Operating risks
Although the plant was to use proven technology, and would be operated and maintained
by companies with significant experience and high reputations, any major power plant is
subject to many risks, including the breakdown or failure of equipment or processes, and
plant performance below expected levels of output and efficiency. These problems may be
caused by wear and tear, misuse, labour disputes, weather, catastrophic events or sabotage.
Although the project company was to maintain insurance and reserves to protect against
these risks, there could be no assurance that these measures would cover all possible
financial losses.
Fuel supply risks
In order to protect against possible fuel supply problems the project company designed the
POWER PLANT
Exhibit 11.5 continued– Base case projections
Year ending
31 December 2000 2001 2002 2003 2004 2005 2008 2007 2008
Operating expenses
(US$ thousand)(24)
Fuel 60,185 64,021 68,018 69,752 72,918 74,780 76,708 78,689 80,727
Auxiliary fuel 713 736 758 782 806 831 857 883 911
Lime 330 356 384 396 408 421 434 447 461
Ash disposal 380 406 434 447 461 475 490 505 521
Deposits to major
maintenance reserve (25) 0 0 0 0 0 0 0 0 0
Wages and benefits 3,763 3,888 4,017 4,141 4,270 4,403 4,539 4,679 4,824
Operator fees 2,202 2,270 2,340 2,413 2,488 2,565 2,644 2,726 2,811
Parts 2,675 2,837 3,005 3,099 3,194 3,294 3,396 3,502 3,610
Plant supplies 1,120 1,180 1,243 1,281 1,321 1,361 1,404 1,448 1,493
Subcontracting 1,359 1,440 1,524 1,573 1,621 1,671 1,722 1,777 1,831
Plant equipment rental 86 92 99 101 105 108 112 115 119
Additional O&M 2,083 1,074 0 0 0 0 0 0 0
Water treatment 1,596 1,707 1,824 1,881 1,938 1,999 2,061 2,125 2,190
Administrative and general (26) 4,738 4,314 4,453 4,591 4,731 4,879 5,030 5,186 5,348
Fuel unloading (27) 1,285 1,325 1,366 1,409 1,452 1,498 1,544 1,592 1,641
Renewals amd replacements 572 590 608 627 647 667 687 709 730
Insurance and taxes (28) 7,339 7,503 7,601 7,961 8,736 8,536 8,681 9,291 9,178
Transmission line maintenance 166 171 176 181 187 193 199 205 211
Other (29) 948 978 1,009 1,040 1,072 1,105 1,139 1,174 1,210
Letter-of-credit fees 285 288 290 293 296 299 302 305 308
Contingency 169 174 179 185 191 197 203 209 216
Franchise taxes (22) 4,448 4,688 4,944 5,023 5,134 5,218 5,307 5,397 5,490
Total operating expenses 96,442 100,038 104,272 107,176 111,976 114,500 117,458 120,964 123,830
Net operating revenues
130,422 139,097 148,028 149,277 150,128 151,789 153,368 154,643 156,708