Final minutes of meeting

The Contractor shall be responsible to provide its legal operating licences, for example, foreign contractor licence in Vietnam to the Employer to complete the procedures for obtaining c

MINISTRY OF TRANSPORT

VIETNAM EXPRESSWAY

CORPORATION

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No: /BB-VEC

SOCIALIST REPUBLIC OF VIETNAM Independeance – Freedom – Happiness

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Hanoi, 5 th 3 March 2009

MINUTES OF CONTRACT NEGOTIATION Package A1 – Noi Bai- Lao Cai Highway Construction Project

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In accordance with Document No.396/ QD-BGTVT dated 23 February, 2009rd

by Minister of MOT on approval of Bid evaluation results for pPackage A1- Noi Bai-Lao Cai Highway Construction Project (Stage 1), tThe contract negotiation for the package A1, chaired by General Director of Vietnam Expressway Corporation, is held from 3rd to 54th March 2009 at the conference room, 6th floor, head office of VEC The participants are asThe contents are as follows:

A PARTICIPANTS

11) Vietnam Expressway Corporation (VEC) (Employer):

- Mr Trần Xuân Sanh - General Director- Chief negotiator

- Mr Nguyen Ngoc Thach- Attorney at law- nhquang& associates

- Mr Trần Ngọc Hoàng – Deputy General Director, in charge of the project

- Mr Mai Tuan Anh- Deputy General Director, in charge of technical issues

- Mrs Phạm Thị Thanh Khuya- Head of Inspection Committee

- Mr Lương Quốc Việt – Chief Accountant

- Mrs Phạm Thị Hồng Hương – Head of Apprasial Department

- Mr Phạm Hồng Quang – Head of Quality, Technical and Environment Mangement Department

- Mr Lê Hoàng Tùng – Head of Project Department

- Mr Trần Hữu Vĩ – Vice Head of Planning Department

- Mr Dao Quang Tuan, Vice Director of EPMU, Noi Bai-Lao Cai

- Mr Lương Quốc Việt – Chief Accountant

2) POSCO Engineering&Construction Co.,ltd (Contractor):

- Mr Park, Yong Soo - Project Director- Chief negotiator

- Mr Nam, IZl Kwon – Vice Deputy General ManagerDirectorof Infrastructure- Co-chief negotiator

- Mr Park, Han Su – Chief Representative in Vietnam Office

- Mr Kim, Ji Hyung – Lawyer

- Mr Kim, Young Gi– General Manager

- Mr Park, Hyun Soung – Deputy General Manager

- Mr Shin Seung Sik – Project Specialist

- Mr Lee Sang Don– Project Specialist

- Mrs Nguyễn Thị Bích Thủy– General Manager in Hanoi Office

Posco’s representatives (hereinafter referred to as the Contractor) submitted a Power

of Attorney and business registration certificate of Posco E &C to VEC (hereinafter referred to as the Employer) VEC requested Posco to get the above mentioned documents legalised by the Korean Embassy in Vietnam and a notarised translation thereof in accordance with Vietnam’s law

Before the meeting, Chief negotiator of the Employer announced Decision on bid results for this package and delivered it to the Contractor’s representatives As requested by the Employer, the Contractor submitted a Power of Attorney for authoried representatives of the Contractor to participate in the negotiation and to sign the Contract

After considering the legal documents, the Employer requested the Contractor

to get the documents legalised by the Korean Embassy in Vietnam and a notarised translation thereof in accordance with laws of Vietnam The Contractor confirms to sastify the above-mentioned requirements

B CONTENTS OF NEGOTIATION

The two parties hasve negotiated, clarified and agreed on the following contents:

I/ TECHNICAL ISSUES:

1 Local administrative scope

1.1 Construction licence:

The Employer shall be mainly repsonsible for obtaining a construction licence for Package A1 – Noi Bai-Lao Cai Highway pProject in accordance with the laws of Vietnam The Contractor shall be responsible to provide its legal operating licences, for example, foreign contractor licence in Vietnam to the Employer to complete the procedures for obtaining construction licence

1.2 Overall plan, schedule of the package:

The Contractor confirmsed that it shall submit the overall plan and schedule of package and detailed construction schedule in accordance with the approved construction schedule of the package of 40 months These overall plan and schedule of package and detailed construction schedule shall be submitted for the Engineer’s acceptance within 28 days from the date of the Employer’s Notice of Commencement

of the Project and the Engineer must submit those for the Employer’s approval Only route section of commencement of the Project shall be planned by March 25th 2009

to the Employer and Engineer for their approvals within 28 days from the date

of the Employer’s notice of commencement of the Project The two parties will discuss

in details the route section for commencement of the Project in another meeting

In case the actual construction schedule is not in accordance with the Contract

or not in compliance with the approved overall plan, the Employer, based on the Engineer’s proposal, shall consider the Contractor’s responsibilities and settle in accordance with provisions on bonus and penalty for their approval at any time during the implementation of the Contract

1.3 Design of construction drawing:

The Contractor confirmsed to complete and, finalise thehe whole design of construction drawing prior to construction, ensuring the overall schedule within 90 days from the date of notice of the Investor of award However, for the route located in Tam Duong District, Vinh Phuc Province shall be completed and submitted to the Employer and the Engineer for their approval before 25 March 2009

1.4 Organisation, Executive Personnel of the Site Construction:

Within 5228 days from the date of receipt of Lletter of Aacceptance, the Contractor shall complete the setting up of a Site organizationan Executive Committee

of the Project and obtain the operating licence and seal for the Site organizationExecutive Committee in accordance with the laws and regulations of Vietnam The site organizationExecutive Committee shall have a suitable premises which is well-equipped and convenient for the package managemente operating of the Site Construction: meeting room, working room for staff, computers, photocopy machine, telephones and means of transport such as: car, motorbikes etc

1.5 Operating licences of the Contractor in Vietnam:

The Contractor shall be responsible for provision of its legal operating licences

in Vietnam tofor the Employer to complete the procedures for obtaining construction licence

1.6 Sub-contractors (if any):

The Contractor shall submit a list of the Sub-contractors (if any) in accordance with the relevant requirements in the Contractfor the Employer to consider and approve prior to implementation In order to meet up with the schedule for commencement of the Project, the Employer request the Contractor to mobilise work force for construction drawing and acceptance of construction, site clearance prior to

25 March 2009 The Contractor unanimously agreed with the above requirements

1.7 Construction method of the package:

The Contractor confirmsed to submit the detailed construction method of each items in accordance with technical requirements and technical specifications inguidelines of the bidding documents forto the Employer and the Engineer’s for their

approvalcceptances prior to carrying out the construction

In case of necessity of supplemental survey, the Contractor shall have to establish a detailed outlines of works to submit to the Employer and the Engineer for their approvals prior to implementation thereof Supplemental survey shall comply with the standard framework of the Project which has been approved by the Ministry of Transport, expenses for supplemental survey shall be paid from budget of the package which has been awarded

The Contractor confirmsed to satisfy all conditions on personnel and equipment of the bidding documents For conditions required in the Bidding Document which the Contractor has not yet provided in the Contractor’s bid documentssatisfied, the contractor it commits to fulfil such conditions fully in accordance with the biddding documents

1.8 Site Layout Scheme:

The Contractor is required to reestablish site layout in accordance with actual conditions of the Package to submit for to the Employer and the Engineer’s for their consideration and approvalacceptance together with organisation of implementation

of the package

1.9 Method of Construction Quality Management:

The Contractor confirmsed to submit quality management system plan as soon

as possible uponafter receipt of the Employer’s Lletter of Aacceptance

This plan shall comply with requirements set out in the bidding documents of the Project as well as current regulations on quality management of Vietnam

1.10 Methods of labour safety, environemental sanity, HIV/AIDs Fighting

The Contractor confirmsed to establish plans and measures for ensuring labour safety during the construction in accordance with requirements of the bidding documents and in compliance with regulations of the SponsorADB and the Government of Vietnam

The contractor confirms to set up plan and measures of environmental sanity during the package contruction in accordance with the Bidding Documents and Vietnam relevant regulations and ADB’s relevant policies

The Contractor confirmsed to coordinate with social organisations to carry out HIV/AIDs fighting measures in accordance with the Project’s program

1.11 Material Resource Scheme:

The Contractor confirmsed to officially submit forto the Supervision ConsultancyEngineer’s acceptance and the Employer material supplying sources satisfying quality standard and technical requirements of the bidding documents Material supply sources may be changed as compared to the bidding documents, however, quality standards and awarded unit prices shall be kept unchanged

1.12 Meeting for progress review:

The Contractor confirmsed to comply with the requirements for meetings to review package construction progress as requested by the Employer and Supevision Consultant.Engineer

1.13 Reports of the Contractor:

In order to ensure the quality of meetings, the Contractor shall prepare fully reports updating progress of implementing the Package for each meeting for the Employer and Engineer to review the monthly and quarterly quality progress and extraodinary meetings if the Employers thinks necessary

Language of reports shall be in English and Vietnamese, however, English version shall prevail

1.14 Control, Inspection, auditting:

The Contractor confirmsed to provide documents related to the package and explain fully to control, inspection, auditting bodies of the Employer, relevant authorities of the Government and the SponsorADB if required

2- Site Scope:

2.1 Construction of site office, laboratory, warehouse:

The Contractor confirmsed to construct site office, laboratory, warehouse in accordance with the approvedoverall plan.which has been approved by the Employer 2.2.Survey, design of construction drawing:

The Contractor confirmsed to survey and design the construction drawing in accordance with the approved overall plann which has been approved by the Employer

Other preparation works:

The Contractor confirmed to carry out other preparation works in accordance with the plan which has been approved by the Employer

2

3 Site hand-over

The Employer and the Contractor confirmsed to coordinate with each other for site hand-over from local authorities and hand over the same tto the Contractor

2

4 2.5 Mobilisation works of the Contractor

The Contractor confirmsed to mobilise personnel and equipment in accordance with the requirements set out in the bidding documents A part of personnel and equipment shall be mobilised earlier in order to satisfy timely and fully commencement works of the package The mobilization before the date of commencement shall not be accounted into the duration of the Contract (Volume shall

be discussed by the parties in details in another meeting for commencement of the Project.)

2.5.Other preparation works:

The Contractor confirms to carry out other preparation works in accordance with the approved overall plan requirements set out in the bidding documents A part of personnel and equipment shall be mobilised earlier in order to satisfy timely and fully commencement works of the package (Volume shall be discussed by the parties in details in another meeting for commencement of the Project.)

II/ FINANCIAL ISSUES

1 Finance

1.1 Contract price value:

Prior to the signing of the Contract, the Contractor shall submit an analysis of unit prices of all items in Bill of Quantity (excluding lump-sum and provisional sum ipackaged items and estimated items) in accordance with bidding prices after correction of differences and errors Detailed unit prices shall set out reasonably bidding prices and include all actual expenses of the Contractor such as personnel, machinery, material, taxes etc and shall be less or equal to total unit prices as set out in the bidding documents The Employer shall review the reasonability of detailed unit After being approved by the Employer, the detailed unit prices shall be a part of the Contract During the implementation of the Contract, if there is any technical changes

as well as other changes, the detailed unit prices shall be one of basis for the Employer and the Contractor to negotiate for adjustment

1.2 Payment currencies

The contractor confirms the weighting of payment currencies similar to that in submitted bid:

- 30.31% in USD foreign currency (USD)

- 69.69% in VND local currency (VND)

This weighting will remained unchanged in each payment and during contract implementation

1.3.Exchange rate

The exchange rate is the selling rate at 28 days before deadline of Bid submission and announced by Vietcombank at 10:00 am (Hanoi times) on October 13th 2008, i.e 1 USD= 16,.620 VND

This exchange rate is fixed, and unchanged in each payment and during contract implementation

1.4.Taxes

The cContractor is responsible for tax registration, declaration and payment of all relevant taxes in accordance with the requirements in Bidding dDocuments and other existing regulations in Vietnam The contractor will provide the relevant information

and evidence accurately, quickly and timely for the employer’s review and supervision

2 Financial CContingencies

The Employer and Contractor agree that the contingencies areis the employer’s own cost and areis used for payment of additional items due to physical and price fluctuation and other changes unexpected by Tthe eEmployer

3.Price adjustment

The price adjustment is carried out for payment currenciesy payment required in the

bBidding dDocuments and in accordanceing to with the calculation formulas in the Bidding dDocuments

Base price indicesexes (“o” indexesindices) is fixed at 28 days before bid opening (i.e

13th October, 2008)

The current price indicesexes for payment are identified at 28 days before acceptance

of completed civil works

It is cClarify and confirmed that weighting of relevant indexesindices is in accordance with the Bidding Documents

:

+ non-adjusted price : 0.2

+ Labor price adjustment: 0.12

+ Fuel price adjustment: 0.1

+ Cement price adjustment: 0.16

+ steel materials price adjustment: 0.16

+ Bitumen materials price adjustment: 0.16

+Machine shift price adjustment: 0.1

The base and current price indexes are taken following Hanoi-based General Statistics Office of Vietnam for the following cities and provinces within package area: Hanoi City and Vinh Phuc province, and are calculated for the following factors: labor, machine shift, fuel price, cement, steel, and bitumen

The Contractor must sign the contract with the General Statistics Office of Vietnam on providing the official price indexes for the project and submit it to the Employer before the contract signing Every month, tThe cContractor must submit the original of price indexesindices tofor price adjustment for the Engineer and the Employer.’s review and approval

The equipment price index follows the price regulation of equipments exported from G5 industrial countries ( France, Germany, UK, Japan, and US) to market of the developing countries in US Dollar and converted to Vietnam Dong (VND) with exchange rate at the time of calculation The regulations are issued twice a year by World Bank and the original one will be submitted to the engineer and the employer as

a basis of price adjustment

The remaining conditions follows the requirements in the Contract

4 Lump sump items

The Contractor confirmsed to implement the lump sump items in accordance with the requirements specified in the Bidding DocumentsITB

The Contractor hasis to submit the detail construction methodology for service road construction The design drawing for road service road should be submitted by the Contractor to the Employer and Supervision Consultant for their approvalshall be submitted for the Engineer’s acceptance

The Contractor also confirmsed to maintain the local existing transportation road to avoiding negative bad impacteffects to the local residents’ life site surrounding residents’ life

5 Provisional SumTemporarily estimated items

Provisional Sum items Temporarily estimated items are to be complied with requirements in the Bidding DocumentsITB, the payment should be accepted by the

Employer and the Supervision ConsultantEngineer and approved by the Employer

6 Advance payment and reimbursement of advance payment

Advance payment is 10% of contract price excluding the contingency The Advance payment and reimbursement of advance payment shall be in accordance

towiththe Bidding DocumentsITB

7 Advance Payment Security Bond and Contract Performance SecurityBond

The Contractor confirmsed to submit the Contract Performance SecurityBond

and Advance Payment SecurityBond in accordance withto requirements specified in

the Bidding DocumentITB The Contractor is to submit a Contract Performance Security Contract Performance Bond from a reputable bank accepted by the Employer The Contractor is to submit the Contract Performance Security Contract Performance Bond and Advance Payment Bond to the Employer before signing the Contract

8 Progress payment for completed work quantities.

The value of each instalment progress paymentshall beisat least VND 5billion

in minimum, interval of payment instalmentevery progress payment is one month as specified in the Bidding DocumentsITB

9 Insurance

The Contractor is the party who is responsible for buying insurance for the package and other insurances specified in the Bidding DocumentsITB and regulated in other current regulations

The Contractor is responsible for buying insurance within the project’s overall insurance plan, ensuring risk management for the whole project

The insurance will be carried out by the an Insurer operating legally coming from eligible countries and under legal operation in Vietnam, being in ADB’s list of eligible

countriesto requirementsof the Donor and being approved by the Employer

The Employer shall set up the master insurance program for the project ensuring the risk management for the project The Contractor is to comply the master insurance program for project set up by the Employer

The Insurer for the project shall haves: (i) full legal capacity according to the Law on Insurance Business (ii) full experience and capability to serve the insurance need of the project and implemented insurance contract for infrastructure project of equivalent scale and standards in Vietnam (iii) insurance terms and conditions satisfying the risks of the project, and (iv) the 1st re- Insurer should be ranked A according to International oOrganization’s aAssessment

The Insurer is to provide a list and information of 1st Insurer and other re-Insurers participating in the insurance for the package

Within 28 days fromsincedate of the notice of commencement for the package, if the Contractor will havehas nott completed buying insurance for the package, the Employer shall select insurers and shall not pay the amount for insurance to the Contractor

10 Defect liability periodRetention amount

The retention for Defect liability period shall be the work shall be deducted 3% from

every progress each payment instalment as stated in the Bidding Documents.ITB

11 As-built Documents and payment documents

The contractor confirms to take its full responsibility for completing the as-built procedures as soon as one item is finished and be in accordance with the existing regulations

12 Remittance charges

Remittance charges from ADB to the contractor’s account are subjected to the shall be incurred by the Contractor

13 Indemnity due to Progress delay

In the case of Progress delay, thThe Employer and the Engineer will review the causes

of delays and deal with it in accordanceing withto relevant conditionsprovision on bonus and penalty of in Contract

IIIIV / Amendment and Addition of Particular Conditions of Contract

During the negotiation of the Contract, in consideration of the parties’ rights and interests, the Employer and the Contractor unanimously agree to amend and add a number ofcertain particular conditions of contract During the implementation of the Contract, the following amended particular conditions shall prevail over those in the bidding documents

2.2 Permits, Licenses

or Approvals

Replace the contents in particular condtions (subclause 2.2) with the following new paragraph:

The Contractor including his appointed agent shall be responsible for obtaining and completion of custom clearance with the Custom Office for the Contractor's Equipment, materials and other things required for the Works, and for obtaining of the Government's consent to and for completion of the re-export of the Contractor's Equipment.

4.2 Performance

Security Replace second paragraph in General Conditions (subclause 4.2)with the following new paragraph:

The Contractor shall provide the name of the bank who shall issue the Performance Security for the Contractor to the Employer within 10 days from the date of receipt of the letter of acceptance for the Employer’s approval and shall deliver the Performance Security to the Employer within 28 days after receiving the letter of acceptance Performance Security shall be issued by an entity and from a country (or other jurisdiction) approved by the Employer, and shall be in the form annexed to the Particular COnditions or in other forms approved by the Employer.

4.4 Subcontracting Add new paragraphs after the final paragraph of the particular

conditions (subclause 4.4):

The sub-contractor is experienced and competent in relevant works proposed to be subcontracted Following are some main requirements for consideration of capabilities of sub-contractors: (1) Main labours have sufficient experience in accordance with

requirements and also they are not permitted to participate

in other projects at the same time.

quantity and quality to satisfy the demand of the subcontracted works.

carrying out sub-contracted works.

projects must be in line with the scope and nature of the sub-contracted works

(5) In case of necessity, the Employer may request

sub-contractors to furnish evidences to confirm its capability in labour, experience, equipement ownership right, auditted accounts and tax confirmation.

(6) If the Employer discover any Sub-contractor has been

participating in other projects not ensuring the project progress and quality or there is any frauds in declaration

of capabilities in items (1), (2), (3), (4) and (5) mentioned above, the Employer shall be entitled to suspense and replace sub-contractors.

The Contractor shall provide an original of the Sub-Contract to the Employer and the Engineer

4.8 Safety Procedure Replace and add contents of particular conditions (subclause 4.8):

A Replace the paragraph (f) of particular conditions (subclause 4.8)

as follows:

(f) The contractor shall use explosives only when the nature of the work requires In such case, in addition to complying with the legal requirements on the purchase, transport, storage and handling of explosives, the Contractor shall, when using