AN120071 – Boral Resources (NSW) Pty Limited Sydney Metropolitan Concrete Contract Determination

SCHEDULE 3 - RATE REVIEW & COST ITEMS

The following is a list of items that constitute the true cost model, the total cost for these items at the start of this Part B and the base cartage information on which initial rates have been developed.

Item #	Description	6 wheeler	8 wheeler
		$	$
1	Annual Wage	29,422.64	30,825.60
2	Slump Allowance	856.80	856.80
3	Workers Compensation	2,980.38	3,119.81
4	Annual Leave Loading	565.82	592.80
5	Long Service Leave	490.38	513.76
6	Superannuation	2,648.04	2,774.30
7	Casual Labour	2,482.25	2,598.91
8	Full Comprehensive Vehicle Insurance	2,923.00	3,300.00
9	Public Liability Insurance	330.00	330.00
10	Sick & Accident Insurance	693.00	693.00
11	Vehicle Funding	17,907.48	21,393.55
12	Registration Costs	1,065.82	2,379.00
13	Green Slip	1,698.18	2,379.00
14	Stamp Duty	593.36	709.93
15	Other Costs	3,637.60	3,637.60
16	Overtime Labour	15,187.80	15,912.00
17	Return on Asset	12,165.37	14,321.38
18	Fuel	9,676.75	9,993.80
19	Tyres	2,102.49	2,735.37
20	R&M	9,234.00	10,224.00
	TOTAL	116,661.15	129,290.61
Base Cartage Information
Average Loaded Kilometres		8.5	8.5
Loaded Kilometres Total		11050	10625
Total Kilometres Travelled		22100	21250
Average m3 per load		5	6
Loads Per Annum		1300	1250
Average Productivity		6500	7500

1. Review Period

(a) The following rate items are to be reviewed each January (annual review) and July (six month review), with the corresponding rate items in Schedule 1 impacted by the review adjusted on the 1st of February and the 1st of August each year respectively.

Item #	Description
18	Fuel
19	Tyres

The July review will involve the sourcing of prices as at the 30th June. Base cartage information will not be reviewed.

Prices far the January review will be based on prices as at the 31st of December and a review of the base cartage information.

(b) The following rate items are to be reviewed in January each year with the corresponding rate items in Schedule 1 impacted by the review adjusted on the 1st February each year.

Item #	Description
1	Annual Wage
2	Slump Allowance
3	Workers Compensation
4	Annual Leave Loading
5	Long Service Leave
6	Superannuation
7	Casual Labour
8	Full Comprehensive Vehicle Insurance
9	Public Liability Insurance
10	Sick and Accident Insurance
12	Registration Costs
13	Green Slip
15	Other Costs
16	Labour Overtime
17	Return on Asset
20	Repair and Maintenance

Prices for the January review will be based upon prices as at the 31st of December and a review of the base cartage information.

(c) The following items are to be reviewed every 7 years with the corresponding rate components impacted by the review adjusted on the 15th of July following the review.

Item #	Description
11	Vehicle Funding
14	Stamp Duty

(d) Despite the provisions in (b) above, should the Award be varied those items affected by any such variation shall be reviewed as:

(i) part of the January review if the variation is effective in November or December;

(ii) part of the July review if the variation is effective in May or June; or

(iii) a separate review effective 30 days after the variation is effective if the variation occurs in a month other than November, December, May or June.

1.1 Base Cartage Information Sources

Base cartage information is specific to a particular vehicle configuration for example loads per annum might be 1,300 for six wheelers and 1,250 for eight wheelers. The data gathered should be for the Operator fleet only for the 12 month period prior to the annual review in January (1st January to 31st December) and exclude work done by company vehicles and fleet owners. Information is based on Boral records for vehicles which have worked a minimum of 90% of the period from which the cartage information will be sourced.

(a) Loads Per Annum - is the average number of loads per annum.

(b) Loaded Kilometres - is the average docketed distances to the customers job site for delivery, this figure excludes any kilometres travelled for transfers.

(c) Loaded Kilometres Total - is the average total loaded kilometres travelled. This can be expressed as (Loads Per Annum x Loaded Kilometres)

(d) Total Kilometres Travelled - is the total round trip distance excluding any kilometres travelled on transfers. This can be expressed as Loaded Kilometres Total x 2.

1.2 Description of Review & Calculations

(a) Rate Component A = Retainer

The annual retainer payment is the sum of the total for each of the following fixed cost items. To determine the monthly payment the sum of these items is divided by 12 (months). The calculation must be done for each vehicle configuration with applicable source data.

Item #	Description	Rate Review Method
1	Annual Wage	Varied changes to Award
2	Slump Allowance	Change In Actual Cost
3	Workers Compensation	Change In Actual Cost
4	Annual Leave Loading	Varied by changes to Award
5	Long Service Leave	Varied by changes to Award
6	Superannuation	Change In Actual Cost
7	Casual Labour	Change In Actual Cost
8	Full Comprehensive Vehicle Insurance	Change In Actual Cost
9	Public Liability Insurance	Change In Actual Cost
10	Sick & Accident Insurance	Change In Actual Cost
11	Vehicle Funding	Reviewed every 7 years
12	Registration Costs	Change in Actual Cost
13	Green Slip	Change In Actual Cost
14	Stamp Duty	Reviewed every 7 years
15	Other Costs	Based on item varied by either Consumer Price Index or Change in Actual Costs

(b) Retainer Formula

Item 1 + Item 2 + Item 3 + Item 4 + Item 5 + Item 6 + Item 7 + Item 8 + Item 9 + Item 10 + Item 11 + Item 12 + Item 13 + Item 14 + Item 15 = Total Retainer Cost

Total Retainer Cost / 12 = Component A of Schedule 1 (Retainer Per Month)

2. Description of Items Composing Retainer

2.1 Item 1-Annual Wage

Description - this is the annual base wage paid to the driver. The grade used varies by configuration with the appropriate level selected from the award based on vehicle specification. These rates are reviewed annually.

(a) Source: Transport Industry State Award

Six Wheeler - Transport Worker Grade 4
Eight Wheeler - Transport Worker Grade 5

(b) Formula

Award Rate Per Week x 52 weeks = Item I

(c) Six Wheeler Example:

52 X $565.82 = $29,422.64

2.2 Item 2 - Slump Allowance

Description - the allowance paid to concrete drivers as described in the award. This calculation is the same across all vehicle configurations and is reviewed annually

(a) Source: Transport Industry State Award

Weeks paid 48 (52 weeks minus 2 weeks annual leave and 2 weeks for casual)

(b) Formula

Award Slump Allowance Per Week X 48 weeks = Item 2

(c) Six Wheeler Example:

$17.85 X 48 weeks = $856.80

2.3 Item 3 - Workers Compensation

Description - allowance for workers compensation based on government requirements. The total will vary based on vehicle configuration and is reviewed annually

(a) Source: - Government Regulated Allowance for concrete slurry manufacturing

Calculated on total labour cost (sum of annual wage, overtime, slump allowance).

(b) Formula

(Item l + Item 16 + Item 2) x Workers Compensation Allowance = Item 3

(c) Six Wheeler Example:

($29,422.64 + $856.80 + $15,188) x 6.555% = $2,980.38

2.4 Item 4 - Annual Leave Loading

Description - based on award allowance for annual leave loading. Drivers have been allocated 4 weeks annual leave. This value will vary based on vehicle configuration and is reviewed annually.

(a) Source: Transport Industry State Award

(b) Formula

Award Weekly Wage X Award Leave Loading = Weekly Leave Allowance

4 x Weekly Leave Allowance = Item 4

(c) Six Wheeler Example

$565.85 (weekly wage) x 25% (award allowance) = $141.46

4 (weeks) x $141.46 = $565.84

2.5 Item 5 - Long Service Leave

Description - allowance for allocation of monies for long service leave. This value will vary by vehicle configuration and is reviewed annually.

(a) Source:

Long Service Leave Act as amended

(b) Formula

13 (weeks)/15 (years) = Long Service Leave %

Award weekly wage X Long Service Leave % = Item 5

(c) Six Wheeler Example:

13 weeks/15 years = 86.6%

$565.82 (weekly wage) X 86.6% = $490.38

2.6 Item 6 - Superannuation

Description - payment of superannuation based on statutory requirements. This value will vary by vehicle configuration (due to difference in labour rates) and is reviewed annually.

(a) Source: Superannuation Guarantee Administration Act employer funded % superannuation contribution percentage

Labour Costs is the annual wage component only from Award

(b) Formula

Item 1 x superannuation % = Item 6

(c) Six Wheeler Example

$29,422.64 (annual wage) x 9% (super %) = $2,648.04

2.7 Item 7 - Casual Labour

Description - allowance for casual labour when driver is on two weeks approved annual leave and their vehicle is required to work. For the remaining two weeks annual leave it has been determined that the vehicle will not be required. This calculation will vary by vehicle configuration and is subject to annual review.

(a) Source:

The two weeks leave and hours worked component are fixed.

Transport Industry State Award with rates by vehicle grade

Casual rate for normal hours is Award rate +15% plus 1/12 leave loading

Casual Rate for overtime is Award rate +15%

Superannuation & Workers Compensation calculations use the same methods

described previously taking into account rates applicable for casual labour

(b) Calculation:

(i) A x B = C

(ii) {C +(C x 1/12)} = D

(iii) E x D = J

(iv) (C x 1.5) x F = K

(v) (C x 2) x G = L

(vi) J+K+L+H=M

(vii) J x N = O

(viii) M x P = Q

(ix) (M + O + Q) x I = Item 7

A = Rate Per Hour (Award Grade) B = Casual Labour Loading (15%)

C = Standard Casual Rate Per Hour D = Rate With Leave Loading

E = Standard Hours Per Week (38) F = Hours at Time & half per week (9.6)

G = Hours At Double Time (4) H = Slump Allowance Per Week

I= # of weeks for casual J = Casual Weekly Wage Total

K = Time and Half Weekly Total L = Double Time Weekly Total

M = Total Per Week N = Superannuation Rate (= B item 6)

O = Per week Super Total P = Workers Comp % Q = Per week workers comp

(c) Six Wheeler Example

Casual Labour Costs

Casual Labour Costs	Rates		Weekly Rates Calculation			Rate
	$					$	$
Rate	14.89		Normal	38		18.55	704.92
loading	15%		Hours
standard	17.12		1.5 hours	9.6		25.69	246.58
Leave Loading p/h	1.43		2 hours	4		34.25	136.99
annual leave loading	18.55			51.6			1,088.48
	Totals	Per Week			Weeks	2	2,176.97
Workers comp	143	71.35			Slump	2	35.70
superannuation	127	63.44					2,212.67
Total	2,482.25	1,241.13

2.8 Item 8 - Full Comprehensive Insurance

Description - cost of insuring vehicle based on the value of the vehicle. Value will vary based on vehicle configuration and is subject to annual review.

(a) Source: Quote sourced from agreed supplier. Vehicle value used for the quotation will be based upon the latest Glass's guide valuation at average price level for the initial vehicle specified

(b) Six Wheeler Example

If three years into the contract the Transport Manager will source a quote for a three year old six wheeler Iveco at the average Glass's guide value.

2.9 Item 9 - Public Liability Insurance

Description - costs of public liability insurance to cover value specified in the contract determination under clause 7.3 of Part B. Value will not vary based on vehicle configuration and is subject to annual review.

(a) Source - Quote sourced from agreed supplier

(b) Example

$330 quoted rate

2.10 Item 10 - Sick and Accident Insurance

Description - based on $700 per week with 7 day excess. Value will not vary based on vehicle configuration and is subject to annual review.

(a) Source - Quote sourced from agreed supplier

(b) Example

$693

2.11 Item 11 - Vehicle Funding

Description - Vehicle funding is based upon a seven year fixed interest rate loan. With costs determined by taking into account the payment of the principle, interest charged and resale value of the vehicle to provide a value for the cash cost of funding. Value will vary based on vehicle configuration and is not subject to review until the end of the first term.

(a) Source:

Compound interest calculation based on fixed rate of 7.95% over 7 years (NAB), purchase price of vehicle based on Operator price for configuration from Boral's current supplier, agreed vehicle disposal value determined at the end of the seven year term. Value varies by vehicle configuration.

(b) Formula

A - B = C

C/D = Item 11
 

A = Cost of vehicle and Interest	B = Disposal Value of Vehicle
C = Cash cost )	D = Years (7 years

(c) Six Wheeler Example

CASH COST OF HOLDING VEHICLE

IVECO 6X4 ULTRA LIGHTWEIGHT AUTO

Purchase	$138,450	Interest (based on 7.95%)
Year 1		$10,451
Year 2		$9,171
Year 3		$7,785
Year 4		$6,302
Year 5		$4,663
Year 6		$2,906
Year 7		$1,004
Total Payment		$180,732
Cost of Cash	$180,732
Disposal Value at	$55,380
End of 7
Cash cost total	$125,352
Years	7
Per Annum	$17,907.48	Fixed value for term of contract

(d) Eight Wheeler Example

Purchase	$165,650	Interest (based on 7.95%)
Year 1		$12,500
Year 2		$10,961
Year 3		$9,294
Year 4		$7,510
Year 5		$5,539
Year 6		$3,425
Year 7		$1,137
Total Payment		$180,732
Cost of Loan	$216,015
Disposal Value at	$66,260
End of
Cash cost total	$149,755
Years	7
Per Annum	$21,393.55

2.12 Item 12 - Registration Costs

Description - registration of vehicle. Will vary based on vehicle type and is subject to annual review.

(a) Source: Roads and Traffic Authority

(b) Six Wheeler Example

$1,065.82

2.13 Item 13 - Green Slip

Description - compulsory third party insurance can vary by vehicle type and is subject to annual review.

(a) Source: Qualified insurer sourced by Transport Manager.

(b) Six Wheeler Example

$1,698.18

2.14 Item 14 - Stamp Duty

Description - tax applied for purchase of new vehicle as specified at start of contract. Will vary based on vehicle type and is not subject to review until the end seventh year.

(a) Source: Based upon government charge and initial purchase price

(b) Six Wheeler Example

$138450.00 x 3.0% = $4,153.50

$4,153.50 / 7 = $593.36

2.15 Item 15 - Other Costs

Description - other fixed costs associated with operating business do not vary based on vehicle type. Costs are reviewed annually with filing fees and drivers licence costs based upon variations in the actual costs. Remaining items will be indexed each year on the 1st of February by the percentage variation in the ABS Sydney All Groups Consumer Price Index for the preceding 12 month period (January - December).

(a) Source Components

(i) Drivers Licence - RTA fee

(ii) Filing Fee = government statutory charge

(iii) Accounting Fee, Street Directory, Postage, Telephone, Medical, Bank Charges, Minor Truck Damage, Entity Formation - based on prices at the start of contract.

(b) Formula

(i) Drivers Licence = RTA fee

(ii) Filing Fee = sourced from government statutory charge

(iii) Accounting Fees + Street Directory + Postage + Telephone + Medical + Bank Charges + Minor Truck Damage + Entity Formation = Other Costs

(iv) Other Costs x CPI % increase = CPI review other casts

(v) Drivers Licence + Filing Fee + CPI review other casts = Item IS Total

Example

Annual Drivers Licence price = $39.00

Filing Fees= $200

Accounting Fees	$2,500.00
Street Directory	$39.00
Entity Formation	$150.00
Postage	$22.00
Telephone	$107.60
Medical	$160.00
Bank charges	$120.00
Minor Damage	$300.00
Other Costs Total	$3,398.60

CPI increase = 2%

$3,398.60 x 1.02 = $ 3466.57

$3466.57 + $39 + $200 = $3705.57

3. Rate Component B = Load Fee

The load fee is the sum of the per load rates for overtime and return on asset. Will vary based on vehicle configuration and is reviewed annually.
 

Item	Description	Rate Review Method
16	Overtime	Change in Award Rate
17	Return on Asset	Sydney All Groups CPI

4. Load Fee Formula

Overtime Total Cost/Loads Per Annum = Overtime Per Load Rate

Average Return On Asset/Loads Per Annum = Return On Asset Per Load Rate

Overtime Per Load Rate + Return On Asset Per Load Rate = Component B Schedule 1 (Load Fee)

(a) Six Wheeler Example

(i) $15,187.80/ 1300 = $11.68

(ii) $12,165/ 1300 = $9.36

(iii) $11.68 + $9.36 = $21.04

5. Description of Items for Load Fee

5.1 Item 16 - Overtime

Description - calculation of overtime paid during standard hours Monday - Saturday. The total costs for item 16 is converted into a per load charge. Will vary based on vehicle type and is subject to annual review.

(a) Source: - Rate Per Hour - Transport Industry State Award

Overtime - fixed agreed hours (based on 10 hours per week @ time and half Monday to Friday, 2 hours time and half Saturday and 5 hours double time double time Saturday, 230 standard working days and 45 Saturdays, Hours are then discounted by 20% to account for rostering).
 

Hours	Time & Half Hours	Double Time Hours
Six Wheeler	440	180
Eight Wheeler	440	180

(b) Review Formula

(i) A x 1.5 = B

(ii) A x 2 = C

(iii) B x D = E

(iv) C x F = G

(v) E + G = H

(c) Six Wheeler Example

Time

H/I = Overtime Per Load Rate

A = Award Rate Per Hour

B = Time and Half Rate

C = Double Time Rate

D = Overtime @ Time & Half (440 hours) E = Total $ @ Time and Half
F= Overtime @ Double Time (180 hours)

G = Total $ @ Double Time

H = Overtime Total Cost

I = Loads Per annum

(a) Six Wheeler Example

Time & Half Rate 14.89 x 1.5 = $22.335

Double Time Rate $14.89 x 2.0= $29.78

440 hours x $22.3 35 = $9,827.40

180 hours x $29.78 = $5,360.40

$9,827.40 (Time & Half Cost) + $5,360.40 (Double Time Cost) =
$15,187.80 (overtime total cost)

$15,187.80 (overtime total cost) / 1300 (loads per annum) =$11.68
(Overtime Per Load Rate)

5.2 Item 17 - Returns on Asset

Initial Rate Development - calculated based upon an agreed return on the depreciated value of the vehicle. The return on assets total is developed based upon a premium above the standard term deposit rate. The agreed total return at the start of the contract will be indexed each year on the 1st of February by the percentage variation in the ABS Sydney All Groups Consumer Price Index for the preceding 12 month period (January - December).

(a) Initial Calculation:

Return Premium - fixed at 7.5% above the term deposit rate. Based upon initial return value of 13% and current term deposit rate of 5.5%.

Term Deposit - NAB $100,000 invested for 12 months, rate at start of contract 5.5%
sourced from website (premium = 13% - 5.5% = 7.5%)

Vehicle value - sourced from Glass's guide commercial vehicles valuation based on Iveco average vehicle price.

(i) Return On Asset Total (Start of Contract)

Six Wheeler $12,165 per annum
Eight Wheeler $14,321 per annum

(b) Rate Review

The rate review is based upon the Return on Assets Total indexed each year on the 1st February by the percentage variation in the ABS Sydney All Groups Consumer Price Index for the 12 months (January - December ) preceding the rate review period.

Return On Assets Total = Current Return On Assets Total x CPI % Change = Return On Assets
Total (new)
Return On Assets "Total (new)/Loads Per Annum = Return on asset per load.

Example

CPI Increase = 2%

Six Wheeler = $12,165 X 1.02 = $12,408.30

$12,408.30/1300= $9.54

5.3 Rate Component C = Kilometre Rate

The kilometre rate is the sum of the per kilometre unit rates for the fuel, tyres and R&M items. Will vary based on vehicle type, fuel and tyres will be reviewed every six months and annually, R&M annually.

Item #	Description	Rate Review Method
18	Fuel	Change in Actual Cost
19	Tyres	Change in Actual Cost
20	Repair and Maintenance of Vehicle	CPI Impact ABS (6401.0 Table 6)

(a) Kilometre Rate Formula

(i) Fuel Total Cost/Loaded Kilometres Total = Fuel Unit Rate

(ii) Tyres Total Cost/Loaded Kilometres Total = Tyres Unit Rate

(iii) Repair & Maintenance total cost/Loaded Kilometres Total = R & M Unit Rate

(iv) Fuel Unit Rate + Tyres Unit Rate + R & M Unit Rate = Kilometre Rate

(b) Six Wheeler Example

(i) $9,676.25 / 11050 = $0.875

(ii) $2,102 / 11050 = $0.190

(iii) $9,234 / 11050 = $0.835

(iv) $0.875 + $0.190 + $0.835 = $1.90 (component C of schedule 1)

5.4 Description of Items for Kilometre Rate

Item 18 - Fuel

Description - cost of fuel per kilometre. Components should be determined based on the average for the Operator fleet for a particular configuration (average load size, kilometres per litre, distance). Rates will vary based on vehicle type and are subject to six month and annual review.

(a) Source: Fuel Price Per Litre - based on diesel fuel rebate prices as charged to the
Operator fleet by Boral

Fuel Usage KM Per Litre - 6 six wheeler 1.45 (fixed), Eight wheeler 1.35 (fixed)

(b) Formula:

(i) Fuel Costs Total

(A) A/B=C

(B) C x D = Fuel Total Cost

(ii) Fuel Unit Rate

Fuel Cost Total/Loaded Kilometres Total = Fuel Unit Rate

A = Total Kilometres Travelled

B = Fuel usage kilometres per litre

C = Litres of Fuel Used

D = Diesel Fuel Rebate Fuel Price Per Litre

(c) Six Wheeler Example

	$
KM Per Litre	1.45
Price Per Litre	0.6349
Paid Distance	8.5
Total Distance	17
Average load	5
# loads	1,300
total km	22,100
Litres normal	15,241
TOTAL	9,676.75

Kilometre Rate = $9,676.75 (fuel cost) / 11,050 (loaded KM) = $0.875 per km

5.5 Item 19 - Tyres

Description - rate will vary by vehicle configuration and kilometres travelled per annum are subject to six monthly and annual review.

(a) Source:

(i) Prices: sourced by Transport manager based on tyre type being used by company fleet. Prices used are the average of two quotes.

(ii) Life: New tyre 30,000km (new tyres used for steer), retread 25,000 km (retread used for drive tyres) tyre life is a fixed component.

(iii) Discount: based on 1st year new tyres on new truck 85% (fixed)

(iv) Extra KM: 2.5% addition on total KM travelled (fixed).

(v) Punctures: 8 per annum (fixed)

(b) Formula:

(i) New Tyre Costs

Total Kilometres Travelled x 1.025 = Weighted KM

Weighted KM/Tyre Life = # New Tyres Used

# Tyres Used Per Annum x # Steer Tyres = Total New Tyres Used

Total New Tyres Used x Unit Cost = Total Cost New Tyres

(ii) Retread Tyre Costs

Total Kilometres Travelled x 1.025 = Weighted KM

Weighted KM/Tyre Life = # Retread Tyres Used Per Annum

# Retread Tyres Used Per Annum x # Drive Tyres = Total Retread Tyres Used

Total Retread Tyres Used x Unit Cost = Total Cost Retread Tyres

(iii) Total Cost New & Retread Tyres

New Tyre Total Cost + Retread Tyre Total Cost = All Tyre Total Costs

All Tyres Cost x Discount (85%) = New & Retread Tyre Total Cost

(iv) Cases

Total New Tyres Used + Retread Tyres Used = Total Tyre Use

Total Tyre Use /3 (agreed retread life) = # Cases Required Per Annum

# Cases Required Per Annum x Unit Rate = Cases Total Cost

(v) Disposals

# Cases Required Per Annum = Disposals Required Per Annum

Disposals Required Per Annum x Unit Rate = Disposals Total Costs

(vi) Punctures

8 per annum x Unit Rate = Punctures Total Cost

(vii) Tyres Total Cost

Total Cost New & Retread Tyres + Cases Total Cost + Disposals Total Cost + Punctures

Total Cost = Tyres Total Cost

(viii) Tyres Unit Rate

Tyres Total Cost/Loaded Kilometre Total = Tyres Unit Rate

(c) Six Wheeler Example

TYRE COSTS
	KM use	KM Travel	Tyre Use	Tyres on truck	Total Usage	Unit Rate	Cost
		+%?				$	$
Steer Tyres	30,000	22,653	0.76	2	1.51	537	810
Recaps	25,000	22,653	0.91	8	7.25	153	1,106
sub total							1,916
Weighted for New Truck						85%	1,629
Cases					2.92	65	190
3 disposal					2.92	15	44
8 punctures					8.00	30	240
Total							474
weighing						TOTAL	2,102

Tyre Unit Rate = $2,102 (tyre cost) / 11,050 (loaded KM) = $0.19 Tyres Unit Rate

5.6 Item 20 - Repair and Maintenance

Description - the repair and maintenance costs associated with operating a particular vehicle configuration. These costs are reviewed annually indexed each year on the 1st of February by the percentage variation in All Groups CPI for Motor Vehicle Repair & Servicing for the 12 months (January - December) preceding the rate review.

(a) Source:

Based on initial rates supplied by Boral's vehicle supplier based on 1800 hours R&M
agreement.

CPI for Motor Vehicle Repair & Servicing for the 12 months prior to the anniversary date

Service Agreement Rate (Start of Contract)

Six Wheeler $9,234 per annum
Eight Wheeler $10,224 per annum

6 Wheeler Ave Prod	Dealer Agreement	8 Wheeler Ave Prod	Dealer Agreement
< 1080 loads	1600 hours	< 1080 loads	1600 hours
1080 - 14 10 loads	1800 hours	1080 - 1410 loads	1800 hour
> 1410 loads	2000 hours	> 1410 loads	2000 hours

Note: the service agreement at the start of the contract is based upon 1800 hours, if the average number of loads carted falls outside the productivity range specified for 1800 hours in the above table, a new maintenance contract rate will be sourced from Boral's current vehicle supplier.

(i) Review Example Six Wheeler

CPI increase = 2%

$9,234 x 1.02 (CPI) = $9418.68

$9418.68 / 11,050 (loaded km) = $0.85 per km

(b) Surcharge Review and Calculations

Description - rates will be adjusted based on the review of previous items included in the calculation of surcharges eg fuel, tyres and R&M. The calculations take into account that fixed costs have been recovered and there is some allowance for lost opportunity or minimum cost payments where applicable. Surcharges will be reviewed at the following periods.
 

Items	Adjusted	Method
Mixing In Yard	6 Monthly	Change in Actual Cost
Waiting Time	6 Monthly	Change In Actual Cost
Transfer Fee	6 Monthly	Change In Actual Cost
Standby Time	Annual Review	Change In Actual Cost
Out of Hours Surcharge	Annual Review	Change In Actual Cost
Own Mixer Rate	Annual Review	Change In CPI
Agitating Fee	6 monthly	Change in Actual Cost
Car Travelling	Annual Review	Change In CPI
Call Out Fee	Annual Review	Change In Actual Cost

(c) Description of Key Calculations

Variable Per Hour - takes into account fuel and R&M for the appropriate surcharges. The figure is weighted to provide an indication of what these costs would be per hours for a standard load.

(d) Six Wheeler Example

$0.876 (Fuel Rate Per KM) + $0.836 (R&M Rate Per KM) = $1.71 x 8.5km (ave lead) = $14.54

$14.54 x 0.75 (loads per hours) = $10.91

Per Load Pay - accounts for the per load payment weighted on an hourly basis.

Six Wheeler Example

$21.04 (per load rate) x 0.75 (loads per hour) = $15.78

Waiting Time Weighting - is a weighting used to compensate the vehicle for time lost before waiting time is charged.

Labour Rates - for out of hours work double time rates are used based on the appropriate award grade.

Agitating Fee - is based upon the waiting time rates before weighting is applied

SURCHARGE CALCULATION SHEET SIX WHEELER

1. Mixing In Yard Per Load	6w	6w		%	Mixing Cost per Load
	$		$		$
Variables Per Hour	5.46	Variables Per Hour	10.91	50%	5.46
Per Load pay	15.78	Load Pay P/H	15.78	100%	15.78
Total	21.24	Total			21.24
2.Waiting Time	6w	6w	$	%	Cost per hour
	$
Variables Per Hour	10.91	Variables Per Hour	10.91	100%	10.91
Per Load pay	15.78	Per Load Pay	15.78	100%	15.78
Total	26.69	Total			26.69
Per Minute standard	0.44
Weighting	2.30
Per Minute Rate	1.02
3.Transfer Fee	6w
	$
Per KM Cost
Load	1.90
Total	0.95
4. Standby Time	6w	6w	$	%	$
	$
Per Load Pay	29.78	Labour	29.78	100 %	29.78
Total	29.78
Per Half Hour	14.89	Total	29.78		29.78
5. Monday - Saturday	6w	6w			$
	$
Out of Hours		Rate			14.89
Rate Per Load	29.78	X2			29.78
		hours			4
		total			119.12
		Per hour Rate = Per Load Rate
6. Agitating Fee	$
Per Minute	1.02
7. Labour Hire	$
Rate Per Hour	14.89
Note = Award rate
8. Sunday & Public	6w	6w			$
	$
Out of Hours		Rate			14.89
Rate Per Load	37.23	X2.5			37.23
		Per hour Rate = Per Load Rate
9.Call Out Fee	$
Rate	119.12
Note = Award rate

(e) Owner Mixer Rate

Description: initial rate based upon Boral costs for operating their mixers includes depreciation and R&M

Review: indexed each year an the 1st of February by the percentage variation in the ABS Sydney All Groups Consumer Price Index for the preceding 12 month period (January - December).

(f) 6 Wheeler Example:

CPI Change = 2%

$10.00 x 1.02 = $10.20