EPC Expansion of Bulgartransgaz Pipeline – Linear Part

ARKAD CONSORTIUM

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CONSTRUCTION EQUIPMENT SHIPPING & LOGISTICS

FROM KSA TO BULGARIA

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1/1

Size PROPOSAL REPORT

A4

Doc.
Project Unit/Area Discipline Progressive Sheet Rev.
Design.
180-100 0000 LOGISTICS 00001 1 / 17 0
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Document property of ARKAD-ABB SpA: its reproduction, circulation and use without prior consent are forbidden
 0 15/11/2 Issued for Review HD RV MS
Re 019 Prepar Checke Appro
Date Description
v ed d ved

CONSTRUCTION EQUIPMENT SHIPPING & LOGISTICS

FROM KSA TO BULGARIA

Scale
1/1

Size PROPOSAL REPORT

A4

Doc.
Project Unit/Area Discipline Progressive Sheet Rev.
Design.
180-100 0000 LOGISTICS 00001 2 / 17 0
N/A
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DATE: 15/11/2019
PROPOSAL REPORT
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Table of Contents
1 INTRODUCTION............................................................................................................................ 3
2 DEFINITIONS................................................................................................................................ 4
3 SCOPE OF WORK........................................................................................................................ 5
3.1 SCOPE BREAKDOWN & RESPONSIBILITY................................................................................5
3.2 SHIPPING PROCESS.............................................................................................................. 5
4 PREPARATION & MOBILIZATION............................................................................................... 6
5 SHIPPING SCHEDULE................................................................................................................. 6
6 SHIPPING COST SUMMARY........................................................................................................ 6
7 HIRING COST ARKAD EQUIPMENT........................................................................................... 7
8 COMPLETE COST........................................................................................................................ 8
9 EQUIPMENT RENTAL.................................................................................................................. 8
9.1 RENTAL PRICE SUMMARY........................................................................................................... 8
9.2 SCHEDULE FOR RENTAL EQUIPMENT...........................................................................................9
9.3 ARKAD AND RENTAL EQUIPMENT COMPARISON............................................................................9
10 CONSLUSION......................................................................................................................... 9
11 ATTACHMENT LIST................................................................................................................ 9
ATTACHMENT 1 – EQUIPMENT SHIPPING COMPARISON........................................................10
ATTACHMENT 2 – MOBILIZATION AGREEMENT.......................................................................11
ATTACHMENT 3 – HIRING AGREEMENT....................................................................................12
ATTACHMENT 4 – EQUIPMENT RENTING COMPARISON.........................................................13
ATTACHMENT 5 – COMPLETE LIST OF AVAILABLE RENTAL EQUIPMENT...........................14
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1 INTRODUCTION
The following PROPOSAL REPORT is structured in such a manner to include
initial shipping and logistics plan, shipping price comparisons, and comparison
between shipping own equipment from Saudi Arabia to Bulgaria versus rental
from Europe.
The aim of this report is to identify and select the optimum option for shipping
and renting of Construction Equipment in order to execute pipeline construction
work by own Arkad E&C construction team and to achieve the successful
completion of all the activities involved for Part A9 by May 2020 and Parts A1,
A2, A3 and A4 at a subsequent stage.
The conclusion shall take into consideration time, cost and other obstacles to
finally ensure a smooth and planned mobilization of both equipment and related
manpower.
After final selection, by the Management, of the option including the selection of
the suppliers and service providers. Following detailed plans and reports shall be
prepared and submitted:
A. Shipping and Logistics report of complete operation from Dammam to
Jobsite and anticipated plan for demobilizing, transporting and shipping
back to Dammam. This report shall also include the anticipated plan for
transporting the equipment between the job sites.
B. A detailed procedure for Storing, Handling and Maintaining the Equipment
fleet.
C. Planning and Cost report.
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2 DEFINITIONS

PROJECT EPC Expansion of Bulgartransgaz Pipeline –

Linear Part

COMPANY Bulgartransgaz (BTG)

CONTRACTOR ARKAD
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3 SCOPE OF WORK

The scope of work includes shipping and transporting of Arkad E&C

construction equipment as per attached list (refer to Attachment-1) overseas
from Dammam Port to Varna Port in Bulgaria and further by indland
transportation to Pleven on Temporary Importation Basis. The selected
shipping company/forwarder shall be responsible for the complete operation
from Dammam to Pleven.

3.1 SCOPE BREAKDOWN & RESPONSIBILITY

SL. ARKAD
DESCRIPTION ARKAD E&C FORWARDER
NO. BULGARIA
Preparation & Mobilization to Dammam
1 X
Port
Documentation for Custom and
2 X
Shipping
3 Custom Clearance Dammam X
4 Dammam Port to FAS (Free Along Ship) X
5 FAS to FOB X
6 FOB to CFR Varna X
7 Custom Clearance Bulgaria X
8 CFR to DDU Pleven X
9 Cargo Marine Insurance X
Inland Transportation Insurance
10 (already covered under existing CAR X
insurance)
CAR for Construction Machinery
11 (currently not covered under existing X
CAR insurance)
12 Operators for Equipment X
13 Maintenance of Equipment X
14 Spare Parts for Equipment X
15 Demobilization from Site X
Table 1 - Responsibility Matrix
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3.2 SHIPPING PROCESS

EXW FAS** FOB

DDU CFR

Figure 1 - Shipping Process Schematic

Above schematic illustration reflects the shipping process with applicable

incoterms, the green by Arkad E&C and blue by the selected forwarder avoiding
any grey areas.
**Even though Arkad E&C will deliver on FAS Basis, the custom clearance shall
be taken care of by the selected Forwarder who is handling the rest of the
operation.

4 PREPARATION & MOBILIZATION

It is Arkad E&C Saudi (Unique Lines) responsibility to perform maintenance,
prepare in containers and mobilize the equipment to Dammam Port Gate ready
for hand-over to the forwarder along with all required documentation for further
export and temporary importation to Bulgaria.
Arkad E&C Saudi confirmed that they are not able to provide the equipment on
FAS basis, hence this shall be the responsibility of the forwarder.
Reference to the Mobilization Agreement (Attachment-2) provided by Unique
Lines the mobilization cost is SAR 1,750,000 (Euro 422,269). Which shall cover
the before mentioned activities.

5 SHIPPING SCHEDULE
Following anticipated schedule for the complete operation, reflecting maximum
and minimum duration based on received offers from the forwarders:
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SL. DURATION DURATION

DESCRIPTION DATE MAX. DATE MIN.
NO. MAX. MIN.
Preparation & Mobilization to 30
1 2 weeks 30 November 2 weeks
Dammam Port November
16
2 Transit time (Sea) 25 days 25 December 16 days
December
23
3 Tranist time (Inland Bulgaria) 20 days 13 January 7 days
December
Table 2 - Shipping Schedule

6 SHIPPING COST SUMMARY

Following price summary reflecting the lowest bidder. Refer to Attachment-1
for complete comparison:
SL. PRICE IN
DESCRIPTION
NO. EURO

1 Custom Clearance in Saudi Arabia As per actual

2 Loading & Sea Freight 420,632

3 Port Charges 101,777

Custom Clearance & Temporary Importation Charges in

4 As per actual
Bulgaria

5 Delivery Cost to job site 216,965

6 Cargo Marine Insurance All Risk 5,750

7 TOTAL 745,124

8 VAT Charges (Refundable) 2,227,219

Table 3 - Shipping Price Summary

7 HIRING COST ARKAD EQUIPMENT

Following table shows the hiring cost per month as per the Hiring Agreement
received from Unique Line. Reference to agreement Attachment-3:

TOTAL
SL. MONTHLY
CATEGORY DESCRIPTION QUANTITY MONTHLY
NO. RATE (€)
COST (€)
Terex Mobile Crane 30
1 Crane 4 8,400 33,600
ton
Terex Mobile Crane 50
2 Crance 2 12,000 24,000
ton
Terex Mobile Crane 80
3 Crane 1 16,800 16,800
ton
4 Dozer CAT D8 2 10,560 21,120
5 Dozer CAT D9 2 12,000 24,000
6 Excavator CAT 20 ton 1 5,400 5,400
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7 Excavator CAT 50 ton 1 10,800 10,800

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8 Grader CAT motor Grader 14M 2 7,920 15,840

9 Sideboom CAT 90-95 ton 20 18,000 360,000
10 Sideboom Superior 60 ton 3 16,800 50,400
11 Wheel Loader CAT 950H 1 6,000 6,000
12 Wheel Loader CAT 966H 2 7,200 14,400
13 Air Compressor 375 CFM 6 2,160 12,960
14 Bending Machine Vietz 42”-56” 2 36,000 72,000
15 Pay Welder Vietz 1800 10 6,240 62,400
16 Habitat 56” 10 240 2,400
17 Vaclift Vietz 25 ton 3 3,120 9,360
18 Vaclift Vietz 16 ton 1 1,440 1,440
19 Welding Machine Miller 500 Bigblue 16 589 9,424
20 Padding Machine SPD 450 2 28,800 57,600
Pipe Facing
21 CRC 50”-60” 1 6,000 6,000
Machine
Automatic CRC Welding CPU (6 unit
22 6 27,000 27,000
welding set)
Automatic CRC Welding head (6 unit
23 6 27,000 27,000
welding set)
Automatic CRC Wire feeder (9 unit
24 9 10,500 10,500
welding set)
Automatic
25 CRC HPU (per unit) 2 7,500 15,000
welding
26 CRC workshop CRC Workshop 2 3,000 6,000

27 TOTAL MONTHLY COST 117 901,444

Table 4 - Arkad Equipment Hiring Cost

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8 COMPLETE COST
Following cost summary for the complete operation of shipping and hiring
Arkad Equipment from Saudi Arabia for 6 months or 1 year. The cost does not
include operators, maintenance and spare parts for the Equipment.
SL. PRICE IN EURO PRICE IN EURO
DESCRIPTION
NO. (6 months hiring) (1 year hiring)

1 Mobilization Cost to Arkad E&C 422,258 422,258

2 Shipping Cost (Dammam to Pleven) 739,374 739,374

3 Hiring Cost 5,408,664 10,817,328

Anticipated Shipping Cost (Pleven to

4 739,374 739,374
Dammam)

5 Demobilization Cost to Arkad E&C 361,936 361,936

6 TOTAL 7,671,606 13,080,270

Table 5 - Complete Cost Summary

9 EQUIPMENT RENTAL
European equipment rental suppliers were approached to quote for Civil and
Mechanical equipment required for the pipeline construction work, in order to
complete the comparison and analyse the feasibility of shipping the equipment
from Saudi Arabia.
The European suppliers will also be utilized as back-up source for any
additional Mechanical equipment required and for complete Civil and earth
moving equipment fleet, that are not being shipped from Saudi Arabia.

9.1 RENTAL PRICE SUMMARY

Following table summaries the rental equipment cost for a rental duration of 6
months. For complete list and comparison refer to Attachment-4. Below prices
do not include operators, maintenance and CAR insurance.
SL. PRICE IN EURO
DESCRIPTION QUANTITY
NO. (6 months rental)

1 Dozers 10 530,400

2 Wheel Loaders 5 152,400

3 Side Booms 22 1,231,200

4 Pipe Bending Machine 1 150,000

5 Bending Mandrel 1 30,000

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6 Internal Clamp 1 30,000

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7 Excavators 19 805,800

8 TOTAL SUM EQUIPMENT RENTAL 59 2,929,800

9 Shipping Cost (Antwerp to Pleven) 712,675

Anticipated Shipping Cost (Pleven to

10 712,675
Antwerp)

11 TOTAL 4,355,150

Table 6 - Equipment Rental Price Summary

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9.2 SCHEDULE FOR RENTAL EQUIPMENT

Following schedule for rental equipment to arrive on site from Europe, based on
offer from Ras Al Khaima (Netherlands and Belgium).

SL.
DESCRIPTION DURATION
NO.

1 Mobilization to Antwerp Port (FAS) 2 weeks

2 Transit time (Sea) 25 days

Tranist time (Inland Bulgaria) to

3 7 days
Pleven

Table 7 - Rental Equipment Schedule

9.3 ARKAD AND RENTAL EQUIPMENT COMPARISON

Refer to Attachment-4 for comparison of Arkad equipment versus European
rental equipment suppliers.

10 CONSLUSION
Taking into consideration the time and cost required for the construction
equipment in addition to the shipping challenges, it is recommended to split the
scope in two parts that combined will fulfil the requirement for a complete
construction fleet serving 2 welding spreads.
Part 1, shipping of all mechanical equipment from Arkad E&C Saudi Arabia.
Part 2, renting earth moving and civil equipment from Europe.
With this combination we avoid shipping heavy civil equipment from Saudi
Arabia that are available in Europe, which will save time and cost. Furthermore
it will allow us to start the civil activities such as ROW and Excavation until the
Mechanical equipment arrives. Moreover this will also allow for a controlled
and gradual planned manpower mobilization per type or discipline.

11 ATTACHMENT LIST
Attachment 1 – Equipment Shipping Comparison
Attachment 2 – Mobilization Agreement
Attachment 3 – Hiring Agreement
Attachment 4 – Equipment Renting Comparison
Attachment 5 – Complete list of available rental equipment from Europe
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ATTACHMENT 1 – EQUIPMENT SHIPPING COMPARISON

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ATTACHMENT 2 – MOBILIZATION AGREEMENT

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ATTACHMENT 3 – HIRING AGREEMENT

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ATTACHMENT 4 – EQUIPMENT RENTING COMPARISON

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ATTACHMENT 5 – COMPLETE LIST OF AVAILABLE RENTAL EQUIPMENT

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