Transfer Risk - Accelerate Closure (Trac™ ): A Fixed-price Contract Program For Site Remediation/case Closure

The TRAC™ Program was developed to provide our clients with a mechanism that allows them to better manage site remedia­tion and closure costs. This program provides a fixed-price contract for site remediation and case closure and is well suited for large pro­jects with multiple PRPs, such as Superfund sites. Because Kvaerner is a large engineering/construction firm and not a consult­ing firm, we can offer this type of contracting mechanism that envi­ronmental consulting firms are hesitant or unable to provide. With TRAC™, Kvaerner assumes financial and technical responsibilities for carrying a site through the closure process for a fixed price. Liabilities carried on our client's balance sheet for site closure can be removed when they sign up forTRAC™. In many instances, a profit can be realized as the liability on the balance sheet may exceed our TRAC™ fixed-price cost to close the site. Bonds and other sureties securing the site can be released and set­tlement with other involved parties can be quickly reached. For a project to be considered for this program, it typically meets the following criteria: 1) The project site should be physically separated from other contaminated sites 2) A reasonable quantity of site investigation data must be avail­able including site-usage history with or without a projected fea­sibility study(ies) and/or remediation design 3) Access to perform all necessary work must be available. After a review of all site data, K vaerner develops a "risk menu" to manage financial risks. In this "menu", each compo­nent of the project is assigned a level of probability that the costs will occur. Then the base cost of each activity is "weighted" by multiplying the potential cost growth by the probability. This analysis assures that the financial risks are appropriately defined, weighted, and mitigated and a realistic fixed price is developed. Upon acceptance of our proposal and conclusion of contract negotiations, Kvaerner takes over future responsibility for clos­ing your site. This allows the client to: 4) Release reserves obligated on financial statements for the site (and potentially realize a profit if the TRAC™ fixed-price cost is less than our client's booked obligation) 5) Finalize cost settlement with other responsible parties, insur­ers, etc. 6) Redirect resources involved in the environmental manage­ment of the site 7) Cap legal and administrative costs In addition to performing the site cleanup and closure work, at our client's request we are able to: 8) conclude lease obligations for property 9) dispose of equipment and buildings