Taipower opens tender for 1.26 million tons of coal

COAL SUPPLY BID INVITATION LETTER
Date: June 24, 2004
Subject: Coal Supply Bid Invitation
INVITATION TO BID NO. TPC9305

Taiwan Power Company ("Taipower") is inviting bids for the supply of coal from countries and districts abroad on the following terms and conditions:

The minimum acceptable quality specifications (based on ISO standards) shall be as follows:
- Gross Calorific Value (kcal/kg, as received) 5,500 min.*(1)
- Total Moisture (%, as received) 15 max.*(2)
- Ash Content (%, air dried) 15 max.
- Total Sulfur Content (%, air dried) 1.1 max.
- Volatile Matter (%, air dried) 28 min.
- Fixed Carbon (%, air dried) 60 max.
- Grindability (Hardgrove Index Value) 45 or 42 min.(3)
- Ash Fusion Temperature (?C, under reducing condition, H=W) 1,150 min.
- Size 50 x 0 mm
- Size above 50 mm (%) 5 max.
- Fines under 2 mm (%) 30 max.
- Na2O in Ash (%) 2.0 max.*(4)

*(1) Gross Calorific Value greater than 6,900 Kcal/Kg will be treated as 6,900 Kcal/Kg.
*(2) Total Moisture can be raised to 22% max., if Ash Content is less than 10%.
*(3) Please refer to section 3.2 of the Instruction for Bidding.
*(4) If both actual (a) CaO+MgO>Fe2O3, and actual (b) CaO+MgO+Fe2O3>20% are met, then Na2O in Ash can be raised to 5.0% max.

The quantity of coal to be purchased is 1,260,000 Metric Tons, which shall be shipped by twenty (20) Panamax Size vessels. Each Panamax Size vessel shall load 63,000 Metric Tons of coal plus or minus ten percent (10%) at shipmaster's option and subject to 12.5 meters draft limitation in Taichung Port. In addition, if the quantity of Coal shown in the Bill of Lading (B/L) is greater than 69,300 Metric Tons, it will be treated as 69,300 Metric Tons. However, if requested by Taipower that the quantity of Coal shown in the Bill of Lading (B/L) is greater than 69,300 Metric Tons, then the price to be paid by Taipower will base on the B/L quantity.

All bids and bid bonds must be received by the Taipower?s Department of Fuels by 4:30 PM, July 08, 2004 (Taipei time) (the "Bid Due Date"). Late bids or bid bonds will be unacceptable and will be returned unopened.

TECHNICAL AND COMMERCIAL PROPOSALS will be publicly opened by Taipower at the offices of Taipower at 09:30 AM, July 09, 2004 (Taipei time), unless a change to such expected time is posted in public. In addition, said opening day will be postponed to the next day if said opening date is not a working day. Bids must be firm and must remain available for acceptance by Taipower until September 08, 2004 (Taipei time).

If you have any questions concerning this Bid Invitation Letter, CONTRACT AGREEMENT form or the bidding documents, please address your questions in writing to Fuel Department, Taiwan Power Company, 9th Floor, 242 Roosevelt Road, Section 3, Taipei 100, Taiwan, R.O.C. (Telex: 27254 TPCFUEL; Telefax: 886-2-23670597/886-2-23678593) no later than June 29, 2004. Taipower will provide a written reply no later than July 05, 2004, and may publish such reply if necessary.

Stanley C. M. Tsai
Section Chief of Foreign Coal Section for
the Director of Fuel Department
Taiwan Power Company

Editor's Note: Bidding documents can be obtained at Taipower?s web-site address: http://203.69.131.3/material/009TPC9305.doc