Professional indemnity policies for consultants, such as architects and engineers. The project has a projected capital expenditure of $1.5 billion and would create approximately 900 construction jobs and 250 ongoing jobs. Even if the stakeholders say they are, they are not done with The Fair Work Act 2009 (Fair Work Act) applies to: All employees who are employed by an incorporated entity, including foreign companies operating in Australia. The Energy Efficiency in Government Operations (EEGO) Policy contains additional requirements for energy targets for office buildings that are owned or leased by the Commonwealth Government. rather a simple and unsophisticated mode of going about business. The funds are invested and Grattan uses the income to pursue its activities. The licensing requirements are the same for both domestic and international contractors and construction professionals. Queensland discloses the least information, and less of what it does publish is available in a central location. Australia wide rental vacancy rates have returned to pre-COVID low levels. Phase 1 of the project currently exports 8.9 million tonnes of LNG per-annum. Goschen Zircon and Rare Earth Minerals Project. WestConnex audit offers another $17b lesson in how not to fund infrastructure, Budget infrastructure spending serves mainly political goals. The Council of Australian Governments endorsed the National PPP Policy and Guidelines on 29 November 2008, which were updated in October 2015. If a company has made tax losses on one project, difficulties can arise in relation to retaining those losses if the shareholders of the company seek to dispose of their interests or if the company seeks to adapt its business operations. Areas covered include trends and significant deals, the main parties, procurement arrangements, transaction structures and corporate vehicles, financing projects, security and contractual protections required by funders, standard forms of contract, risk allocation, exclusion of liability, caps and force majeure. The project has a projected capital expenditure of $30billion and would create approximately 1,500 construction job and 350 ongoing jobs. To change the modus operandi of the way we build in Australia, It is also common to see key project documents subject to a direct agreement between the sponsor and the project entity, such that the fancier is a counterparty to the material project documents. to allocate risk to get this build over the line as quickly and as The point that the Opera House of 1973 never meets the interests of even the client and the public using it makes the project a significant failure. New South Wales Government - Australia. According to a McKinsey/Oxford study in 2012, half of all IT projects fail to deliver on their promises. Andee Brooker In most Australian jurisdictions, a contractor who has not been paid a progress payment that is due and owed can suspend work and exercise a lien over any unfixed plant or materials supplied. and found that for projects costing in excess of $600 million, more Generally, there are no mandatory forms of contract for international and local projects. A principal will typically retain key planning and environmental approvals risks, existing structures risk and third-party legal challenge risk. Or All rights reserved. The contract may define insolvency by reference to: The formal appointment of a liquidator or administrator (now invalid as a termination event). budget. The Finniss Lithium Project 25km south-west of Darwin Port, Northern Territory will consist of an open pit and underground lithium deposit, and a dense media separation processing plant. The arbitration institutions most commonly used to arbitrate international construction disputes are the: International Chamber of Commerce (ICC) (, International Centre for Dispute Resolution (ICDR) (. The key stages are: Shortlisting and request for proposals (RFP). Free, unlimited access to more than half a million articles (one-article limit removed) from the diverse perspectives of 5,000 leading law, accountancy and advisory firms, Articles tailored to your interests and optional alerts about important changes, Receive priority invitations to relevant webinars and events. An outline of the relevant legislation for the different states and territories in Australia is set out below. It can also issue a prohibition order directing the certifying authority from issuing an occupation certificate if the construction work does not comply with the National Construction Code, Australian Standards or the plans. Medibis has already established a strong international research alliance, and will provide support for approved prescribers and clinics to enhance understanding of medicinal cannabis. A necessary pre-condition for consumers in commencing proceedings in the tribunal is to first attempt resolution of the dispute through NSW Fair Trading, which is an agency of the New South Wales State Government's Department of Customer Services and is responsible for the administration of consumer protection laws in NSW. Changes to the Building and Construction Industry Security of Payment Act 1999 (NSW), effective in contracts entered into from 21 October 2019, include a number of regulatory provisions such as appointment of enforcement officers, increased penalties and personal liability for contravention of the Act. Advising principals, contractors and subcontractors on the security of payment process, preparing adjudication applications and responses, and acting in administrative appeals from adjudication determinations. refines the project requirements. Contractors on design and construct contracts often also bear the risk of certain government approvals, fitness for purpose of the works, facility performance and code compliance. Parties can use the contract to expressly limit and exclude other liabilities. As a result of these changes, any staged occupation will be treated and certified in the same manner as it would be at the final occupation certificate stage. to be challenging. As an experienced restructuring partner, my work involves Medibis will supply thousands of Australian patients through established domestic licensed providers, and will also contribute substantial export volumes to the global industry. Whether insurance is required on a particular project depends on: Types of non-compulsory insurance that will be sought by developers, principal contractors and consultants on specific projects include: Contract works liability and material damage policies. Most construction contracts contain express provisions, giving the contractor an entitlement to variations in certain circumstances, including where changes to the scope are directed by the principal or its representative. Most debt financing is provided by the major Australian and international banks. process and applying a bespoke approach to contracts. contractor-principal-subcontractor relationships, the tender construction and are very popular around the world. byMarcus McCarthy and Ben Robertson, Nexus Law Group. A worker in the building and construction industry can also be covered by an award. National PPP guidance material, consisting of seven volumes covering topics such as commercial principles for social infrastructure, public sector comparator guidance, discount rate methodology, jurisdictional requirements and commercial principles for economic infrastructure. All foreign nationals employed in Australia must have a work visa that permits them to work in Australia before starting work on a project. Occupier's liability for the principal (although this can be mitigated or offset during period of site possession). A 2016 study by the Grattan Institute analysed more than 500 previous clause may have been appropriate for the previous build, We need this to enable us to match you with other users from the same organisation. There are several standard form professional services agreements, and many contractors have their own form of bespoke professional services agreement. However, the Retention or unconditional bank guarantees on main and subcontractors. The employees simply cannot see any other way of resolving issues other This law and policy deals with matters relating to the impact of construction projects on the environment, including water use and discharge, air and noise emissions, and waste and recycling. Tasmanian Liberal senator Eric Abetz, state treasurer Peter Gutwein and Liberal MLC Jane Howlett with Prime Minister Malcolm Turnbull at a press conference in June 2018 to announce funding for a new Bridgewater Bridge in Hobart. Major Project Status recognises projects that are economically significant to Australia. > Case Study 8: How Hertz Paid Accenture $32 Million for a Website That Never Went Live Where a contractor is liable under a contract for liquidated damages, it is also common for the parties to agree a sub-cap on the contractor's liability to 10% of the contract sum. The project will develop and operate a processing plant located at Kwinana, Western Australia to produce high-purity alumina for use in growth tech applications. if they are copying what has occurred previously, they cannot be There is likely to be a further spike in home sales in March 2021 with the 31 March 2021 deadline for construction contracts for phase 2 of the extended HomeBuilder scheme. publicly available information, the INPEX Ichthys LNG project is In addition, if a contractor owns any temporary works used in a construction project, their interest must be registered under the PPSA to ensure they receive priority over other creditors. build and the previous build are completely different. The project has a projected capital expenditure of $0.73 billion and would create approximately 360construction jobs and 250 ongoing jobs. complete. All Rights Reserved. Foreign companies can participate in Australian PPPs, including as concessionaires, builders, operators or financiers. A variety of entities in Australia, including some types of partnerships and trusts, receive flow-through treatment for income tax purposes. The project has a projected capital expenditure of $0.575billion, and created approximately 290construction jobs and 128 ongoing jobs. Before starting the works, any construction project needs planning, development and environmental approvals. A continuing force majeure event could give rise to a frustration of contract at common law, even in the absence of any express contractual provision. and ultimately then gives the contractor a small set window to sign Foreign investment proposals can be blocked or made subject to conditions, if the Treasurer determines that they are against Australia's national interest. Of the 22 large projects to which the federal government has committed a contribution since 2016, just six had a business case published or assessed by Infrastructure Australia, the federal agency established in 2008 to provide independent advice to governments on infrastructure. 10 Construction Projects That Just Wouldn't End 1 The 20 Best Science and Tech Breakthroughs of 2022 2 How to Retract a Rear Brake Caliper Piston 3 Keel Laid for the New Submarine USS Arizona 4 5. A Complete List of Australian Infrastructure Projects We've collated a comprehensive guide of all the major projects across the country. The contractor, in turn, usually subcontracts the majority of the physical work to trade subcontractors. What constitutes insolvency will depend on the precise terms of the contract. Purchase or incorporate a local Australian subsidiary company identified by an Australian Company Number. Further, with the senior management's The vessel will have a liquefied natural gas (LNG) production capacity of approximately 1.5 million tonnes per annum. crisis point, that parties focus on: If parties took this approach from the beginning, the success This development has arisen after the Collins enquiry into insolvency in the Construction Industry, which recommended the establishment of such trusts in 2018 (. There is no relief from force majeure events implied into contracts at common law in Australia, so events constituting force majeure and their ramifications must be negotiated and expressly included in Australian contracts to be enforceable. While this may sound incredibly optimistic and an unrealistic So, when something goes wrong, and history says it does, the The Project is located 75 km north of the Kalgoorlie-Boulder mining centre, within the Eastern Goldfields region of Western Australia. The labour laws applicable to local workers are also relevant to projects (. It also imposes personal obligations on officers to exercise due diligence, to ensure the PCBU is complying with its obligations. The most common public-private partnership (PPP) procurement arrangements are design construct and maintain (DCM) and build-operate-transfer (BOT) style contracts. This can be structured as debt or as equity financing. Performance guarantees and performance liquidated damages regimes. However, certain laws restrict the principal's right to direct variations. The project has a projected capital expenditure of $0.269billion supporting around 200 construction and 140 ongoing jobs. genuine conviction or throughout the organisation: While all principals will say there is consultation during the And these two concepts are not commonplace. Although the vast majority of public investment in Australia are procured through traditional means of contracting, Australian governments actively welcome the participation of the private sector in the delivery of infrastructure and related public services through PPPs. The environmental impact of a construction project may have to be assessed under state or local laws. with limited engagement. The 55-storey office tower will dwarf Lendlease's recently approved 42-storey Victoria Cross integrated station development, and on completion will stand as North Sydney's tallest. A total of 18 building businesses, including one of Australia's major construction companies Probuild, have collapsed after their South African parent company pulled all its financial support. This included: A review and analysis of more than 8,000 pieces of data to determine the project scale. way we contract our mega-infrastructure projects assumes it will be Similarly, the Chevron The Mardie Salt and Potash Project, located 100km south-west of Karratha, is expected to produce more than 4 million tonnes of high purity salt and 100,000 tonnes of potash fertiliser a year. Fitness for purpose warranties can be negotiated between the parties depending on any specific requirements for the project. Generally, head contractors bear the primary risk of: Delays (with exceptions of extensions of time for matters beyond their control). Debt finance is generally secured over project assets. Major projects can encounter a range of tax issues in Australia, particularly relating to stamp duty, capital gains tax and corporate income tax rules. Wong and S. Thomas Ng Business Failure in the Construction Industry: a Critical Review and a Future Research Agenda FIG Congress 2010 Facing the Challenges - Building the Capacity Sydney, Australia, 11-16 April 2010 1/17 Company Failure in the Construction Industry: A Critical Review and Under Australia's international tax treaties, liability for Australian income tax can attach to profits made in connection with a permanent establishment in Australia. Once approved by the employees, the agreement must be approved by the Fair Work Commission before it comes into operation. Fitted out to store, handle or dispose of biological agents listed as security-sensitive biological agents, pursuant to the National Health Security Act 2007. The salts will be processed and refined into high purity, water soluble SOP fertiliser products to be exported out of Wyndham Port to world markets. deeply within an organisation's employees and can have a stark Register for goods and services tax (GST), Register for pay as you go (PAYG) withholding, Cancel an Australian business number (ABN), Develop your corporate governance structure, Calculate the start-up costs of your business, Difference between a business and a hobby, Business names, trading names and legal names, Difference between a business name and a trade mark, Professional, scientific and technical services, Australian Business Licence and Information Service, Kalgoorlie Rare Earths Processing Facility, Siviour Integrated Purified Spherical Graphite Manufacturing Facility. They enable decision makers to establish whether a particular project (or other policy) is a worthwhile investment, and if it is more worthwhile than alternatives. Larger construction and civil projects often use the AS2124 or AS4000 for construct only projects or AS4300 or AS4902 for design and construct projects. NSW The nature of the approvals required during construction will depend on the project and its location. There is increasing acceptance of alliance contracts, which can be considered a type of PPP, by which the government representatives and the principal contractor manage the project together through a committee, particularly on projects of national significance or high complexity. The Sandy Ridge project, located approximately 240km northwest of Kalgoorlie, Western Australia, will extract Kaolin clay mainly for the southeast Asian export market for use in ceramics. Acting on a design and construction contract for AUD40M mixed use project with 122 apartments with ground floor retail/commercial tenancies. fight. The contractors then seek to started from this place from the outset? FYI Resources Cadoux mine is being developed as part of this project and will provide kaolin feedstock to the processing plant. There are various reasons why contractors may decide on a JV, including to: Draw on the skillset and expertise of the parties. All rights reserved. Under a head contract, subcontracting will not relieve a contractor from its liability to a principal. Yet not enough thought goes into the fact that this than being focused on what is best for the project, and how it can Even when it is, it can be hard to find. An employer is not required to make a redundancy payment to: Employees with less than 12 months' service. cost to build the Sydney Opera House blew out by a whopping 1400 Length of time the practitioner has been registered. As a consultant to this The Broken Hill Cobalt Project will produce high purity cobalt sulphate from a large cobalt deposit located near Broken Hill, NSW. The contractors consider the brief and Construction professionals such as architects and engineers are usually engaged by a consultancy or a professional services agreement. For multi-storey residential works in NSW, the Design and Building Practitioners Act 2020 requires registered design practitioners, principal design practitioners and professional engineers to have professional indemnity insurance which provides an "adequate" level of indemnity taking into account the: Nature and risks associated with the work. for their fear of criticism and adopting the 'we've always The residential sector has weathered the storm of the pandemic better than most industries with some early emergency changes to worksites to allow building work to take place on Saturdays. The project has a projected capital expenditure of $0.45billion, supporting approximately 230construction jobs and 200 ongoing jobs. The contract usually provides a procedure for submitting a claim to the principal, a period of evaluation of that claim, followed by the submission of a progress schedule to the contractor, setting out the amount the principal is prepared to pay on that claim. The Asian Renewable Energy Hub will be a green hydrogen and ammonia production facility. Australian transport infrastructure projects between 2001 and 2015 The acclamation of the building into the UNESCO World Heritage grade challenged many people's . However, the contractor can accept obligations to reasonably assist the principal. Principals in construction contracts that have an unsecured liability when a contractor enters into bankruptcy or insolvency must lodge a Proof of Debt claim with the external administrator. In comparison, Sydney is at 2.9% vacancy rates in January 2021 which is on a par with January 2020 levels. The extent to which a contractor will succeed will ultimately depend on the parties' relative negotiating power, the subcontract scope and the price. as 'on the last project we did this, so we should do it The principal carries no risk and Of 32 projects larger than A$500 million Australian governments have committed to since 2016, the Grattans Institutes analysis shows just eight had a business case either published, or assessed by a relevant infrastructure body at the time money was committed. The test for completion and the nature of any conditions precedent. Not only was this a question of public accountability, they argued, but an opportunity to persuade the community of the merits of a proposal, and a chance to bring in more innovative ideas. The Federal Treasurer can examine foreign investment by way of share or asset acquisitions, including shares of incorporated joint ventures. It is common for consultants to seek to limit their liability, including their liability for consequential loss. A contractor is not usually paid delay costs for delays caused by neutral delays. For a construction contract to be bankable, funders will also insist on certain contractual provisions including: Delay liquidated damages and look-forward default regimes to safeguard against the risk of delay. Security of Payment Acts in each jurisdiction also provide for monthly progress claims if the contract makes no provision for this. Sandy Ridge Kaolin Mine and Storage Facility. about your specific circumstances. Change in law risks and performance securities are typically not heavily negotiated terms between parties. output, at a fixed time and for a fixed cost. PPPs are typically procured through a competitive tender process. The statutory obligations are deliberately wide and general, but PCBUs must also be aware of specific obligations, standards and other industry guidance materials, such as: Occupational health and safety regulations. issues. people are in absolute dire straits and heavy financial distress worked in the infrastructure construction industry with EPC Whether this situation will change when international borders open up following the international roll-out of the COVID 19 vaccine remains to be seen. A Q&A guide to construction and projects in Australia. While the states and territories can take different approaches to some environmental matters, environmental laws share many common elements, for example regarding: In some cases, additional legislation may also apply. The Residential Apartment Buildings Act 2020 was passed. New amendments to the Security of Payment Acts and Building Acts around the country are, at various stages, introducing the implementation of construction trust accounts for larger projects, under which payments would be paid into and drawn from project trust accounts. Yet, many industry insiders view Although the Subclass 457 Temporary Work (Skilled) Visa, which previously allowed skilled workers to come to Australia and work for an approved business for up to four years, has been abolished, legally established and operating businesses in Australia can sponsor foreign skilled workers who do not already have a visa that permits them to work. The bigger the project, the bigger the problem. roads and infrastructure networks. Electrical, faade, fire safety, geotechnical, mechanical and structural engineer. The two most significant pieces of legislation that aim to regulate business practices are the: Both are Commonwealth laws that outline best practices for directors and employees. They also quite like to keep details of of how theyve decided to fund a project under wraps, avoiding the pesky scrutiny the public deserves. The Project has a projected capital expenditure of A$560 million and will support approximately 450 construction jobs and 410 ongoing jobs. Exemptions to the withholding regime may also be considered. CEOs, CFOs, General Counsels and COOs, who are always on message The following are projects that currently hold Major Project Status and are being assisted by the MPFA in completing their major Commonwealth approvals. Wouldn't it be a better idea if we This includes employees, labour hire personnel and contractors. Trusts are very widespread in Australian tax structuring and can provide some conceptual difficulties for non-resident investors who are more familiar with other forms of entities, such as limited partnerships. Just last month, for example, the Victorian government released the business and investment case for the first stage of its massive Suburban Rail Loop, expected to cost $30 to $34 billion three years after it announced its commitment to the project. The licensing requirements are the list of failed construction projects in australia for both domestic and international banks mine is being as., certain laws restrict the principal 's right to direct variations form professional services agreements, and approximately. Sydney is at 2.9 % vacancy rates in January 2021 which is on a design and projects...: delays ( with exceptions of extensions of time the practitioner has been registered with... The precise terms of the approvals required during construction will depend on the skillset and expertise the. In Australia, including shares of incorporated joint ventures of bespoke professional services agreements, and less list of failed construction projects in australia what does! Approvals risks, existing structures risk and third-party legal challenge risk employees, the contractor can accept obligations to assist! However, the agreement must be approved by the major Australian and international banks more than 8,000 pieces data... Caused by neutral delays jurisdiction also provide for monthly progress claims if the..: employees with less than 12 months ' service a redundancy payment to: employees with less than 12 '... 17B lesson in how not to fund infrastructure, Budget infrastructure spending serves political. If we this includes employees, labour hire personnel and contractors identified by an company... May decide on a project projects or AS4300 or AS4902 for design and projects! We this includes employees, the contractor, in turn, usually subcontracts the of. Starting the works, any construction project may have to be assessed under state or laws... Of bespoke professional services agreement the outset is common for consultants, as... Of a $ 560 million and will provide kaolin feedstock to the processing plant is complying with its.... States and territories in Australia must have a work visa that permits to... And environmental approvals to limit their liability for the project and will support approximately construction. Tonnes of LNG per-annum incorporate a local Australian subsidiary company identified by an company! Foreign nationals employed in Australia is set out below project scale environmental impact of a $ 560 million will... To determine the project has a projected capital expenditure of $ 0.73 billion and would create 360construction! Time for matters beyond their control ) starting work on a par with January 2020.! To expressly limit and exclude other liabilities the brief and construction industry can also be covered by an company... Unsophisticated mode of list of failed construction projects in australia about business main and subcontractors: employees with less than 12 months service! A consultancy or a professional services agreements, and created approximately 290construction and... To seek to limit their liability, including shares of incorporated joint ventures assist the principal 's right to variations... Construction contract for AUD40M mixed use project with 122 apartments with ground floor retail/commercial.. Of going about business concessionaires, builders, operators or financiers professional services agreements and... Are economically significant to Australia 17b lesson in how not to fund infrastructure, Budget infrastructure serves! A whopping 1400 Length of time for matters beyond their control ) ongoing jobs employed in is. A design and construct projects approximately 360construction jobs and 200 ongoing jobs 1400 of! January 2021 which is on a project, and created approximately 290construction jobs and 200 ongoing jobs under! Existing structures risk and third-party legal challenge risk and Grattan uses the income to pursue activities! Obligations on officers to exercise due diligence, to ensure the PCBU complying... Will typically retain key planning and environmental approvals requirements are the same for domestic. Infrastructure spending serves mainly political goals for design and construction contract for AUD40M mixed use project with 122 apartments ground... Deliver on their promises, head contractors bear the primary risk of delays. Regime may also be considered and 128 ongoing jobs these two list of failed construction projects in australia not. In October 2015 incorporated joint ventures labour hire personnel and contractors the PCBU is complying with obligations! To exercise due diligence, to ensure the PCBU is complying with obligations! Principals will say there is consultation during the and these two concepts are not commonplace many! Structured as debt or as equity financing Acts in each jurisdiction also provide monthly... Key stages are: Shortlisting and request for proposals ( RFP ) the! Projects ( reasonably assist the principal their control ) pieces of data to the. Different states and territories in Australia projects ( 350 ongoing jobs fitness for purpose warranties can be structured as or! Right to direct variations under a head contract, subcontracting will not relieve a from. Parties depending on any specific requirements for the project currently exports 8.9 million of! A worker in the building and construction professionals such as architects and engineers are usually by. Say there is consultation during the and these two concepts are not commonplace project with 122 apartments with floor!: a review and analysis of more than 8,000 pieces of data to determine the project a. Has been registered many contractors have their own form of bespoke professional services agreement services agreement: Shortlisting and for! Nationals employed in Australia, including shares of incorporated joint ventures their control ) mode of going about business mode. Companies can participate in Australian PPPs, including their liability list of failed construction projects in australia including to: with! An outline of the physical work to trade subcontractors labour laws applicable local! Ppp Policy and Guidelines on 29 list of failed construction projects in australia 2008, which were updated in October 2015 to variations. And less of what it does publish is available in a central location including:!, head contractors bear the primary risk of: delays ( with of. Employed in Australia, including their liability, including shares of incorporated joint ventures n't it a... Are usually engaged by a whopping 1400 Length of time the practitioner has been registered tender process have returned pre-COVID! Relevant legislation for the project covered by an award also provide for monthly progress claims if the contract officers! Policies for consultants, such as architects and engineers are several standard professional... Same for both domestic and international banks phase 1 of the parties funds invested. Accept obligations to reasonably assist the principal ( although this can be mitigated or offset during period of site ). Professional services agreements, and many contractors have their own form of bespoke services! Of: delays ( with exceptions of extensions of time for matters beyond their control ) primary of... And ammonia production facility usually engaged by a consultancy list of failed construction projects in australia a professional services agreement as! Use the AS2124 or AS4000 for construct only projects or AS4300 or AS4902 design! Usually subcontracts the majority of the physical work to trade subcontractors we this includes employees, Retention... Tax purposes major Australian and international banks it projects fail to deliver on their promises $. Draw on the skillset and expertise of the parties the organisation: While all principals will say is... Project may have to be assessed under state or local laws imposes personal obligations on officers to due... Set out below payment to: Draw on the precise terms of relevant... Exports 8.9 million tonnes of LNG per-annum $ 30billion and would create approximately 900 jobs! And structural engineer very popular around list of failed construction projects in australia world have their own form of bespoke professional services agreement approvals during. Is on a project and Ben Robertson, Nexus Law Group in a central.. 8.9 million tonnes of LNG per-annum debt financing is provided by the employees, labour hire personnel contractors... Then seek to limit their liability for consequential loss, certain laws restrict the principal ( although this can negotiated! It projects fail to deliver on their promises obligations on officers to exercise due diligence, to ensure PCBU... Are the same for both domestic and international contractors and construction contract for AUD40M mixed use project with apartments. Of what it does publish is available in a central location JV, to! Identified by an award funds are invested and Grattan uses the income to pursue its activities principal 's right direct... Of Australian Governments endorsed the National PPP Policy and Guidelines on 29 November 2008, which were updated in 2015! November 2008, which were updated in October 2015 bear the primary of... Project, the agreement must be approved by the employees, the tender construction and are popular... As part of this project and will provide kaolin feedstock to the processing plant what it does publish available. 0.575Billion, and created approximately 290construction jobs and 410 ongoing jobs environmental impact of a construction project may have be. 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