FETC may know K&M Engineering and Consulting Corporation (K&M) as a dedicated and successful support contractor providing excellent quality services through the execution of more than 40 projects under two different contracts with FETC since 1991. Internationally, K&M is recognized as an Owner's Engineer leader in engineering, and construction, particularly in the power, telecommunications, and environmental sectors and in infrastructure project finance, private development, and procurement.

The scope of K&M's experience spans every phase of international infrastructure project implementation:

• project identification,
• private financial structuring,
• provision of legal and financial advisory services,
• conceptual and detailed engineering,
• project management,
• owner's engineering services,
• Engineering-Procurement-Construction (EPC) services,
• procurement support,
• construction supervision, and
• operations and maintenance oversight.

K&M has a staff of over 300 engineers and construction managers, privatization experts, technical consultants, economists, legal and financial specialists, procurement personnel and other professionals, as well as the administrative staff needed to support its headquarters in Washington, DC and field offices overseas.

Formed to bridge the gap between engineering technology and innovative project financing techniques, K&M has been a worldwide pioneer in the development of privately funded, owned and operated infrastructure projects. Since 1987 K&M has procured, structured, designed, developed and/or has managed the construction of power projects producing over 8,000 MW, two-thirds of which are independent power projects (IPPs) implemented through Build-Own-Operate (BOO) or Build-Operate-Transfer (BOT) financing strategies.

• Technical Due Diligence
• Project Definition and Financial Structuring
• Linkage Between Developer, Contractors, Regulatory Agencies, Financial Intermediaries and Guarantor Agencies
• Site Evaluation
• Preparing and Negotiating the EPC Contract and PPA
• Tendering / Competitive Bidding
• Conceptual and Detail Engineering and Design Review
• Turnkey/EPC Contractor Oversight
• Project Management
• Construction Management / EPC
• Performance Testing / Certificates of Completion
• O&M Oversight

The following table graphically demonstrates K&M's extensive experience and pertinent skills providing EPC in each of the areas required for the successful implementation of projects.

As the table above indicates, K&M's various roles during project implementation includes every area of responsibility for an A&E and / or EPC Contractor. The table also demonstrates the broad scope of engineering, design, procurement, construction and project commissioning services provided and K&M's expertise in the comprehensive aspects of project engineering and construction management. K&M has the experience and expertise necessary to not only resolve the short term technical issues necessary to reach financial close and completion of construction activities, but also the long term issues that affect commercial viability over the life of the project.

The following table summarizes K&M's key personnel experience in providing A/E and EPC services. A brief description of these key personnel is included in the Personnel Resources Section.

Termocandelaria 314 MW Combustion Turbine Power Plant: The consortium of K&M and Siemens Westinghouse have overall technical responsibility as the turnkey Engineering-Procurement-Construction (EPC) contractor in support of this 314 MW gas-fired simple cycle plant. K&M's scope of work covers the complete range of services as the EPC contractor for this $90 million project.

The TermoCandelaria Project consists of two Westinghouse 501F ECONOPAC combustion turbine generators. The Project will be a 334 MW nameplate (314 MW net) natural gas-fired electric generation facility located near Cartagena, Colombia. The TermoCandelaria Project facility is expected to commence commercial operation at 157 MW (net) by July 2000 and at 314 MW (net) by November 2000. The TermoCandelaria Project facility is expected to be one of the lowest cost thermal electric generation facilities in Colombia.

The Owner has entered into a fixed-price date-certain, turnkey engineering, procurement and construction contract (the "TermoCandelaria EPC Contract") with a consortium consisting of Siemens Westinghouse Power Generation ("SWPC") and K&M. The TermoCandelaria EPC contract provides for a completion guarantee and liquidated damages for performance shortfalls and schedule delays. The obligations of Westinghouse and K&M under the TermoCandelaria EPC contract are joint and several.

Termovalle Power Project, Colombia: K&M has overall responsibility, as Owner's Engineer to the KMR Power Corporation, for developing, managing, and coordinating all technical work in support of the 250 MW combined cycle, partial merchant, power plant. Westinghouse Electric Corporation will provide the Frame 501-F(C) gas turbine, the steam turbine and the heat recovery steam generator. Termovalle will be designed for both natural gas and fuel oil operation. Fuel for the project will be provided by Empresa Colombiana de Petróleos (Ecopetrol), Colombia's national oil company, under a 20-year gas supply and transportation contract. K&M's scope of work includes:

• Development of project scope and comprehensive design requirements and technical specifications, including the quality standards and reliability of equipment as well as fuel supply and treatment provisions of the plant for inclusion in the EPC contract;
• Technical and commercial evaluation of the EPC contractor's proposal including the contractor's scope of work, credibility of the contractor's work schedule and corresponding pricing, appropriateness of the contracts and guarantees, and potential areas of cost overruns. Provided technical and commercial support in the preparation of EPC contract. Evaluated in-depth were the provisions for guaranteed completion, liquidated damages incentives to mitigate areas of potential risk associated to the developer. Strong emphasis was placed on cutting EPC contractor costs and reasonableness of the project construction schedule and feasibility of achieving project milestones. During negotiations, K&M succeed in cutting over 8% of EPC cost from the original price;
• Evaluated the power system interaction and grid compatibility for transmission line load flows of the proposed plant and development of plant dispatch arrangements, and minimum plant performance requirements;
• Assisted KMR in obtaining necessary permits and licenses from Colombian authorities;
• Prepared the Environmental License submittal to ensure that the project design and proposed operation in relation to all of the project agreements is in compliance with Colombian standards and the World Bank Guidelines;
• Shop inspection and test witness evaluations where vendor establishments are inspected to assure compliance with contract documents and sufficient Quality Assurance (QA)/Quality Control (QC) programs with regard to design, materials, equipment and workmanship (future);
• Oversight of EPC contractor design work and adherence to construction schedule;
• Extensive cost/schedule monitoring, including the development of resolutions to assist timely performance and regular reporting on progress and accomplishments of the EPC contractors to the client;
• Oversight of plant construction;
• Inspection, review and monitor testing and startup and operation of the facility.

Ilijan 1,200 MW Combined Cycle Power Plant: Korea Electric Power Corporation (KEPCO) hired K&M as Owner's Engineer to provide technical assistance and negotiation support for the Ilijan Power Project. K&M assisted KEPCO in the review and negotiation of the Energy Conversion Agreement (ECA) with the National Power Corporation (NPC) of the Philippines. This included negotiation of the Fuel Supply Agreement and fuel supply obligation of the Government of the Philippines (GOP) under the ECA. K&M's scope also included an analysis of the environmental compliance (according to World Bank guidelines) of the largest natural gas power project in the Philippines, contractual obligations of the GOP over the life of the project, and the legal, regulatory and policy issues affecting the agreements. K&M also supported development of the EPC contract, in the price negotiations, and conducted various additional engineering and technical consulting duties throughout the duration of the project. The Ilijan Project includes the design, financing, engineering, procurement, construction, testing, start-up, commissioning and maintenance of a 1,200 MW natural gas-fired combined cycle merchant power plant, an associated 58 kilometer transmission line, interconnection facilities, and a 12 kilometer gas supply pipeline. K&M's support included:

• Documentation Review: Multi-disciplined technical, commercial and financial review of documentation and recommendations for questions and negotiation issues, between ECA and EPC agreements.
• EPC Review: Review of major plant components to serve as a baseline for cost analysis.
• ECA Review: Overall review of ECA's technical terms and conditions, performed in conjunction with a review of other key project agreements to verify consistency and completeness.
• EPC Negotiations: Development of negotiation issues and agenda for initial meeting. Commencement of cost estimate review.

K&M also:

• Defined the environmental criteria for the project;
• Compared Philippine DOTT and DENR administrative order requirements to international standards;
• Reviewed contract requirements for generator (client) environmental responsibilities;
• Performed sample calculations to define and model expected plant emissions;
• Developed plant guarantee test and performance requirements;
• Reviewed methodology for calculation of capital recovery fees and energy fees;
• Reviewed methodology for calculating cost of gas turbine startups and payment for extended use of distillate fuel and production of excess energy;
• Reviewed grid studies in the Philippines;
• Reviewed natural gas pipeline and transmission line studies;
• Reviewed fuel specifications;
• Calculated liquidated damages; and,
• Developed plant operating parameters.

Mamonal Power Project: Inter-American Energy Leasing was awarded the concession to finance build, own, operate, and transfer (BOOT) a $70 million, 100 MW gas turbine combined cycle power plant in Cartagena, Colombia. The plant consists of two General Electric LM5000 steam injected gas turbine (STIG 120) generators each with a heat recovery steam generator.

K&M provided project and construction management services for the turnkey/EPI (Engineering-Procurement-Implementation) contract, including:

• Development, drafting, negotiation and finalizing of project agreements and contract documents including EPC contract and leasing agreements.
• Conceptualizing, development, of technical specifications and plant layout.
• Detail engineering on switch gears, protective relays and raw water supply system.
• Coordination and integration with the local utility’s protection systems, and load flows.
• Construction management including design review of vendor and EPC drawings, quality assurance and control of the EPC contractor, and start-up and commissioning of the plant.
• Provide management oversight of the operations and maintenance (O&M) contractor, Stewart & Stevenson Operations, Inc.
• Provide technical support in assuring proper plant performance during commercial operation of the plant which is currently functioning at a 94% reliability rating.
• Shop inspection and test witness
• Cost/schedule monitoring and control.
• Overall project quality control.

K&M achieved financial closure for the transaction in a record 7 months (the first non-recourse financing of a leased project in Latin-America) and had the plant up and in commercial operation within 4 months after the start of construction.

Al-Manah Power Project: This $214 million facility consists of 3x30 MW General Electric, Frame 6 gas turbines with all support facilities comprising 182 kms of 132 kV and 66 kV transmission lines, and 5 electrical substations. After conducting a private power market analysis and feasibility studies for the project, K&M acted as principal consultant to the Omani Ministry of Energy and Water (MEW) from inception of the project in all technical, legal, regulatory, and financial aspects, and also served as the on-site construction manager, including:

• Engineering Design Review;
• Project Progress monitoring, including cost and schedule compliance;
• Assurance of contractor compliance with the technical, regulatory, tariff, and legal agreements;
• Construction Quality monitoring;
• Resolution of Claims;
• Review of contractor progress reports; and
• Periodic status reports on the project to the MEW.

Rousch and Raiwind Power Projects: These two projects demonstrate K&M's power project technical expertise in evaluating the engineering design of private power plants on behalf of the project lenders. In serving as the Banker's Engineer on these projects, K&M's scope of work directly complements the services of Owner's Engineer and Construction Management. In Phase I of each of these projects, K&M provided a due diligence technical and engineering review of the proposed plant and technology on behalf of the financial lenders prior to financial close. In Phase II, the firm will continue as the Banker's Engineer throughout the life of the concession to safeguard the bank/lender's interest. The scope of work for the pre-financial-close technical appraisal entailed a review of the project conceptual engineering design, including:

• Review of the functioning and reliability of the on-site facilities (an important concern with the Rousch plant as it is a combined cycle facility using residual fuel oil with the intent to convert to gas in the future);
• Fuel supply and treatment provisions;
• Electrical energy interconnection and standby water supply provisions; and
• Review of the project contracts and agreements for flaws and inconsistencies, specifically the Power Purchase Agreement, the EPC contract, the Fuel Supply Agreement and the Operations and Maintenance Agreement.

The scope of work for the post-financial close phase of these projects will entail on-going construction supervision; quality approval review and certification of the project engineering and equipment; and assurance of proper maintenance and upkeep of equipment during the life of the concession.

These projects are representative of K&M’s energy sector experience worldwide. As shown on the following world map, K&M provides owner’s engineer/construction management, BOT consulting, procurement, engineering and design, privatization and institutional reform, project structuring and development support, and due diligence services in the power, telecommunications and environmental sectors in addition to the services described in this document. Additional project information can be found following the Personnel Resources section.

K&M has a staff of over 300 engineers and construction managers, privatization experts, technical consultants, economics, legal and financial specialists, procurement specialists, and other professionals as well as the administrative staff needed to support K&M projects in the USA and overseas.

Brief biographical summaries of K&M's key personnel with expertise in providing A/E and EPC services follows the world map.