, KOWEPO should pay the price within 7 business days from the date coal quality is determined.
- Depending the coal quality, additional payment deduction will be applied if the result of the coal quality comes the reason for rejection in ARTICLE 6 (Rejection). The amount of additional payment deduction shall be calculated according to KOWEPO's internal standard.
- The Penalty taken effect does not expire until impose and is cumulative.
7.2.2 The Coal Quality Evaluation Score can be used as a basis for determining the extension of the contract period and the increase in contract volume.