Montreuil 8 February, 2005 General Industry Corporation POB 4499 Abu Dhabi Attention Mr Essa A Atek Director General

Ref: Invitation to tender 56/1840/92, your letter of 8 June 1992. Our ref: P660/3766V/PE426

Dear Sirs

Following your letter of 4 June 1992, we are pleased to submit 3 copies of our proposal to undertake a feasibility study for an integrated steel complex in Abu Dhabi.

We are also enclosing brochures of our company.

We have assumed that this integrated complex will be based on direct reduction of high grade ores, pellets and steel scrap to produce wire, rods and long products of small or medium sections; and that the capacity is in a range around 0.5 million tonnes/year. The capacity is in fact not very important; it is rather the types of products and the range of the product mix which govern the amount of effort to be considered as far as we,are concerned

With regard to the unconditional bank guarantee of 5% which amounts to 180000 French francs, arrangements have been made with our bankers "Banque de Paris et des Pays Bas (Paribas) in Abu Dhabi, who will do the needful.

We hope that our proposal will meet with your interest; if so, you may be assured that we would devote our best efforts to produce a valuable feasibility report.

We look forward to be informed of the result of your evaluating the offers.

Your's faithfully.

A Gittardi Business Development Vice President

EMIRATE OF ABU DHABI GENERAL INDUSTRY CORPORATION

FEASIBILITY STUDY FOR AN INTEGRATED STEEL PLANT.

STUDY PROPOSAL BY SOFRESID

(Invitation to tender 56/1840/92 of 4 June 1992)

25 JUNE 1992

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CONTENTS

1. PRESENTATION OF SOFRESID

2. RECENT RELEVANT EXPERIENCE OF SOFRESID

3. OBJECTIVES AND SCOPE OF THE STUDY

4. METHOD OF WORK AND PLAN OF EXECUTION OF THE STUDY

5. COMMERCIAL TERMS.

6. BIODATA OF KEY EXPERTS

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PRESENTATION OF SOFRESID

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SOFRESID: A PRIVATE ENGINEERING COMPANY

Established in France in 1958, SOFRESID has developed an international reputation in Industrial Engineering.

SOFRESID is now the leader of a group of companies with a staff of 2700, a turnover of over FrF 1,8 billion, and with references in more than 80 countries throughout the world.

SOFRESID's equity is distributed as follows: - Engineering Company JOHN BROWN 49.0 % - Oil Companies ELF AQUITAINE 10.9 % CFP TOTAL 10.9 % - Steelmaking USINOR SACILOR 10.0 % - Financial Holdings CIE FINANCIERE PARIBAS 6.1 % SOGEDIP 6.0 % FINANCIERE SAULNES 4.7 % - Miscellaneous 2.4 %

SOFRESID with its wide skills and experience provides services to various industries:

- Onshore and offshore Oil and Gas Production

- Pipelines

- Metallurgy and iron and steel

- Mining and Ore Beneficiation

- Refineries and Chemicals

- Energy

- Environment

- General Industry

SOFRESID provides these services as a consulting engineering company, as well as on a lumpsum basis, depending on its clients' requirements.

These services comprise consulting, project management, basic and detailed design, procurement, quality control, construction supervision, commissioning and assistance to operation.

The organization of projects draws resources from the various companies of the Group, depending on the specific technical requirements.

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SOFRESID is divided into three main process divisions:

- General Engineering

- Petroleum, Chemicals, Fertilizers and Pharmaceuticals

- Basic Industries i.e. production in the mining, metallurgy and oil & gas industries.

-plus a production division which provides technical support to the above process divisions.

The purpose of this presentation is to summarize the expertise and capabilities of the Iron and Steel Division of SOFRESID.

SCOPE OF SERVICES OF THE IRON AND STEEL DIVISION

FEASIBILITY STUDIES

- Market studies,

- Manpower and training programs,

- Pre-selection of process equipment,

- Preliminary project outlines,

- Initial estimate of capital outlay and operating costs,

- Financial and economic studies,

- Impact and environmental studies,

- Hazard and risk analysis

PRELIMINARY PROJECT STUDIES - Final selection of processes,

- Conceptual studies,

- Layout and logistic studies,

- General sizing of plant and buildings,

- Scheduling and project execution budgets,

- Financing plans.

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BASIC DESIGN AND DETAILED ENGINEERING: - Basic design and detailed engineering are carried out from the preliminary

project data and for the different disciplines (process, civil, structurals, vessels, mechanical, piping, heat exchangers, electrical, automation and instrumentation, safety),

- Exact sizing of equipment,

- Detailed layout study,

- Equipment specifications,

- Take offs and bills of materials,

- Checking of suppliers' drawings.

PROCUREMENT: - Purchasing (call for bids, bid appraisal,negotiation)

- Placing of orders,

- Expediting of suppliers and subcontractors,

- Quality control,

- Traffic.

CONSTRUCTION, INSTALLATION AND COMMISSIONING: - Site organization and management,

- On-site co-ordination of contractors,

- Fabrication and installation supervision,

- Control of budget and construction schedules,

- Quality control on site,

- Precommissioning, commissioning and start-up supervision,

- Project final documentation and as built drawings.

TECHNICAL ASSISTANCE FOR OPERATIONS AND START-UP - Training,

- Training of operation and maintenance personnel,

- Maintenance,

- Setting-up and organization of a Maintenance department: methods, workshops, spare parts, inventories, computerized tools,

- Management organization and audits,

- Information and management systems for industrial plants: purchasing, procurement, in-plant and external transport, accounting, production management,

- Safety and process audits.

FIELDS OF EXPERTISE OF THE IRON AND STEEL DIVISION

7 The Iron and Steel Division is basically specialized in the design and construction of new plants in iron and steel (both integrated & mini-steel plants), and aluminium. Examples of assignments are the following:

- Construction of an integrated steel complex

- Construction of a mini-plant

- Restructuring and rehabilitation of existing plants

The Iron and Steel Division has steel process specialists who cover the following fields:

- Coke oven batteries,

- Raw materials handling: receipt, storage, homogenizing units,

- Sinter plants, pellet plants

-- Blast furnaces, direct reduction units,

- Oxygen steel plants, electric steel plants, refining and ladle metallurgy, continuous casting machines

- Hot rolling mills, cold rolling mills,

- Tube mills,

- Finishing lines,

- Tinning lines, galvanizing lines, and other coating lines

- Ancillaries and utilities.

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2. RECENT RELEVANT EXPERIENCE OF SOFRESID

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THAINOX, THAILAND:

Our most recent similar assignment was the feasibility and basic design of a cold rolling mill in Thailand for producing 500,000t/year of stainless steel in coils and sheets.

This assignment consisted in selecting the product mix and capacity of production on the basis of market studies. Then basic project parameters were established taking into consideration the availability of main inputs. Main plant and equipment items were selected & process flow-sheets were drawn up. Optimum siting of the plant was studied taking in view sources of supply, energy, water, soil characteristics and pollution constraints. Capital costs of all plant and equipment was estimated as well as cost of main inputs and personnel. Finally financial and economic evaluation was performed.

Our other significant references for this feasibility study are the following

TANG ENG STAINLESS STEEL - KAOHSIUNG, TAIWAN

TANG ENG owned by the Provincial Government of Kaohsiung decided to build the first stainless steel plant of Taïwan for local consumption of flat stainless steel products.In the first stage the plant included:

- a 60 000 tpy cold rolling mill which was entrusted to a Consortium of American companies - 130 000 tpy stainless steel meltshop which was after an international call for bid entrusted

to SOFRESID (Engineering, Procurement and Construction Management) - all the basic engineering was done in SOFRESID premises - all detail engineering for piling civil works, piping and electricity was handled in Taïwan by

SOFRESID which subcontracted locally. - construction management was handled by SOFRESID experts seconded by locally hired

taïwanese.

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SIDOR EXTENSION "PLAN IV" - MATANZAS, VENEZUELA

SIDOR owned by the Venezuelian Government decided to increase drastically the production of its plant located in Matanzas (close to Puerto Ordaz). This multi billion dollar investment included:

- Construction of a large port for seagoing vessels to transport direct reduction sponge and

finished products for export and national consumption. - Construction of a new railroad network for the iron ore mines. - Construction of a pellet plant (one of the largest in the world). - Construction of two direct reduction plants, one Midrex and one HYL. - Construction of 2 steel melt shops: one dedicated to long products with 4 electric arc

furances, 150t each, and one dedicated to flat products with 6 electric arc furnaces, 150t each.

- Both steel melt shops with continuous casting machines, billet and slab respectively. - Extension of hot and cold flat products rolling mills. - One 600 000 tpy bar mill. - One 600 000 tpy rod mill. - A line plant. - A plant to produce liquefied air (oxygen and nitrogen). - All utilities required such as: raw material handling (limestone, iron ore), electrical

substation linked to the nearby dam (Prensa Guri), gas line connexion to the nearby natural gas reservoirs.

- Water treatment and pumping plant from the Orenoque river.

SIDMAR, ZELZATE, BELGIUM FLAT PRODUCTS

Production capacity of flat products: 1,500,000 tpy in the 1st phase, 3,000,000 tpy in the final phase.

SOCIETE NATIONAL DE SIDERURGIE (S.N.S.), EL HADJAR, ALGERIA

Production capacity: 500,000 tpy of flat products in the 1st phase, then 2,000,000 tpy of flat and long products in several stages.

ACESITA, TIMOTEO, BRAZIL

Special steel production: from 270,000 to 600,000 tpy in the 1st phase, to 1,000,000 in the final phase.

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CZECHOSLOVAKIA: RESTRUCTURING OF THE STEEL INDUSTRY:

Technical studies for the restructuring of the Czechoslovakian steel industry, in cooperation with company SEMA-Group now SOFRES-CONSEIL. This study was requested by the Federal Ministry of Economy of Czechoslovakia & was financed by program PHARE of the EEC. Its objectives were to formulate policy & strategy options for restructuring of the steel industry, taking into account all aspects ie the market, the evolution of demand inside & outside Czechoslovakia & of the quality of steel products. On the basis of an audit of the market & of the technical situation of the industry in 1990, the market at horizon year 2000 was estimated, using assumptions on global & sectorial economic growth.

An industrial structure for 2000 was established taking into account steel products demand for 2000. This was done by selecting the most productive rolling mills; the material flow-sheets were then worked upwards to raw steel, pig-iron, electric oven steel & scrap-iron. Based on this, several scenarios for the industrial structure in year 2000 were proposed; these scenarios take into account realistic criteria of change from the present industrial structure.

OTHER RESTRUCTURING STUDIES PRESENTLY UNDERWAY:

We are currently performing restructuring studies of the steel industry in Romania & in Brazil (Compania Siderurgica Nacional Volta Redonda).

MODERNIZATION OF THE FRENCH STEEL INDUSTRY

Since its creation, Sofresid has been involved at all stages with the modernization of the French steel industry.

Of this long involvement, the following significant assignments can be mentioned:

Participation to the construction of Usinor's (now Sollac) integrated steel plant for flat products at Dunkirk in the north of France. We participated in particular to the design, construction & start-up of the hot rolling mills for flat products as well as to the design, construction & start-up of the cold rolling mills at Mardyk Our involvement extends over a period from the early 1960s until today.

At Dunkirk, we also contributed to the construction, & subsequently to the relining, of blast furnaces, in particular BF number 4, one of the biggest in the world.

Sofresid also contributed to several modernization schemes for restructuring of the steel industry in the regions of Metz, Creil & Valenciennes. In Metz region we participated to the design, construction & start-up of the hot rolling mill & cold rolling mills of Florange, one of the largest plants producing cold rolled strip in Europe. In Creil we participated to the modernization of Sollac's cold rolling mills & galvanizing lines. In Valenciennes region which was the most affected by restructuring, we participated to the design & construction of a new tube mill for Vallourec at Saint Saulve.

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3. OBJECTIVES AND SCOPE OF THE STUDY

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3.1 OBJECTIVES OF THE STUDY

The objectives of the study are to establish the technical, financial and economic viability of setting up an integrated steel complex in Abu Dhabi.

In the conditions of Abu Dhabi, an integrated complex will necessarily involve part or the totality of the alternative "solid route to steel" ie direct reduced iron from high grade iron bearing materials, (high grade iron ore, pellets, scrap iron or any combination of the three), steel making by the most appropriate process (electric arc furnace or energy optimizing furnace), continuous casting, hot rolling, & production of construction steel i.e. wire, concrete rod, long products of small or medium sections.

However, if an integrated process is not deemed possible because of technical, economic or any other reason, a semi-integrated process, starting from the end-product, may be considered and then, semi-products produced in another steel plant, more integrated up-stream, would be necessary eg billets.

These important aspects will be addressed in the first part of the study, which is devoted to establishing a market & strategy of development.

3.2 SCOPE OF THE STUDY

The study will address, but not be limited to the following aspects:

A. MARKET SURVEY 1. Detailed and realistic market study of construction steel in the UAE and

neighboring countries. Computation of present and future demands of construction steel in the country and exploring the possibility of exports. The market forecast will be made for a 15 years period i.e. 0-5, 6-10, 11-15.

2. Study of similar projects which are existing, planned in the Emirates and or in the course of construction in the area of influence (neighboring countries) and their repercussions.

3. International competition, marketing systems in UAE and other neighboring countries together with a study of price fluctuations in the recent past, present position and future prospects.

4. Detailed study of suitable sources of raw materials required for the project, their present and future prices.

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B. ENGINEERING STUDY

We will undertake this study to identify and evaluate the technical feasibility of all plant and equipment, as well as all industrial infrastructures and installations, that are necessary for the project.

The overall feasibility study will be based upon an agreed industrial structure and the resulting basic technology options, the market study and the resulting product mix, and on the supply and location of main inputs required.

Our study will address the following aspects:

1. Determination of appropriate site including land and soil conditions port conditions and material handling, township, access roads, power supply, water supply, gas supply, back up industries, manpower and environmental protection.

2. Determination of product mix to be made.

3. Determination of the most appropriate capacity of the complex together with its various plants, equipments, industrial infrastructures and installations.

4. Selection of manufacturing process and assessment of design alternatives. Consideration will also be given to the technical changes likely to occur over the next few years which could affect any choice of plant or equipment.

5. Preparation of principle process flow sheets indicating main input materials and products.

6. Identification of all effluents (solids, gaseous and liquid) and of their treatment to protect the environment. Similarly, identification of necessary plant safety measures to avoid risks & hazards to health and environment.

7. Determination of main input materials and utilities including all raw materials, consumables, fuels, process gases, water, etc...

8. Drawing up an overall basic plant layout indicating location of major plant units.

9. Preparation of plant & equipment lists identifying major items within each process unit and their duty specification.

10. Determination of the necessary infrastructure, materials off-loading and loading terminals, material handling and storage facilities, staff and labour housing, necessary community recreation facilities, power water and sewerage systems etc..

11. Budget estimate prices for supply and erection of main plant & equipment items, civil works and buildings, administrative buildings, housing, necessary infrastructures etc ...

12. Determination of a budget estimate for working capital requirements.

13. Preparation of a design, procurement and construction programme to determine the overall plant commissioning date.

14. Preparation of production plans for each year of operation starting from commissioning and up to date of attaining full production capacities.

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15. Preparation of labour and personnel schedules for various sections of the plant and the project as a whole with their training programme.

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C. FINANCIAL AND ECONOMICAL EVALUATION

The objective of the evaluation is to assess the financial and economic aspects of the project.

The evaluation will be undertaken on the basis of realistic capital structure for the implementation of the project.

1. Estimate the revenue resulting from the sales of the agreed product mix. An average long term sales price for the output of the plant will be established on the basis of known historic statistics, for a standard product representative of the product mix. Levels of variation of the average sale price andof the standard product will be defined and agreed upon.

2. Detailed estimation of total production costs.

3. Estimate earnings forecast for 10 years from commissioning year and determine returns on capital invested.

4. Determination of cash flows starting from construction year and extended up to (10) years from commissioning date.

5. Determination of internal & external rates of return.

6. Determination of pay-back periods, straight and with discounted values of cash flow.

7. Determination of break even points, straight and with discounted values of cash flow.

8. Determination of net present worth value as a function of selected present worth factors.

9. Determination of the economic rate of return of the project, based on reference costed inputs (ie without taxes & tariffs) & value added derived therefrom.

10. Sensitivity analyses of the above evaluation criteria to variations of critical parameters.

11. Suggest ways and means for financing the project.

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4. METHOD OF WORK AND PLAN OF EXECUTION OF THE STUDY

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4.1 GENERAL APPROACH

Our approach as depicted in exhibit 1 will be to address the following four aspects:

- market and strategy of development

- industrial structure and technical details

- capital and operating cost estimations

- financial and economical evaluation.

All previous studies to date on the project of an integrated steel plant in Abu Dhabi or in the region, will be required from GIC at the beginning of the study. These data will be collected and reviewed during a visit to Abu Dhabi of the team of key experts.

These 4 aspects and the basic data required are briefly described hereafter.

4.2 METHOD OF WORK

4.2.1: Basic data collection:

As a number of studies have already been performed on the project of an integrated steel plant in Abu Dhabi and in the region, it will be most useful for us that these studies be made available during a data collection visit that will take place at the beginning of the study. This visit will involve the key experts of our team which is depicted in exhibit 2.

In collecting the data we will address the following aspects: - background of the marketing and strategy considered e.g. types and quality of products and

their mix, choice of production level, volumes and market shares for the different products on the national, regional and international markets, sale prices;

- nature/quality, source/location of main technical inputs required e.g. iron-ore, energy (gas, fuel oil...), fluxes, skilled personnel;

- options considered for main technology e.g. DRI, EAF, rolling mills, etc...

4.2.2: Market and strategy of development

With regard to sales and market data, we will examine for the 5 past years: - matrix of steel consumption in Abu Dhabi, the UAE and region, by products,

sectors/branches, locations;

- imports/exports by products, sources/destinations, tonnages and values; also taxes and tariffs for imports/exports;

- all macro-economic data available on GDP, population, and on the structure and trend for uses of steel products in the UAE and in the region i.e.

. production indices of the different sectors/branches

. specific consumptions of the different sectors/branches

. pattern of distribution of steel products to the market

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Concerning families of products and uses by sectors/branches of the economy, the following basic classification will be used & adapted to circumstances:

- semis

steel for castings all solids for seamless tubes other ingots and semis

- hot rolled heavy sections

railway rails I&U>160mm bars>100mm piling sections

- hot rolled medium sections

bars 32-100mm I&U<160mm light rails hot rolled uncoated sheet/coil under 500mm in width

- hot rolled small sections

bars<32mm wire<13mm wire rods (all concrete reinforcing material)

- thick plates

160-190mm wide, thickness 5-60mm

- hot rolled uncoated strip/sheet 3mm thick & above

- hot rolled uncoated strip/sheet under 3mm thick

- cold rolled uncoated strip/sheet under 3mm thick

- coated plate (galvanized, tinplate)

- electric strip/coil/sheets

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4.2.3: Industrial structure and technical aspects

General description:

On the basis of the conclusions of the market and strategy report, the product mix and the capacity of the complex will be mutually agreed upon with GIC. Then the engineering study will be performed as described hereunder and according to the tentative time schedule as shown in exhibit 3.

Stage 1 - Basic process study: - Determination of basic data for each main process unit of the complex

- Confirmation of processes involved.

Stage 2 - Selection of main equipments, principle process flow sheets, general layout. This stage is

the continuation of the basic process study and will involve process experts and plant and equipment specialists (handling, piping, electricity, automation and control, ...)

Stage 3 - Site selection As soon as the above stage 2 is sufficiently advanced, a back up mission will be organized in

Abu Dhabi in order to select the best site and to study the local possibilities for the erection of the complex.

The general layout will be finalized according to the conclusions of the site selection mission.

Stage 4 - Technical details For each main process unit, we will detail the list and description of the major items of

equipments and infrastructure as well as utilities, effluents and by-products material balances.

Stage 5 - Definition of concrete and metallic structures On the basis of the site selected and of the general study of the complex, our civil & metal

structures engineers will select the best technical & economical solutions to be adopted for the design & engineering of civil works and metal structures.

Stage 6 - Personnel schedule and training As soon as stages 2 to 4 are sufficiently advanced, an expert will elaborate the general

personnel and labour schedule on the basis of our experience of similar complexes in the world.

Then a back-up mission will be organized in Abu Dhabi so as to confront these requirements to the actual local possibilities. This task will be done in close cooperation with GIC. With the conclusions of this mission, a general organization chart will be prepared by the personnel & training expert on his return to France.

Stage 7 - Capital & operating cost estimates Capital & operating cost estimates will be determined from the inputs of the various engineers

and experts involved in the study in the previous stages; they will be based on SOFRESID's international experience of similar complexes and on local prices provided by GIC for civil works, erection, & other items that can be provided from local or regional sources.

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Stage 8 - Computerized project schedule

A computerized project schedule will be established indicating the main phases for the erection of the complex:

- finalization of basic design, cost estimates & budget, implementation schedule, as resulting from the feasibility study;

- detailed engineering by manufacturers & contractors;

- procurement including tendering, bid evaluations, contracting, inspection in manufacturers factories, control of contractors' detailed design work;

- erection on site, including site supervision & controls

- commissioning up to start-up & transfer of the complex plant & equipment to the owner.

Stage 9 - Production plan The preparation of the production plan from commissioning till the full capacity stage will be

prepared on the basis of SOFRESID's experience.

Limits of the study:

This feasibility study does not include the following items: - desalination water plant

- electrical power station and connecting lines with the complex

- access roads or railways tracks out of the limits of the complex

- utilities connecting pipes out of the limits of the complex

Information to be provided by GIC - land and soil testing and investigation & field investigations in the selected site area

- communication of all previous studies on the project

- information on local work market as far as labour is concerned

- local costs for erection, civil works and infrastructure

- local supply conditions and costs of all locally provided inputs including but not limited to, power, water and other utilities.

- taxes & tariffs levied on imported inputs as well as capital items.

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4.2.4: Capital and operating cost estimations

Capital costs

Capital cost estimations will be established on the basis of our experience of similar plants and equipment. Consultations of manufacturers will be made so as to check main specific items.

Operating costs

Operating cost estimates will be established on the basis of specific consumptions of main inputs eg iron bearing materials, fluxes, energy fuels, electricity, water etc... & their unit economical costs ie delivered at the border of the region.

Personnel cost will be established on the basis of hours/tonne of output and with reference to our experience of competitive units operating with similar technology.

The main emphasis will be to establish add-on operating costs of the different individual production units. Add-on costs of individual units will be aggregated so as to obtain total operating cost estimates of the end products.

Other costs and overheads will be estimated on a global basis & percentage. Thus a total cost of production will be estimated. However, it must be realized that the most important factor which governs cost is the choice of process technology and the model of cost simulation is mainly concerned with individual process units i.e. DRI unit, steel melting, continuous casting, rolling mills.

4.2.5: Financial and economical evaluation

Sale prices

This is the most difficult issue which can only be addressed imperfectly. The uncertainties that affect sale prices over a long period (10 years is the required period of economic evaluation) are enormous; they are due to the numerous products and qualities of the product mix and to the economic conditions in the UAE, the region and the international context; moreover, global economic situation as well as competition of imports are also likely to greatly affect the results of any financial and economic projection. Hence, global economic analyses in the case of an integrated steel plant are in fact highly academic. The exercise is however possible with no methodological difficulty, once one realizes these limits.

An average long term sale price will be estimated for a standard product, representative of the product mix, on the basis of known historic statistics, prospective macro-economic forecast and using deflator indices so as to obtain a price series in constant monetary value (US$ equivalents will be used).

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Cash flow projections

Cash flow projections will then be established for 10 years period after start-up and project evaluation criteria will be used to assess its financial and economic viability. Such criteria are the following:

- internal & external rates of return.

- pay-back periods, straight and with discounted values of cash flow.

- break even points, straight and with discounted values of cash flow.

- net present worth value as a function of selected present worth factors.

- economic rate of return based on value added ie sales less inputs.

Sensitivity analyses of the above evaluation criteria to variations of critical parameters will be performed so as to identify & assess major risk factors.

Sensitivity of these criteria to major factors of influence such as sale prices, cost of major inputs, personnel cost, or capital investment level, will be made.

4.3 REPORTS

We will submit the following reports to GIC during the course of the seven (7) months study schedule which is depicted in exhibit 3:

- marketing and strategy report at the end of month 2;

- intermediate engineering report at the end of month 4;

- draft of the final report at the end of month 6;

- final report at the end of month 7.

All reports will be submitted by the project manager assisted by some of the key experts of the project team, to GIC; during discussions, GIC's comments will be received, and due account of these comments will be taken, for writing the final report.

4.4 TIME SCHEDULE

The study will begin at the putting into force of the contract as defined in the commercial terms. A principle schedule of execution is shown in exhibit 3. The time-frame extends over six months plus a seventh month for discussions & final report writing.

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4.5 KEY EXPERTS INVOLVED IN THE STUDY

Our team will comprise of: Alain Zambetti : project manager

Pierre Ratcliffe : deputy project manager

Claude Iégy/Isabelle Sordel : market experts

Jacques Astier : strategy of development expert

Charles Roederer : steel process expert rolling mills

Patrick Dhelft : process expert

Jacques Ruer : process expert

Alain Zambetti : systems engineering expert

Pierre Ratcliffe : finance & economic expert

In addition, the team will be assisted by technical specialists and secretarial services.

The biodata of our key experts are appended hereafter (section 5).

4.6 ESTIMATED WORK PROGRAM

The following is an indicative break-up of our work in Abu Dhabi and Paris in man days. The amount of effort takes account of the following:

The integrated DRI complex is for the production of long products as indicated in 3.1 Objectives of the study and the capacity is in a range around 0.5 million tonnes/year of market products.

- man-days in Abu Dhabi 114

- man-days at home office 486

- total man-days 600

- number of trips to & from Abu Dhabi 18

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5. COMMERCIAL TERMS

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All figures and prices indicated hereafter are expressed in French Francs FrF and are free of all taxes, dues and duties.

5.1 COST

For performing the services as described in the Scope of Work (section 3), SOFRESID will be paid a lump sum of :

FrF 3 600 000 (three million six hundred thousand), free of taxes.

This lump sum includes all SOFRESID's fees as well as expenses incurred both in France and in Abu Dhabi and corresponds to the man-days break-up as indicated in section 3 (Estimated work programme).

The expenses included are the following:

- 114 man days in Abu Dhabi

- 18 travels (go & return air tickets Paris Abu Dhabi)

- use of data bases, computers & software programs for data processing, design & drafting

- communications, (fax, phone, telex, quick courier services)

- technical secretariat, report typing, printing & editing,

Because the market and strategy of development study is a very crucial milestone in this feasibility study, we believe it will benefit GIC & the project to be informed of the cost of this market & strategy study, as a component of the total.

If it had to be undertaken separately, we would propose to carry out the market and strategy study for a lump sum price (including fees and expenses) of:

FrF 800 000 (eight hundred thousand), free of taxes.

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5.2 TERMS OF PAYMENT

There are five terms of payment expressed in percentages of the lump sum. The terms of payment are related to the products & schedule of execution as depicted in exhibits 1 & 3.

360 000 FrF initial payment at putting into force of the contract,

440 000 FrF upon submission of the market & strategy report

1 260 000 FrF upon submission of the intermediate engineering report

1 260 000 FrF upon submission of the draft final report

280 000 FrF on submission of the final report.

Payments will be made directly to SOFRESID through a firm, irrevocable and confirmed at sight letter of credit for the contractual amount in FrF. This letter of credit shall remain valid for 8 months after the putting into force of the contract.

5.3 PUTTING IN FORCE

The contract shall be put into force when the following conditions are met:

- signature by both parties

- approval by governments

- opening of the letter of credit and receipt of the first instalment by Sofresid

5.4 GENERAL TERMS & CONDITIONS

Sofresid accepts the general terms and conditions as stated in the call for tender documents.

5.5 VALIDITY OF THE PROPOSAL

The terms and conditions of the present proposal are valid until September 30th 1992..

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BIO DATA OF KEY EXPERTS

collection of datain Abu Dhabi

notification to startthe assignment

Exhibit 1: Principle organization of the study.

market study elaboration ofdevelopment strategy

selection of basicprocess technology

Selection of- product mix- structure of sales- capacity of production

sources & costsof main inputs

products

appraisal report

market & strategyreport

draft final report

final report

capital & operatingcost estimations

finance & economicstudies

project schedule

general layoutfinalization

basic process study

selection main equiptflowsheets

General layout

site selection

technical details

definition structures production plan

personnel schedule

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intermediateengineering report

(related to terms of payment)

project managercoordinator

Exhibit 2: Project team

market expertdevelopment strategy

expertincl supply of major inputs

steel expertrolling mills

finance & economyexpert

plant & equipment(process)2 experts

plant & equipment(general disciplines)

7 engineers)

human resourcestraining

1 specialist

technical assistants & secretariat services

key experts

25

month 1 month 2

notification to start

collection of data in Abu Dhabi

mark et & strategyof development

Steps/actions

Exhibit 3: Principle schedule of execution

month 3 month 4

products

Market & strategy report

draft of final report

final report

month 5 month 6 month 7

Intermediate engineering report

basic process, selection ofmain equipment

elaboration of technical& engineering details

26

Experts domaine tarifs Abu Dhabi Paris total honoraires voyages Prix AR

Iégy/Sordell marché 6000 10 10 20 120000 2 40000

J Astier stratégie 3300 10 10 20 66000 2 40000

C Roederer steel expert 6000 10 10 20 120000 2 40000

Ratcliffe PM & financial 7000 15 15 30 210000 4 80000

Batailler? P&E process 6000 5 15 20 120000 1 20000

autres P&E other 6000 10 10 60000 1 20000

Théron siting 4500 15 15 67500 1 20000

Lacoste fluides 6000 5 5 30000 0

Breton électricité 6500 5 5 32500 0

de chez Beth cité 4500 10 10 45000 0

.... projeteurs 4500 20 20 90000 0

.... dessinateurs 3500 20 20 70000 0

total 50 125 175 961000 13 260000

Coût total

honoraires 961000

voyages 260000

frais de séjour 41250

total FrF 1262250

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