of the power output be distributed locally, the plant has made a contribution to the quality of
life in the local community. At the peak of construction the plant employed 3,000 people. Now,
in routine commercial operation, it employs 175, half of them from the local community.
Independent Engineer’s Report
In June 1997 R.W. Beck, Inc. presented the Independent Engineer’s Report. The principal
conclusions were as follows.
- The construction, operation and maintenance, and management contractors had previ-
ously demonstrated their capacities to discharge their respective responsibilities. - Provided that the construction contractors followed the design criteria set out in the con-
struction contracts concerning site development, subsurface conditions and foundations,
the proposed site should be adequate for the construction and operation of the genera-
tion facility. Also, on the basis of the Independent Engineer’s site assessment, there
were no significant contamination issues that required additional investigation or allo-
cation of funds. - The coal-fired steam electric power plant technology proposed for the generation facili-
ty was a sound, proven method for electricity production. - The proposed methods of design, construction and operation of the project were in accor-
dance with generally accepted engineering and industry practices. - Assuming that the project would be designed, constructed, operated and maintained as
proposed, the power plant should be capable of operating at a long-term average net
capacity of 440 MW, with a net plant heat rate of 10,040 Btu/KWh (including allowance
for degradation), and would have a useful life of at least 25 years. - The project would be capable of achieving annual average equivalent availability factors
of 80 per cent during the first year of operation, 83 per cent in the second year and 86 per
cent in subsequent years. - The performance tests and guarantees in the EPCM contracts were typical of those for
similar projects and should be adequate to estimate future performance of the power plant. - In the absence of events such as delays in the delivery of material and equipment, labour
difficulties, unusually adverse weather, force majeure events or untimely equipment fail-
ure, 36 months was a realistic estimate for construction time. - The company had obtained the necessary environmental approvals and there should be
no technical circumstances that would delay the issuance of remaining construction and
operating permits. - The EPCM contract price of US$442,866,000 and the total project construction cost of
US$563,075.000 were developed in accordance with generally accepted engineering
practices and estimation methods. - Based on the project company’s estimated total use of funds, and Salomon Brothers’ esti-
mates of interest rates, reinvestment rates, and US and Philippine exchange rates, the pro-
posed credit facilities and equity contribution should be sufficient for the project
construction cost and interest during construction. - Operation and maintenance costs had been estimated by the project company and the
operator using a reasonable methodology, and were comparable to those of other coal-
fired plants of similar size.
QUEZON POWER, THE PHILIPPINES