July 22, 2011

The President, El Rio Montana Resources, Inc. Baguio City ATTENTION: Mr. J. Alzona President

Subject:

Proposal for the conduct of Pre-Feasibility Study and Comprehensive Feasibility Study of a Renewable Mini-hydro Power Project.

Sir: AT DINUM a local consultancy firm is please to submit this letter-proposal in accordance to your Terms of Reference(TOR) for the conduct of engineering consultancy services (preparation of pre-feasibility study and Comprehensive feasibility study) of a proposed Mini-hydro power. It is emphasized, that all services covered in the proposal (Comprehensive Feasibility Study) are necessary in order to determine the technical, financial and socio-economic viability of the proposed project and possible construction financing from your organization and other appropriate financing institution. The details are described as follows. 1.0 FIRST PHASE (PRE-FEASIBILITY STUDY) Pre-feasibility study is a preliminary engineering activity to assess the following: 1. General Site Potential - Site actual conditions of water sources and availability - Topographic characteristics - Initial geological assessment - Location and accessibility from load center - Socio and economic environment 2. Preliminary Scheme of Development - Preliminary concept of civil works component - Suitable electro-mechanical equipment and auxiliaries 3. Power market analysis - Identification of possible consumers and power taker 4. Preliminary Project costing and estimate - Civil works structures and electro mechanical equipment 5. Strategy of Implementation and Management This report is necessary in the application for Renewable Energy Service Contract from the Department of Energy (DOE).

including access road and transmission line route.1. equipment and others connected to this contract have been paid in full.1.0 SECOND PHASE (COMPREHENSIVE FEASIBILITY STUDY) Conduct of Comprehensive Feasibility Study is necessary in sourcing out financing requirement needed for the construction from local and foreign financing institution or other similar institutions. the maximum and minimum flow of the river.1 DURATION OF STUDY .1.00 Php).5 Power Market Study .500. 1. a group of engineers headed by an experienced hydrologist will do this task. Following are activities needed in this phase.1. earthquake magnitude and frequency and structural stability needed for structures foundation design.4 Hydraulic Study 2.1 work title Topographic survey Brief description conduct comprehensive engineering survey to establish Ground control of the whole project system. Second progress payment.000. It also determines the project cost. -25 % of the study cost as progress payment at the end of second week from the start of work respectively .2 Geologic Investigation 2. the generation forecast and the Rate of internal return. 2. conduct water level analysis at normal and flood conditions. from government agencies like PAGASA and NIA. conduct power market study on potential power taker. Correlate fresh data with old data.One (1) month 1.1.1. establish gauging areas and assign people to do gauging weekly. 25% of contract cost. materials. -10% retention will be payable for Fifteen (15) days after the final acceptance and upon presentation of satisfactory evidence that all cost of labor. Establish the exact location of the project components like the weir and the power plant.1.3 TERMS OF PAYMENT -40% of the study cost as down payment upon signing of contract. will be made upon submission of the completed pre-feasibility study. Investigate the watershed areas. using non uniform flow computation.3 Hydrologic Investigation 2. conduct site geologic and geotechnical investigation to establish soil and rock characteristics.1. 2.1. Work scope 2.2 COST OF STUDY One Million and Five Hundred Thousand Pesos ( 1.

1.6 Outline Design of plant Facilities with feasibility Level based on the inputs from the above studies and existing details facilities evaluation.2 Preparation of All Documents Necessary for Project Development as Required by the Department of Energy (DOE) and other Assistance to DOE. prepare the scheme of deve lopment of the power system including preliminary and Concept design of the various facilityies such as weir.3 Note: The duration of the works for the allied services starts from the project conception up to the completion of the project (full operational stage) 3. surgetank.1. Assistance to follow-up will be rendered. These are as follows: Water Rights from the National Water Resources Board(NWRB) Assist in securing the water rights permit from the National Water Resources Board(NWRB) 2.8 Financial and economic Viability Study Conduct economic and financial viability studies such as generation.1. 2. desander. production cost analysis.1 2. financial and economic internal rate of return analysis and the like. Headrace. Prepare a clear and concise workplan for a Renewable Mini-hydro Power Project. benefit cost analysis.2 ALLIED SERVICES The allied services shall consist of activities to secure other technical and administrative permitting requirements in accordance with government policies and procedures.2. demand and projected demand of Power within the franchise area where the power From the mini-hydro plant will be sold.7 Cost Estimate Conduct unit pricing analysis and prepare initial cost estimates of the entire mini-hydro development.2.0 DURATION OF SERVICES The duration for the conduct of comprehensive Feasibility Study will be Four (4) months. 2.2. power house Substation and transmission lines including the sourcing Of equipment from various manufacturer and suppliers.1. Meetings and Project Presentations to all sectors affected by the development of the projects. 2. 2.Cost of power.9 Work Program 2. penstock. 2. .

00) exclusive of vat.00 payable 30 days after final acceptance and upon presentation of valid proof that all costs incurred during the study have been fully paid. For the Geologic and Geotechnical survey .Geologist and instrument needed in the conduct of the study shall be provided by the consultant. . Peoples Consultation. 15% in the amount of Php 600.000. LGU and other Private sectors affected by the development of the project: Meetings for Public Hearings and Project Presentations and Peoples Consultation.2 y y TERMS OF Payment 30% of the feasibility study cost in the amount of Php1. For All Activities Related to DOE.00 progress payment at the end of each every month until Four (4) months . 5. c. For the Detailed Topographic Survey .0 FINANCIAL PROPOSAL FOR THE CONDUCT OF COMPREHENSIVE FEASIBILITY STUDY AND ALLIED SERVICES: 5. b. 10% retention in the amount of Php 400. All cost incurred for the whole process of securing NCIP certification shall be borne by the proponent. Work will commence within five (5) days after mobilization payment. the completion and submission of the financially viable and bankable feasibility study.000 as mobilization / downpayment.the survey teams together with the instrument needed in the conduct of optimum survey results shall be provided by the consultant. engineers and necessary instrument for the conduct of the optimum study shall be provided by the consultant. e.The cost for the meetings and gathering of the indigenous people.1 COST OF SERVICES The total cost for the conduct of comprehensive feasibility study and allied services is Four Million Philippine peso(Php 4.0 DETAILED SCOPE OF WORK AND DURATION a.Hydrologist. Project Hydrological Study .4. y Thank you for the opportunity to be of service to you. For the Site Meetings for Public Hearings for Indigenous People .000. The duration of the geo-technical study is estimated to take 30 days. etc. shall be borne by the proponent.000. d. The duration of the study will take Three (3) months to finish. . 5.All cost incurred also for the whole process of securing all the necessary permits and documents for the development of the project shall be borne by the proponent. community residents.2000. . etc. and Documentations etc.000. The estimated duration to complete the survey is 45 days .

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