From recent announcements: Construction works covered under the...

From recent announcements:
Construction works covered under the stage 1 construction agreement includes bulk earthworks; extensive
foundation piling; the construction of retaining walls; underground storm water/process discharge tanks ………….
Engineering works incorporated in the stage 1 construction program include the finalisation of
layout drawings and the construction permitting process (Development Order) from local authorities.

The stage 1 agreement covers the first 6-7 months of the proposed two year construction period. The value of
the works is approximately A$10 million, the majority of which will be credited against the US$280 million
lump-sum fixed-price HPA plant EPC contract awarded to SMS which will commence following finance close.

The detailed geotechnical survey is part of HPA plant Stage 1 construction activities. The works include an assessment of soil types, soil stability and a detailed assessment of site topography; each being required to confirm the HPA final plant’s civil engineering design. A full analysis of the site soil profile will be used to confirm the final foundation piling requirements.

The requirement for extensive foundation piling has been known publicly for approx. 4 months. SMS would have had a good idea of the soil geology very early on, probably covered in the original M&W design work. We are building in an established industrial park with many other big plants around us, so I’m pretty sure the local geotechnical engineering companies would have access to a comprehensive database of this information.
That would have been enough for SMS to confidently estimate foundation costs.
The announcement talks about ‘to confirm the HPA final plant’s civil engineering design’ and ‘confirm the final foundation piling requirements’
Our site requires its own the detailed geotechnical survey to confirm what is already expected and to fine tune the final foundation requirements.
If something unexpected is found (the sink hole etc), then yes all bets are off and a negotiated solution has to be found and funded. All fixed price contacts have provisions for dealing with variations or highly improbable events.

‘The majority’ of the work which will be credited against the fixed-price HPA plant EPC contract.
What does majority mean, 51%, 95%? I’m going with 85%.
From the beginning all the design work has been funded by Altech. It has been a long, expensive process and we are still spending money on it. (The recent cap raise funds were stated as being partially used for this purpose). I’d love to know the total design expenditure!
For this reason, I believe ‘the finalisation of layout drawings and the construction permitting process (Development Order) from local authorities will be paid by Altech and not included in the fixed-price contract.

I agree with Arsenic the final contract has not been signed as that would be subject to successful close of finance, hence the split out of the stage 1 construction agreement that has been signed.