I, Overview of Signing Contract
Weixian HBP Environmental Science and Technology Co., Ltd., (Hereinafter referred to as “Weixian HBP”) a wholly owned sub-subsidiary by China Oil HBP Science & Technology Corporation Ltd. (Hereinafter referred to as "company", “HBP”) signed Integrated Sewage Treatment Plant and Water Reuse PPP Project contract with Xingtai Environmental Protection Bureau Weixian Branch on March 14th, 2018. The total investment of the first phase is RMB483,853,300.
II, Introduction of Owner and Project
1, Brief Introduction of Owner
Owner: Xingtai Environmental Protection Bureau Weixian Branch
Domicile: No. 36 Kaifang East Road, Weixian County, Xingtai City, Hebei Province
The owner party is a functional department under the jurisdiction of the Weixian People's Government established and existing in accordance with the Chinese law and authorized by Weixian People's Government as the implementing agency of this project.
In the most recent fiscal year, the company has no similar major business transactions with the owner, and there is no association between the company and the owner.
2, Project Background and Purpose
In order to accelerate the construction of urban infrastructure, implement the sewage treatment franchise project in accordance with the requirements of relevant laws, regulations, standards and norms, and meet the sewage treatment requirements of Weixian county, the Weixian People's Government has decided to grant HBP the franchise right to invest and operate this sewage project through PPP mode which is to invest in the building of Integrated Sewage Treatment Plant and Water Reuse PPP Project in the way of "Build-Operate-Transfer (BOT)", so as to improve the ecological environment of Weixian and improve the public environmental water treatment of Weixian. Upon completion, the project will meet the urban development needs of Weixian from 2020 to 2030, solve the problem of rainwater and sewage confluence in the existing urban sewage pipe network of Weixian, and provide water reuse services for investment enterprises, urban greening and road spraying in Weixian.
III, Main Contents of Contract
1, Project Name: Integrated Sewage Treatment Plant and Water Reuse PPP Project
2, Party A: Xingtai Environmental Protection Bureau Weixian Branch
3, Party B: Weixian HBP Environmental Science and Technology Co., Ltd.
4, Investment Amount: RMB483,853,300
5, Project Location: Weixian County, Xingtai City, Hebei Province
6, Project Scope: 1 sewage treatment plant (phase I treatment capacity of 50,000 tons/day, phase ii treatment capacity of 50,000 tons/day, total treatment capacity of 100,000 tons/day after construction), 300 km of sewage network (107.205 km for phase I construction), reuse water network 47.916 km.
7, Scope of Franchise:
Party A grants Party B the franchise right of investment, financing, design, construction, operation, maintenance and handover of Integrated Sewage Treatment Plant and Water Reuse PPP Project during the cooperation period including:
(1) Undertaking the investment, design and construction of Integrated Sewage Treatment Plant and Water Reuse PPP Project.
(2) Undertaking the operation and maintenance of equipment and facilities in Weixian integrated sewage treatment plant and supporting sewage and water pipe network outside the plant. Sewage treatment fee, pipe network availability fee and maintenance fee shall be charged according to this contract.
(3) Upon expiration of the cooperation, Party B shall transfer the project assets and rights and interests to Party A free of charge in accordance with the contract.
8, Cooperation Period: 30 years, including 2 years for construction and 28 years for operation
9, Payment Mechanism: According to relevant national laws and regulations, government departments shall collect sewage treatment fees from water-related enterprises and tap water users (industrial and commercial households and residents), and then pay them uniformly. For sewage treatment plant fee, usage fee + performance appraisal fee will be adopted. The initial unit price of sewage treatment is 1.99 RMB /m³ (The daily basic water quantity is 35,000 m³ /d in the first year, 4,000 m³ /d in the second year, 45,000 m³ /d in the third year, and the designed capacity in the fourth year and thereafter is 50,000 m³ /d, if the basic amount of water is not reached, the sewage treatment fee will be calculated according to the basic amount of water). Part of the network fee is paid for availability, with an annualized return on investment of 6.5%.
10, Dispute Resolution: Any dispute, difference or claim arising out of this contract shall be settled through amicable negotiation. If the parties fail to settle the dispute through amicable negotiation, either party shall have the right to submit the dispute to Xingtai arbitration commission for arbitration in accordance with the arbitration rules then in force.
China Oil HBP Science & Technology Corporation Ltd.
Board of Directors
March 15th, 2018
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