Re: Invitation for Pre-Qualification to Participate in a ... · Re: Invitation for Pre-Qualification to Participate in a Tender for the Submission of Bids to Purchase the Ramat Hovav

1 L/566005/2190/8115461/1

Date: September 19, 2019

To:

All Participants

Re: Invitation for Pre-Qualification to Participate in a Tender for the Submission of

Bids to Purchase the Ramat Hovav Transferred Facilities

Addendum No. 4

Pursuant to the provisions of Section 2.15 (Addenda) of the Invitation for Pre-Qualification,

Participants are hereby informed of the attached clarifications and Addenda to the Invitation for

Pre-Qualification.

As set forth in Section 2.15.4 of the Invitation for Pre-Qualification, you are kindly requested to

acknowledge receipt of this Addendum, by no later than 2 (two) working days following

receipt thereof, by a written notice to the Tender Committee, in the format attached at the

bottom of this Addendum.

Sincerely,

Amir Livne, VP

Head of strategy and restructure process

Israel Electric Co.

CC: Members of the Tender Committee

I.E.C Ltd. – Ramat Hovav Addendum No. 4

2

ANNEX 1 – CLARIFICATIONS AND ADDENDA

Invitation for Pre-Qualification Section

1. Q: Please provide the criteria for ranking bids as "optimal". This is important at this stage

as it may have an effect on the advisable structure of the Participant.

1.4

A: The Tender Committee rejects the request. The criteria for ranking and evaluating Bids

shall be provided within the Tender Documents, to be published following the

completion of Pre-Qualification Stage.

2. Q: The Tender Committee is requested to postpose the final date for the submission of

Requests for Clarification to September 5, 2019.

1.5.1

A: The Tender Committee rejects the request.

3. Q: Please confirm that if a Participant consists of one Entity, such Entity shall be deemed

the "Participant" and the "Member" for purposes of the Pre-Qualification Process.

3.1.1

A: Please refer to Section 3.3.5 of the Invitation for Pre-Qualification.

4. Q: The Participant is a single Entity, which is part of a multinational group which

develops and operates energy assets with gross capacity of 23,168 megawatts. The

Participant is a foreign private company that will act as both the Participant and the

Member. Following the announcement of the Participant as an Eligible Participant, an

Israeli SPV, wholly owned by the Participant, will be formed as required under Section

3.2.1 of the Invitation. In order to demonstrate the Participant's compliance with the

Financial Pre-Qualification Requirements, the Participant intends to rely on a

Guarantor which controls the Participant indirectly, in accordance with Section 5.7 of

the Invitation.

The Tender Committee is kindly requested to confirm that the Participant may

participate in the Pre-Qualification Process as set forth in the Holding Structure.

3.1; 3.2

A: Please refer to Sections 3.1, 3.2, 3.3 and 5.7 of the Invitation for Pre-Qualification.

SPV (to be formed)

Company A

Company B

The Participant

Company D Guarantor Company C

100% 50% 50%

100%

100%

100%


3

50% 50%

100%

5. Q: The Tender Committee is requested to clarify that a limited partnership which has been

established more than 3 months prior to the Pre-Qualification Submission Date, which

has no activity and whose holding structure is as set forth (the "LP Participant"), may

constitute a Participant which is a "single Entity" for the purposes of Section 3.1.1 of

the Invitation, and that accordingly:

(i) the partners in the LP Participant (i.e., the entities marked below as the "GP",

"Entity X", "Entity Y" and the "Financial Entity 1", "Financial Entity 2", "Financial

Entity 3") (jointly the "LP Partners") shall not be considered as Members pursuant to

Section 3.3.1 of the Invitation; and

(ii) Pursuant to Section 3.3.5 to the Invitation, only the LP Participant (and not any of

the LP Partners) shall be deemed as a "Member", and therefore only the LP Participant

shall be required to complete and sign "Pre-Qualification Form C – The Member of the

Participant".

(iii) in order to demonstrate compliance with the Financial Pre-Qualification

Requirements under Section 5 to the Invitation, the LP Participant (in its capacity as a

"Participant" and as a "Member" Pursuant to Section 3.3.5 to the Invitation) may rely

on one of the shareholders that Control the LP Participant's general partner (the "GP")

(e.g., the entity marked as "Entity X" below) as a Guarantor pursuant to Section 5.7.1

of the Invitation and as a Related Entity pursuant to Section 4.5.1 of the Invitation.

Accordingly, such Entity X shall complete and sign the "Pre-Qualification Form L –

Letter of Guarantee" and the "Pre-Qualification Form D – The Related Entity".

(iv) Following completion of the Pre-Qualification Process (provided that the LP

Participant shall be announce as Eligible Participant): (a) the LP Participant may form a

SPV which is a limited company (incorporated under the laws of Israel) to be hold

100% by the LP Participant (i.e., the entity marked as "Company"), one of the purposes

of which shall be the participation in the Tender Process; and (b) only the LP

Participant (and not any of the LP Partners nor any of their shareholders) shall be

deemed as a "Member".

3.1-3.3

& 5.7

LP Participant

(Limited Partnership)

(the "Participant")

GP

Entity X

(LP)

Entity Y

(LP)

Financial

Entity 1 (LP)

Entity X Entity Y

Financial

Entity 2 (LP)

Financial

Entity 3 (LP)

SPV

(to be formed)


4

A: The Tender Committee rejects the request. It is hereby clarified that such a structure of

Pre-Qualification Submission will be disqualified by the Tender Committee due to the

provisions of Section 3.1.1 of the Invitation for Pre-Qualification, regarding the limited

number of Members of the Participant.

Without derogating from the foregoing, the following Section 3.1.3 will be added to the

Invitation for Pre-Qualification:

3.1.3 Without derogating from the provisions of Section 3.2.4 below, it is hereby

clarified that in case the Participant is a new established Entity (including a SPV

and a limited partnership), incorporated after July 15, 2018, it shall not be

considered as a single Entity, for the purpose of this Pre-Qualification Process,

but it shall be considered as a Group, and its shareholders or partners shall be

considered as Members, and all relevant provisions of the Invitation shall apply.

6. Q: A Participant/Member which is a major supplier of equipment or services to the Ramat

Hovav Transferred Facilities (such as a turbine supplier) ("Major Supplier") holds a

substantial and unfair advantage over other Participants/Members in preparing its bid,

because it has a firsthand knowledge of the equipment/services true status. Needless to

mention that the said advantage increases in case the Major Supplier has a long term

agreement that would be assigned to the successful bidder (i.e., an LTSA). Thus, in

order to maintain the fundamental principles of fairness and equality as required under

the tender law, the Tender Committee is kindly requested to prohibit the participation

of Major Suppliers and/or their affiliates in the Pre-Qualification Process.

3.3



5

7. Q: The Tender Committee is requested to clarify that the provisions determining that a

Member cannot be an entity (including a SPV) which was incorporated after the date

which is three (3) months prior to the Pre-Qualification Submission Date (hence July 1,

2019) (the "Incorporation Deadline"), shall not apply with respect to Members which

constitute Private Investment Funds.

In general, Private Investment Funds operate in a manner in which equity is first raised

by the managing partners via one incorporated fund, and when all the commitments of

such fund have been deployed, additional investment funds managed by the same

managing partners and which contain the same general partner are founded (i.e.,

"successor funds"). Successor funds are typically special purpose vehicles formed for

purposes of co-investments, among others for the purpose of participating in

government tenders such as the Tender.

Accordingly, the rationale underlying Section 3.3.3 is not relevant with respect to

successor funds as they are managed by experienced managing partners, and more

importantly, consist of the same general partners of the former funds, which have been

incorporated long before the Incorporation Deadline and which are fully liable for any

and all of the successor funds' obligations. The Tender Committee itself is clearly

aware of this notion, as among others, it refers throughout the Invitation to the capital

commitments and contributions of each fund jointly with all other funds under common

control (see definition of the term "Assets Under Management" and, among others, its

use with respect to Financial Pre-Qualification Requirements in Section 5.6.2).

3.3.3



6

8. Q: The Tender Committee is kindly requested to clarify that a Participant who

demonstrates its compliance with the Professional Pre-Qualification Requirement set

forth in Section 4.1 (Operation and Maintenance Experience) of the Invitation by

relying on the experience of a Major Subcontractor, may provide the operation and

maintenance services for the Transferred Facilities either:

(a) Through an operation and maintenance agreement with the Major

Subcontractor; or

(b) Through an operation and maintenance agreement with a joint venture

comprised of the Major Subcontractor and another Entity, provided that the

Major Subcontractor shall hold at least 50% of the interests in such joint

venture.

In addition to the fact the structure described in paragraph (b) above is in line with

market practice for PPP tenders in Israel, we believe that such structure will be

beneficial to the operation and maintenance of the Transferred Facilities, since it will

allow the provision of the services through a collaboration between a foreign Entity,

who possesses the required experience under Section 4.1 of the Invitation (the Major

Subcontractor) and an Israeli Entity, who is familiar and experienced with the local

standards, permits and procedures, and all without derogating from the obligations of

the Participant and the Major Subcontractor under the Invitation.

3.4; 4.5.3

A: The Tender Committee rejects the request. Please refer to Section 3.4.1 of the

Invitation and to Section 11.6 of Pre-Qualification Form E.

Without derogating from the provisions of the Invitation for Pre-Qualification, it is

hereby clarified that in case that the Participant is demonstrating compliance with

Section 4.1 (Operation and Maintenance Experience) by relying on a Major

Subcontractor, then the Major Subcontractor shall provide all of the operation and

maintenance services for the Transferred Facilities, unless otherwise stated or approved

by the Tender Committee. Nothing in the aforesaid shall derogate from the provisions

of the Tender Documents, to be published by the Tender Committee following the

completion of the Pre-Qualification Process.

9. Q: As Part of the Pre-Qualification Submission the Participant is required to submit

confidential information regarding its financial data and activities. Therefore, the

Tender Committee is kindly requested to amend Form G, to be a mutual undertaking to

maintain confidentiality by the Participant/Member/Guarantor (as applicable), and by

IEC and the Advisors.

3.8


10. Q: Please confirm that only a Related Entity which is demonstrating compliance with a

Pre-Qualification Requirement is required to submit Pre-Qualification Form D.

3.12.5


7

A: The Tender Committee so confirms.

11. Q: Please waive the requirement that the agreement with the Major Subcontractor be

submitted as part of the Pre-Qualification Submission so long that the Major

Subcontractor submits Pre-Qualification Form E, and that such agreement is submitted

as part of the bid in the Tender.

3.12.6


12. Q: According to Section 4, there are four Professional Pre-Qualification Requirements

(“Professional Requirements”) and each Participant is required to demonstrate

compliance with the requirement set out in Section 4.1 (Operation and Maintenance

Experience) (“O&M Experience”) and also with at least one of the three requirements

set out in Sections 4.2, 4.3 and 4.4.

As the Tender Committee is surely aware, pursuant to the Invitation for Pre-

Qualification regarding the Alon Tavor site, the participants were required to

demonstrate compliance with (at least) two of the four Professional Requirements (i.e.

each of the Professional Requirements was treated the same).

In order not to prevent extremely suitable participants form participation in the Pre-

Qualification Submission, the Tender Committee is kindly requested to amend Section

4 as follows:

a) to replace the preamble of Section 4 with the wording as follows: “Each

Participant will be required to demonstrate compliance with at least two of the

four Professional Pre-Qualification Requirements set out in Section 4.1, 4.2,

4.3 and 4.4 below, as follows:”;

OR

b) to replace the preamble of Section 4 with the wording as follows: “Each

Participant will be required to demonstrate compliance with at least three of

the four Professional Pre-Qualification Requirements set out in Section 4.1,

4.2, 4.3 and 4.4 below, as follows:”

4



8

13. Q: In order to demonstrate O&M experience a Participant must demonstrate 5 continuous

years of experience, in the last 7 years.

As the Tender Committee is surely aware, in the Alon Tavor Tender, which has been

concluded only a few months ago, the O&M experience requirement related to a two

years period.

The Tender Committee is thereby requested to either:

(1) allow an option for the Experience Provider whose production license is with

respect to a very large magnitude Power Plant(s), e.g. above 800 MWH, to

prove its experience for 4 continuous years, in the last 7 years, instead of 5

years;

OR

(2) Extend the 7 years period so that it will relate to the period between 1 October

2012 and the anticipated Handover date (end of 2020).

4.1.1

A: The Tender Committee decided to accept the request, so that Section 4.1.1 of the

Invitation for Pre-Qualification will be amended as follows:

"Each Participant is required to demonstrate that the last 7 (seven) years, an Experience

Provider on its behalf has proven operation and maintenance experience with respect to

the operation and maintenance of Power Plant(s) for the generation of electricity,

provided that they are not Renewable Energy Power Plant(s) (“Power Plant(s)”), with

a cumulative installed power that appears in the generation license(s) (insofar as such

license(s) is required) of at least 200 (two hundred) megawatts (MW), throughout a

continuous period of a least five four years, between October 1, 2012 and the Pre-

Qualification Submission Date (Hereinafter: "Operation and Maintenance

Experience")."

14. Q:

Please clarify that "generation license(s)" should include also "provisional license". 4.2.1.1


9


Without derogating from the foregoing, Sections 4.2 of the Invitation for Pre-

Qualification will be amended as follows, and the new Section 4.2.5 will be added to

Section 4.4 as well, with the necessary changes:

4.2 Entrepreneurship Experience

4.2.1 The Participant is required to demonstrate that in the last 10 (ten) years, an

Experience Provider on its behalf has proven entrepreneurship experience in

Entrepreneurship in at least one of the following:

4.2.1.1 Entrepreneurship of Power Plant(s), with a cumulative installed

power that appears in the generation license(s) (insofar as such

license(s) is required) of at least 200 (two hundred) megawatts

(MW); or

4.2.1.2 Entrepreneurship of one or more Infrastructure Projects, with a

construction cost for a single Infrastructure Project of at least NIS

1,000,000,000 (one billion New Israeli Shekels) (not including

VAT), or a cumulative construction cost for, at the most, up to 4

(four) Infrastructure Projects, of at least NIS 2,000,000,000 (two

billion New Israeli Shekels) (not including VAT).

(Hereinafter: "Entrepreneurship Experience")

4.2.2 For the purpose of this Section, Entrepreneurship refers to the financial close

of a project, and in the case of self-financing – winning a

tender/procedure/signing an engagement contract/obtaining a

license/concession for the implementation of the project.

4.2.3 For the purpose of this Section, the Experience Provider shall demonstrate

Entrepreneurship Experience as stated above, during the period between

October 1, 2009 and the Pre-Qualification Submission Date.

4.2.4 Form of Submission: In order to demonstrate compliance with this Section

4.2 (Entrepreneurship Experience), the Experience Provider shall submit

Pre-Qualification Form I2, duly completed and signed.

4.2.5 It is hereby clarified that projects that are presented by the Participant for the

purpose of demonstrating compliance with this Section 4.2

(Entrepreneurship Experience) may not be presented by the Participant for

the purpose of demonstrating compliance with Section 4.4 (Experience in

Financial Close) below.


10

15. Q:

The Tender Committee is requested to clarify that Entrepreneurial Experience and/or

Ownership Experience can be demonstrated by Entrepreneurship and/or Ownership of

a Power Plant or several Power Plants with a cumulative installed power that appears in

the generation license of at least 190 MW, instead of 200 MW as it is currently

specified in the Invitation.

Not only is the difference between 190 MW and 200 MW insignificant (a mere 5%),

but it also correlates with the ± 5% production tolerance already prevalent in the energy

sector, and specifically in the various specifications published by the IEC with respect

to their generation facilities. Among others:

(i) the Government Resolution itself specifies that as part of the Reform, the IEC

(via its designated subsidiary) shall construct two (2) combined cycle power

plants with cumulative installed capacity of 1,200 MW, "whereas a 5% upward

deviation shall not be considered a deviation from such capacity" (see section

B.5(c) to the Government Resolution);

(ii) in its Book of Standards, the Electricity Authority specifies that the IEC is

required to connect a production site to the voltage network as long as the

connection size required is up to 5% higher than the connection size specified in

the preceding connection survey (See Standard 35(e)(6)(d)(4));

(iii)to the best of our knowledge, the Electricity Authority has been awarding "tariff

approvals" to various private electricity producers, under which, the installed

capacity of such producers' production plants are specified with a ± 5%

production tolerance (with respect to the installed capacity specified in such

facility's production license);

Accordingly, a Power Plant or several power plants with a cumulative installed power

of 190 MW should be more than sufficient for the purpose of meeting the said

condition.

In addition, to our best knowledge, there are only a handful of eligible local factors in

the energy market who can demonstrate Entrepreneurial Experience or Ownership

Experience with a cumulative installed power of at least 200 MW. Accordingly, the

current wording set forth in the Invitation raises the concern that a significant number

of experienced local entities operating in the energy sector would in fact be excluded

from participating in the tender, thus completely underlying the competitive rational of

the PQ process.

4.2.1.2 &

4.3.1.2


16. Q: Please clarify that the Ownership Experience need not be demonstrated for the entire

period stated in Section 4.3.2.

4.3.2


11

A: Please refer to Sections 4.3.1.1 and 4.3.1.2 of the Invitation for Pre-Qualification,

according to which the Participant shall demonstrate Ownership Experience for at least

two continuous years in the last 7 (seven) years.

17. Q: According to the drafting of the requirement, it appears that an entity cannot meet this

requirement although it holds an infrastructure project at the Pre-Qualification

Submission Date, if it was first recorded before October 1, 2012.

The committee is requested to clarify that such Holding will comply with the

requirement in the event the property was recorded before October 1, 2012, as long as

the Experience Provider holds the project at the Pre-Qualification Submission Date.

4.3.2

A: Without derogating from the provisions of the Invitation for Pre-Qualification, it is

hereby clarified that for the purpose of Section 4.3 of the Invitation for Pre-

Qualification, the Starting Date of Ownership may be recorded before October 1, 2012.

18. Q: The Tender Committee is requested to clarify that Participants can demonstrate

Experience in Financial Close (insofar as they prove experience in financial close in

accordance to the terms specified in Section 4.4.1) with respect to a financial close that

was reached during the period between October 1, 2009 and the Pre-Qualification

Submission Date, instead of a financial close that was reached "in the last 7 (seven)

years" as it is currently specified in the Invitation.

The said clarification is required as under the Invitation's current wording there is a

clear discrepancy within the Invitation's Professional Pre-Qualification Requirements.

For example, the current wording enables unreasonable situations under which a

financial close reached on October 1, 2009, while enabling a Participant to demonstrate

Entrepreneurship Experience (pursuant to the "financial close" option set forth in the

Pre-Qualification Form I2), fails to enable the same Participant to demonstrate

Experience in Financial Close.

4.4.1


12

A: The Tender Committee decided to accept the request partially.

Section 4.4 of the Invitation for Pre-Qualification will be amended as follows:

4.4 Experience in Financial Close

4.4.1 The Participant is required to demonstrate that in the last 7 (seven) years, an

Experience Provider on its behalf has proven experience in reached a

financial close of an Infrastructure Project, the construction cost of which is

at least NIS 1,000,000,000 (one billion New Israeli Shekels) (not including

VAT), or with a cumulative construction cost for, at the most, up to 4 (four)

Infrastructure Projects, of at least NIS 2,000,000,000 (two billions New

Israeli Shekels) (not including VAT), in Israel and/or the United States of

America and/or OECD Countries (Hereinafter: "Experience in Financial

Close").

4.4.2 For the purpose of demonstrating compliance with this Section 4.4

(Experience in Financial Close), the Experience Provider shall prove, inter

alia, that it has reached a financial close, as stated above, during the period

between October 1, 2012 and the Pre-Qualification Submission Date.

4.4.3 Form of Submission: In order to demonstrate compliance with this Section

4.4 (Experience in Financial Close), the Experience Provider shall submit

Pre-Qualification Form I4, duly completed and signed.

4.4.4 It is hereby clarified that projects that are represented by the Participant for

the purpose of demonstrating compliance with this Section 4.4 (Experience

in Financial Close) may not be represented by the Participant for the

purpose of demonstrating compliance with Section 4.2 (Entrepreneurship

Experience) above.


13

19. Q: According to the current wording of Section 4.4.1, Experience in Financial Close can

be demonstrated by a Participant, among others, via an Experience Provider on its

behalf with proven experience in financial close of an Infrastructure Project, which the

construction cost of is at least NIS 1,000,000,000 (not including VAT).

The Tender Committee is requested to clarify that the said condition also applies to

cases in which a Participant has proven experience in the financial close of more than

one Infrastructure Project with cumulative construction costs of at least NIS

1,000,000,000 (not including VAT), insofar as the said financial close was

simultaneously reached with respect to all such Infrastructure Projects, in the

framework of one single financing agreement and/or one single financing process vis-

a-vis the same lender(s), and which, among others, the borrower provided mutual

guarantees with respect to all Infrastructure Projects under the said financing process.

One can safely assume that the purpose the said condition is to ensure that Participants

have successfully completed a financial close with respect to a financing process of a

sufficient magnitude (in the case of the Tender, in the scope of at least NIS

1,000,000,000). Therefore, such experience can be demonstrated in any case where the

Experience Provider reached a financial close with respect to a financing process in

which the loan/facility amount was of at least NIS 1,000,000,000, regardless of the

number of Infrastructure Projects subject to the said financing.

4.4.1


20. Q: Section 4.4.1 fails to set a clear timeframe as to which a Participant's Experience in

Financial Close can be demonstrated.

The Tender Committee is requested to clarify that Participants can demonstrate

Experience in Financial Close (insofar as they prove experience in financial close in

accordance to the terms specified in Section 4.4.1) with respect to a financial close that

was reached during the period between July 15, 2012 and the Pre-Qualification

Publication Date (July 15, 2019).

Specifically, we recommend avoiding setting a timeframe which uses the Pre-

Qualification Submission Date as an anchor, as the said date is expected to be

repeatedly postponed (thus causing more uncertainty).

In addition, since the original Pre-Qualification Submission Date was originally

planned to take place during September 2019 (as demonstrated in the Key Milestones

of the "Ramat Hovav Teaser") we ask that that in any case whatsoever, the Tender

Committee will allow Experience in Financial Close to be demonstrated via any

financial close that was reached during September 2012 (or later).

4.4.1

A: Please refer to Section 18 of Annex 1 above.


14

21. Q: The Tender Committee is requested to clarify that Section 4.4.1 shall also apply with

respect to cases in which the financial close was reached in the framework of a

refinancing process, mainly as the difference between reaching financial close via a

financing agreement or a refinancing agreement is merely semantic.

4.4.1


22. Q: The Tender Committee is requested to clarify that Section 4.4.1 shall also apply with

respect to cases in which the financial close was reached in the framework of a

refinancing process of one or more already-operating Power Plants.

This clarification should be accepted as the refinancing process of an already operating

Power Plant(s) should be quite similar to the financing process faced by the Successful

Bidder with respect to the purchase of the Tender Facilities, mainly given that the latter

also constitute "an already operating Power Plant(s)".

4.4.1


23. Q: The Tender Committee is requested to clarify that under Section 4.5.2, one Member

holding less than 25% of the Anticipated Holdings in the Participant may serve as

Related Entity through which another Member, which holds at least 25% (twenty-five

percent) of the Anticipated Holdings in the Participant, can demonstrate compliance

with the Professional Pre-Qualification Requirements.

4.5.2

A: The Tender Committee so approves.


15

24. Q: There are few potential O&M subcontractors. Furthermore, engaging with a

subcontractor in this early stage, is not only difficult to accomplish in the short time

allotted for the PQ stage, but most probably will prevent the Participant from

negotiating more favorable commercial terms with such subcontractor on a later stage.

This will obviously influence the Participant’s Bid and make it less competitive.

The Tender Committee is kindly requested as follows:

a) to set the O&M Experience as a condition precedent to the Handover or at least

to postpone the deadline for meeting such requirement to the Bids Submission

Date, leaving more time to negotiate a reasonable O&M agreement with a

subcontractor;

OR

b) to clarify in Section 4.5.3 to the Invitation that the Participant may submit

several Major Subcontractors, on a non-exclusive basis, and to clarify in Section

11.11 to Pre-Qualification Form E that each such Major Subcontractor may

participate in more than one Pre-Qualification Submission; and continue with

one (or more) of them in a later stage - only following the selection of the

Successful Bidder, or at least prior to the Bids Submission Date.

4.5.3


Nothing in the aforesaid shall derogate from the provisions of the Invitation for Pre-

Qualification and the provisions of Section 3.10 thereof.

25. Q: The Tender Committee is requested to clarify that a Participant's ability to demonstrate

Operation and Maintenance Experience through a Major Subcontractor pursuant to

Section 4.5.3, should be subject to a definitive and binding O&M Agreement between

such Participant and a Major Subcontractor. Specifically, such agreement should

determine that subject to the Participant being declared as a successful bidder, the

Participant is bound to solely use the Major Subcontractor for the execution of the

required operation and maintenance services of the Transferred Facilities, and the

Major Subcontractor is similarly bound to providing such services to the Participant.

This issue bears significant importance given that in the framework of the last tender

under the Reform (for the sale of the Alon Tavor Tender Facilities) a host of Eligible

Participants, including the eventual winner of the Tender, demonstrated their Operation

and Maintenance Experience via an agreement with a Major Subcontractor which can

be terminated by each of the parties, following a 45 (forty five) days' notice. It is

clearly unreasonable that a Participant could demonstrate compliance with such an

important pre-qualification requirement (the only Professional Requirement which

Participants cannot bypass) via an unbinding engagement with an outside contractor

which can then be terminated by the contractor at any stage whatsoever.

4.5.3



16

26. Q: Given that Operation and Maintenance Experience constitutes the sole Professional

Requirement which every Participant is required to meet under the Invitation, and

given that most O&M agreements can be usually be terminated by the Major

Subcontractor shortly after the Pre-Qualification stage, we ask that the Tender

Committee awards those Participants which demonstrate their Operation and

Maintenance Experience by themselves.

Accordingly, we ask that the Tender Committee clarifies that Operation and

Maintenance Experience shall also constitute a criteria which entitles Participants to

receive a score under Section 6.4 of the Invitation, but only insofar as the Operation

and Maintenance Experience is demonstrated by the Participant via its own O&M

experience ("inhouse") or via the experience of a related entity (i.e., section, O&M

experience can without an agreement with an external Major Subcontractor under

Section 4.5.3).

4.5.3


27. Q: Please clarify that if the O&M experience is demonstrated by a Major Subcontractor,

such Major Subcontractor is not required to have "held" the referenced project, but may

present a project in which it has provided the O&M services.

4.5.3;

4.5.4

A: Please refer to Sections 4.1 and 4.5.3 of the Invitation for Pre-Qualification.

28. Q: Please clarify that for purposes of Section 4.5.4, the term "held" includes both direct

and indirect holdings, as does the defined term "Hold".

4.5.4


17

A: The Tender Committee rejects the request. It is hereby clarified that the term "Hold", as

it is defined in Section 1.21 of Annex 1 of the Invitation, does not apply to Section

4.5.4 of the Invitation.

Without derogating from the aforesaid, Section 4.5.4 of the Invitation for Pre-

Qualification will be amended as follows:

4.5.4 In addition to the aforesaid, for the purpose of demonstrating compliance with

the Professional Pre-Qualification Requirements, an Experience Provider may

present and rely on a referenced project which was executed by another Entity,

as follows:

4.5.4.1 In order to demonstrate compliance with Section 4.1 (Operation and

Maintenance Experience), the Experience Provider may present a

project that was held by it, directly or indirectly, as a joint venture or as

a jointly held company, provided that the Experience Provider held, at

least, 50% (fifty percent) of the share capital of the joint venture or the

held company (as is relevant). In such a case, the Experience Provider

will accordingly be credited with the entire amount of the experience

attributed to the joint venture or the held corporation (as is relevant).

4.5.4.2 In order to demonstrate compliance with Section 4.2 (Entrepreneurship

Experience) and with Section 4.3 (Ownership Experience) and with

Section 4.4 (Experience in Financial Close), the Experience Provider

may present a project that was held by it, directly or indirectly, as a joint

venture or as a jointly held company, provided that the Experience

Provider held, at least, 25% (twenty five percent) of the share capital of

the joint venture or the held company (as is relevant). In such a case, the

Experience Provider will accordingly be credited with the entire amount

of the experience attributed to the joint venture or the held corporation

(as is relevant).

29. Q: According to this be attributed only if one Experience Provider held at least 50% of the

referenced project. As the IPP market in Israel is relatively young, and there are not so

many relevant players, we ask the Tender Committee to:

(1) Allow 2 partners which held (and are still holding) together more than 50% in

the referenced project, and which are also expected to hold more than 50% of

the Participant, to be regarded as complying with this section.

OR

(2) Set the threshold to 25%, as is with respect to the other Professional Pre-

Qualification Requirements (in section 4.5.4.2).

4.5.4.1



18

30. Q: The Tender Committee is kindly requested to amend a typo in Section 4.5.4.2, such

that the reference will be to Section 4.2 instead of Section 4.1.

4.5.4.2

A: The Tender Committee accepts the request. Section 4.5.4.2 of the Invitation for Pre-

Qualification will be amended accordingly.

31. Q:

First, we would like to thank the Tender Committee for allowing the Members to

demonstrate their compliance with the Financial Pre-Qualification Requirements by

relying on their most recent quarterly Financial Statements.

Due to time constrains, however, we will not be able to take the required measures in

order to meet the required Equity threshold prior to the scheduled Pre-Qualification

Submission Date.

In light of the above, and in order to enable our parent company to consider providing a

parent company guarantee and enable our company to participate in the Tender, we

hereby kindly request the Tender Committee to clarify that:

(a) If (at any time following the Pre-Qualification submission), a Member relying

on a Guarantor, will demonstrate compliance with all of the Financial Pre-

Qualification Requirements independently, such Member's Guarantor shall be

released from all of its obligations under the Tender.

(b) According to the preamble of Form "L" (and to the nature of the guarantee), it

is understood that a guarantee provided by a Guarantor should only apply with

respect the Member seeking to rely on such Guarantor (and should not apply

with respect to the Participant). Please amend section 2.5 of Form "L" by

deleting the words "the Participant/".

5.7,

PQ Form

L

A: The Tender Committee decides as follows:

(a) Regarding section (a) of the request above – the Tender Committee rejects the

request.

(b) Regarding section (b) of the request above – please refer to Section 64 of

Annex 1 below.

32. Q:

The Tender Committee is requested to clarify that in case a Member relies on a

Guarantor in order to demonstrate compliance with Equity as part of the Financial Pre-

Qualification Requirements, such Member's Average Turnover, insofar it was not

included in the Guarantor’s financial statements, can be used for the calculation of the

Weighted Turnover as in section 5.2.2.

5.7.1



19

33. Q:

The Tender Committee is requested to clarify that in case a Member relies on a

Guarantor (which is a Member as well) in order to demonstrate compliance with Equity

as part of the Financial Pre-Qualification Requirements, such Member's Average

Turnover, insofar it was not included in the Guarantor’s financial statements, can used

for the calculation of the Weighted Turnover as in section 5.2.2.

The said notion coincides with the wording of Section 5.7.1 to the Invitation which

emphasizes that the compliance of the Member and/or the Guarantor can be

demonstrated "in their entirety and cumulatively".

5.7.1

A: Please refer to Section 32 of Annex 1 above. Without derogating from the foregoing, it

is hereby clarified that the wording "in their entirety and cumulatively" refers only to

demonstrating compliance with the Financial Pre-Qualification Requirement set out in

Section 5.4 of the Invitation for Pre-Qualification.

34. Q:

The Tender Committee is requested to clarify that a Guarantor might be a subsidiary of

the same parent company as the Member's.

5.7.1

A: Please refer to the definition of "Guarantor", as this term is defined in Section 5.7.1 of

the Invitation for Pre-Qualification.

35. Q:

Please expand the definition of the "Guarantor" so that it may include also an affiliated

Entity of such Member (similarly to the definition of "Related Entity"), so long that

itself complies with all the Financial Pre-Qualification Requirements and other

requirements of the Guarantor.

5.7.1


36. Q:

Please confirm that in the event of a reliance by a Member on a Guarantor, where such

Member does not have audited Financial Statements for all the years set out in the Pre-

Qualification Form J1 (for instance if it is a newly incorporated Entity), such Member

shall fill out Form J1 only with respect to the available Financial Statements of

Member as of the Pre-Qualification Submission Date.

5.8.1

A: The Tender Committee so confirms.

37. Q:

Please clarify that in the event of a reliance by a Member on a Guarantor (which is a

Private Investment Fund), only the Guarantor will be required to submit Pre-

Qualification Form J.

5.8.3; PQ

Form J3



20

38. Q: Please cancel the requirement to include the auditor's confirmation in the Pre-

Qualification Form "K", at least with respect to publicly traded companies, so long that

Pre-Qualification Form "J1" is signed by the CFO of the Member (and the Guarantor,

as applicable), and that such Member (and Guarantor, as applicable) submits copies of

the relevant Financial Statements as part of its Pre-Qualification Submission.

The requirement to include an auditor's confirmation is costly and cumbersome,

especially for foreign global holding companies. Such requirement did not exist, by

way of example, In the sea-water desalination pre-qualification processes.

Alternatively, if our foregoing request is not granted, please allow such requirement to

be satisfied by delivering an accompanying letter to Pre-Qualification Form "J1" to be

signed by the auditor of such Member (and Guarantor, as applicable)

5.8.4


39. Q: Please clarify that in the event of a reliance by a Member on a Guarantor, only the

Guarantor will be required to submit a certification from its auditor, certifying its

compliance with all the Financial Pre-Qualification Requirements.

5.8.4; PQ

Form K


40. Q: We kindly request that the Tender Committee confirm that the submission of Financial

Statements based on Hong Kong Financial Reporting Standards ("HKFRS") be

allowed. Please note that HKFRS have been fully converged with International

Financial Reporting Standards (IFRS) for annual reporting periods commencing from 1

January 2005.

5.8.6

A: The Tender Committee decided to accept the request.

Section 5.8.5 of the Invitation for Pre-Qualification will be amended accordingly.

41. Q: Please indicate the exchange rates from HK$ which should be added to the table in

Section 5.9.1.

5.9.3


21


The tables in Sections 5.9.1 and 5.9.2 will be amended as follows:

Currency Rate of exchange (NIS) for conversion of

financial data for the year:

Year 2016 2017 2018

1 US dollar (US$) 3.874 3.656 3.608

1 euro (€) 4.145 4.098 4.222

100 Japanese Yen (JPY) 3.264 3.183 3.246

1 Chinese Yuan

renminbi (CNY) 1.736 0.577 1.845 0.542 1.857 0.539

1 Hong Kong dollar

(HKD) 0.499 0.469 0.461

Currency Rate of exchange (NIS) for conversion

1 US dollar (US$) 3.748

1 euro (€) 4.292

100 Japanese Yen (JPY) 3.411

1 Chinese Yuan

renminbi (CNY)

1.835 0.545

1 Hong Kong dollar

(HKD)

0.479

42. Q: Please confirm that the authorization of a foreign attorney is satisfactory with respect to

foreign Entities (in addition to an Israeli attorney).

7.4.1

A: There is no change in the provisions of the Invitation for Pre-Qualification.

43. Q: The Tender Committee is kindly requested to amend a typo in Section 7.8.1.2, such

that Envelope No.2 will be marked as "Envelope 2 – Financial Data" (instead of

"Envelope 1 – Financial Data").

7.8.1.2

A: The Tender Committee accepts the request. Section 7.8.1.2 of the Invitation for Pre-

Qualification will be amended accordingly.


22

44. Q: According to Section 4, the Participant is required to demonstrate compliance with the

Professional Pre-Qualification Requirement set out in Section 4.1, and also with at least

one of the Professional Pre-Qualification Requirements set out in Sections 4.2-4.4.

Therefore, the Tender Committee is kindly requested to clarify that a Participant will

not be deemed to have failed to demonstrate compliance with the Professional Pre-

Qualification Requirements, as long as it has demonstrated compliance with Section

4.1 and one of the requirements under Sections 4.2-4.4 (meaning - a Participant that has

complied with Section 4.1 and Section 4.2, however failed to demonstrate compliance

with Section 4.3, shall be deemed as a Participant which demonstrated compliance with

the Professional Pre-Qualification Requirements).

8.4.3

A: The Tender Committee so approves.

45. Q: As part of the Pre-Qualification Submission the Participant or its Guarantor (if

applicable) is required to provide the Tender Committee with the relevant financial

data in order to demonstrate compliance with the Financial Pre-Qualification

Requirements. The Participant is a private foreign company, and its financial data is

confidential information which cannot be disclosed to other Participants. Therefore, the

Tender Committee is kindly requested to clearly state that financial data submitted in

the Pre-Qualification shall not be disclosed to other Participants, and accordingly add

Sub-Section 8.7.1.3, as follows: "The Financial Forms submitted by a Participant (i.e.,

Forms J1, J2, J3, K and L)".

8.7

A: Please refer to Sections 7.7 and 8.7 of the Invitation for Pre-Qualification.

46. Q: We ask the Tender Committee to amend the definition of the term “Country With

Which Israel Has No Diplomatic Relations” to be “A country designated as an enemy

country under the Trading with the Enemy Ordinance, 1939”.

Annex 1;

Section

1.22


23

A: Section 3.6 of the Invitation for Pre-Qualification and Sections 1.23 and 1.51 of Annex

1 of the Invitation will be amended as follows. In addition, all relevant Pre-

Qualification Forms will be amended accordingly.

3.6 Absence of Connection to Countries With Which Israel Has No Diplomatic

Relations a State Which Does Not Have Diplomatic Relations With the State

of Israel

3.6.1 A Participant, each A Participating Entity and each Controlling

Shareholder, director, and Position Holder of the Participant and/or of any

Participating Entity may not be a citizen or a resident of a Country With

Which Israel Has No Diplomatic Relations, or a corporation that is

incorporated in such a country any Interested Party including the office

holders thereof involved in the Pre-Qualification Process, in the Tender

Process or in the Sale Process (including individuals) are not residents or

citizens of a state which does not have diplomatic relations with the State

of Israel.

3.6.2 In this regard, in the case of a Participant or a Participating Entity that is a

Private Investment Fund, the compliance of the general partner/the

managing Entity of the fund and each of its Principals with the condition

set forth above will be examined (without examining the limited

partners/the investors in the fund).

3.6.3 The attention of the Participants is directed to the applicability of the

provisions of the Trading with the Enemy Act 1939, the Law on the

Struggle Against Iran's Nuclear Program, 2012 and the Prevention of

Distribution and Financing of Weapons of Mass Destruction Law, 2018,

to each Participating Entity.

1.23 "Country With Which Israel Has No Diplomatic Relations" – One of the

countries with which Israel has no diplomatic relations, as set forth in the

“Notice of Countries With Which Israel Has No Diplomatic Relations, or

Agreement Including a ‘Most Preferred Nation’ Section or Which Limit the

Import of Goods from Israel” pursuant to the Free Import Ordinance, 5738-1978.

1.51 "Interested Parties Party" – As this term is defined in the Securities Law, 5728-

1986 Shall mean with respect to Entity1: (a) any Entity or individual directly

holding at least 15% of any of the Means of Control of Entity1 (in this definition:

"Entity2"); (b) any Entity or individual Holding at least 70% of any of the Means

of Control of Entity2; (c) the CEO of Entity1; or (d) any of the directors of

Entity1.


24

47. Q: The Tender Committee is requested to include in the definition of “Institutional

Entity”, in addition, entities that are listed in Section 4 of the First Addendum to the

Securities Law, as well as “institution of higher education”. It should be noted that after

receiving requests from participants, the said broader definition was adopted by the

State of Israel in the PQ stage of the Jerusalem Green Line light rail project.

Therefore, the Tender Committee is kindly requested to amend Section 1.51 as follows:

"Institutional Entity" – This refers to (i) any of the entities that are listed in Sections

1-34 of the First Addendum to the Securities Law; in the case of foreign entities –

entities that are similar to them, pursuant to the relevant Law in their country of

incorporation; and/or (ii) any of the entities recognized as an “institution of higher

education” in accordance with the Council for Higher Education Law, 1958; in the case

of foreign entities – entities that are similar to them, pursuant to the relevant Law in

their country of incorporation.

Annex 1;

Section

1.51


Section 1.51 of Annex 1 of the Invitation for Pre-Qualification will be amended as

follows:

""Institutional Entity" – This refers to any of the entities that are listed in Sections 1-

31-4 of the First Addendum to the Securities Law; in the case of foreign entities –

entities that are similar to them, pursuant to the relevant Law in their country of

incorporation."

48. Q: Please add an additional threshold for the scoring criterion on respect of Equity. The

current mechanism does not proportionately compensate financially robust Entities.

Appe-

ndix 3


49. Q: The Tender Committee is kindly requested to clarify that the points allocation for

experience in financial close is accumulative, such that an Infrastructure Project under

sub-section (b) will be granted 14 points (instead of 7), and an Infrastructure Project

under sub-section (c) shall be granted 21 points (instead of 7).

Appe-

ndix 3


50. Q: Please clarify that a Member may rely on the Equity of a Guarantor for purposes of the

financial robustness ranking criteria.

Appe-

ndix 3

A: Without derogating from the provisions of the Invitation for Pre-Qualification, it is

hereby clarified that all the provisions regarding the demonstration of compliance with

Pre-Qualification Requirements shall apply also regarding the Ranking Process.

51. Q: Please clarify that a Participant may rely on an Experience Provider for purposes of the

professional experience ranking criteria.

Appe-

ndix 3



25

52. Q: The Tender Committee is asked to confirm that if the Participant (which is not a

Group) has not been incorporated on the Pre-Qualification Submission Date (in

accordance with Section 3.2), then information pertaining to the Participant in this form

is to be left blank.

PQ Form

A

A: The Request for Clarification is not clear. Without derogating from the foregoing, it is

hereby clarified that a Participant, which is a single Entity (i.e., not a Group), must be

incorporated on the Pre-Qualification Submission Date.

53. Q: 1. Please adjust the numbering of the first two sections of PQ Form B.

2. The Tender Committee is asked to confirm that if the Participant (which is not a

Group) has not been incorporated on the Pre-Qualification Submission Date, then

information pertaining to the Participant in this form is to be left blank.

PQ Form

B


1. Regarding section (1) of the request above – the Tender Committee accepts the

request. Pre-Qualification Form B will be amended accordingly.

2. Regarding section (2) of the request above – please refer to Section 52 above.

54. Q: Please clarify what are "minutes of incorporation" and whether a certificate of

incorporation or equivalent in other domicile should suffice.

PQ

Forms B-

E,

Section 2 A: It is hereby clarified that the relevant Participating Entity shall submit under Pre-

Qualification Forms B-E its documents of incorporation, including certificates of

incorporation and name change certificates, as applicable.

Section 2 of Pre-Qualification Forms B-E will be amended as follows:

"Attached hereto are authenticated copies of the Participant's certificate of

incorporation and minutes of incorporation name change certificates, as applicable, or

their equivalent within its domicile."

55. Q: The Tender Committee is asked to confirm that if a Member is a limited partnership,

this section shall be left blank.

PQ Form

C,

Section 7 A: The Tender Committee so approves.

56. Q: Please clarify that if a Participant consists of one Entity, then only the Member should

submit Pre-Qualification Form "C".

PQ Form

C

A: It is hereby clarified that where the Participant is a single Entity, it shall submit Pre-

Qualification Form C, duly completed and signed by it.

57. Q: The Tender Committee is asked to confirm that if a Related Entity is a limited

partnership, this section shall be left blank.

PQ Form

D,

Section 8 A: The Tender Committee so approves.


26

58. Q: As Section 3.6 of the Invitation makes clear, it is the intention of the Tender

Committee to ensure that no individual or entity with the ability to control the conduct

of the Participant or a Participating Entity shall be a resident or citizen of a Country

With Which Israel Has No Diplomatic Relations. It is for this reason that Sub-Section

3.6.2 specifically disregards the identity of limited partners or investors in a Private

Investment Fund.

In contrast, various Tender Forms refer to “Interested Parties” which is defined in Pre-

Qualification Documents as being a baal inyan according the Securities Law, 5728-

1968. This definition also includes entities passively holding 5% of the share capital of

a company and without any Control of the company; and not just those individuals and

entities referred to in Section 3.6 of the Invitation.

Therefore, the Tender Committee is asked to align Section 11.3 of Pre-Qualification

Forms C and D, and Section 11.4 of Pre-Qualification Forms E so that the words

“Interested Parties” be replaced with “each Controlling Shareholder, director and

Position Holder….” (as stated in Section 3.6 of the Invitation). This amendment will

ensure not only that the requirements of the Pre-Qualification are aligned but that

publicly traded Participating Entity will not be required to make representations to the

Tender Committee about their shareholders holding 5% of their publicly traded shares

without any Means of Control in the Participating Entity. As these shares are publicly

traded, it is impossible for the Participating Entity to undertake any diligence at all with

respect to such passive shareholders, whose identity can change at any time when

shares are freely traded.

PQ

Forms C

and D;


59. Q: The Tender Committee is asked to confirm that if the Participant (which is not a

Group) has not been incorporated on the Pre-Qualification Submission Date, then PQ

Form F shall be submitted only by the Member(s) while information pertaining to the

Participant will be left blank.

PQ Form

F


60. Q: The Tender Committee is kindly requested to amend a typo in the Form I4 such that its

heading will be "Pre-Qualification Form I4 – Experience in Financial Close" (instead of

"Form I3").

PQ Form

I4

A: The Tender Committee accepts the request. Pre-Qualification Form I4 of the Invitation

for Pre-Qualification will be amended accordingly.


27

61. Q: We kindly request the following changes to Pre-Qualification Form "K":

The form requires the auditor to confirm the figures of the Financial Statements

in NIS where such Financial Statements were denominated in a different

currency, while the form itself does not allow any explanation in respect to

how the conversion is to take place, Accordingly, for companies of which

accounts are not in NIS please change the form to "amount of _________

thousand [original currency] multiplied by currency exchange provided the

company of _________ resulting in an amount of _________ thousand NIS".

Furthermore, Section 5 requires that the auditor will state that it received a

report from the management of the Corporation with respect to the results of its

activity since the Audited Financial Statements. As there are no such reporting

procedures defined under the Hong Kong standards on quality control,

auditing, assurance and related services the auditor will not be able to provide

such a statement. It further seems that Section 6 already covers the same

purpose. Accordingly, please delete Section 5 and the reference to Section 5 in

Section 6.

PQ Form

K,

Section

3, 5, 6


The amended Pre-Qualification Form K is attached hereto as Attachment 1.

62. Q: As part of the Alon Tavor Pre-Qualification process the Participant has submitted a

financial robustness auditors certificate which wording was approved by the Tender

Committee ("Amended Certificate"). The Amended Certificate is similar to Form K,

except for the following (marked in track changes): (i) it does not state "To whom it

may concern"; (ii) "As the auditors of _________ (hereinafter the "Corporation"), and

subsidiaries, and at the Corporation's request, we hereby state the following:"; (iii) "We

have not audited any financial statements of the Corporation since our audit of the

Financial Statements financial statements as of the year of December 31, 2018.

The Tender is kindly requested that the Participant will be entitled to file as Form K, a

certificate which is identical to the Amended Certificate format which shall include the

relevant financial data.

PQ Form

K


Please refer to the amended Pre-Qualification Form K, attached hereto as Attachment

1.

63. Q: The Tender Committee is kindly requested to approve that: (i) a Participant/Member

that does not have financial statements because it was formed during 2019 (however

prior to July 2019), and intends to rely on a Guarantor, is not required to submit Form

K (i.e., Form K will only be submitted by the Guarantor); (ii) in case the

Participant/Member is not a Financial Entity nor a Private Investment Fund, then

Sections 3.4 and 3.5 may be omitted from the Auditor Certification.

PQ Form

K


28


1. Regarding section (i) of the request above – The Tender Committee rejects the

request.

2. Regarding section (ii) of the request above – The Tender Committee so

approves.

64. Q: As the Letter of Guarantee is intended to endorse the participation of the respective

Member for which the Letter of Guarantee is provided, In the Pre-Qualification Process

by the respective Guarantor and not to endorse the entire Group's Pre-Qualification

Submission, we request that the referenced representations and declarations correspond

to the respective Member rather than the Participant.

Please see suggested wording below (changes are underlined):

"We declare that we have examined the representations and declarations that are

included in the Company's Participant's Pre-Qualification Submission, and that we

have examined the provisions of the Invitation that imposed limitations and direct

duties upon the Guarantor, and we take the referenced conditions, and especially the

powers that are conferred in those provisions upon IEC, upon ourselves, and declare

that each of the referenced representations and declarations should be viewed as if

they had been given by the Company Participant and the Guarantor, jointly and

severally."

PQ Form

L,

Section

2.4


Section 2.4 of Pre-Qualification Form L will be amended as follows:

"We declare that we have examined the relevant representations and declarations that

are included in the Participant’s Pre-Qualification Submission, and that we have

examined the provisions of the Invitation that imposed limitations and direct duties

upon the Guarantor, and we take the referenced conditions, and especially the powers

that are conferred in those provisions upon IEC, upon ourselves, and declare that each

of the referenced representations and declarations should be viewed as if they had been

given by the Company Participant and the Guarantor, jointly and severally."


29

65. Q: The language of the undertaking in Section 2.5 which applies also to the "Sale Process"

seems rather excessive in relation to a pre-qualification stage, where the Tender

Documents, and the undertakings and obligations of the Successful Bidder thereunder

have not been published yet. The existing language of this undertaking expands beyond

any of the obligations of the Participant and/or Member at this stage, which is

obviously not reasonable, and we are confident that this was not the intention of the

Tender Committee.

Regardless of the stage of the tender process, it should be noted that it does not seem

reasonable for the Guarantor to assume all undertakings of the Participant under the

future Sale Agreement as this would defy reasonable risk allocation standards and deter

large multinational companies from participating in these types of competitive

processes.

Accordingly, we kindly request the Tender Committee to replace Section 2.5 with a

reasonable commitment appropriate for the Pre-Qualification Stage. Please see below a

suggested provision (which is based on an example from the sea-water desalination

pre-qualification processes):

"In the event the Tender Committee determines that the Pre-Qualification Submission

submitted by the Participant complied with the Participant, it Members, Related

Entities and Major Subcontractors demonstrated compliance with the Pre-

Qualification Requirements, and the Participant will be announced Eligible

Participant and invited to submit a bid in accordance with the provisions of the Tender

Documents, the Guarantor hereby undertakes to issue the Tender Committee, within

the bid to be submitted by the Participant, with the Guarantor's undertaking that shall

be detailed under the Tender Documents".

PQ Form

L,

Section

2.5


66. Q: There is no question that, as far as the Pre-Qualification Process is concerned, a

Guarantor may not and must not engage with the advisors of the Tender Committee

listed in Appendix 5. However Section 2.1.3 of the PQ Form L is so broadly drafted as

to prohibit the Guarantor from continuing to work with advisors with whom it has a

long term relationship on other matters. The Tender Committee is requested to align

this PQ Form with other PQ Forms (such as Section 11.8 to PQ Form C) where the

words “for the purposes of the Pre-Qualification Process” are added.

PQ Form

L,

Section

2.13

A: The Tender Committee accepts the request. Section 2.13 of Pre-Qualification Form L

will be amended as follows:

"We do not employ or engage with any of the Advisors to the Tender Committee listed

in Appendix 5 to the Invitation, for the purposes of the Pre-Qualification Process;"


30

Attachment 1

Pre-Qualification Form K – Financial Robustness – Auditor Certification

[To be completed and signed by the Participant’s auditor. In cases the Participant is a group, the form will be completed

and signed separately by the auditor of each of the Members. In cases involving reliance on a Guarantor, the form will

also be completed and signed by the auditor of the Guarantor. The form will be completed pursuant to the provisions of

Section 5.8.4 of the Invitation]

[This form may be completed on the accountant’s letterhead]

To whom it may concern,

Re: Financial Data of

As the auditors of __________________ (hereinafter: the “Corporation”), and subsidiaries, and at

the Corporation's request, we hereby state the following:

1. We have been the auditors of the Corporation since the year _________.

2. The audited [consolidated] financial statements of the Corporation (hereinafter: "Audited

Financial Statements") as of the years 2016, 2017 and 2018 were audited by our firm.

Financial data

3. The following financial data was obtained from the Audited Financial Statements:

3.1. Pursuant to the Audited Financial Statements, the Equity of the Corporation for its most

recent annual or quarterly Financial Statements totals the amount of _______ thousand

NIS.

3.2. Pursuant to the Audited Financial Statements, the turnover of the Corporation for the

years ended on December 31, 2016, 2017 and 2018 totals the amount of _______

thousand NIS, _______ thousand NIS and _______ thousand NIS, respectively.

3.3. Pursuant to the Audited Financial Statements, the operating cash flow of the

Corporation for the years ended on December 31, 2016, 2017 and 2018 totals the

amount of _______ thousand NIS, _______ thousand NIS and _______ thousand NIS

respectively.

3.4. If the Corporation is a “Financial Entity,” as this term is defined in the Invitation for

Pre-Qualification–

Pursuant to the Audited Financial Statements, the amount of its managed assets for the

year 2018 totals the amount of ______ thousand NIS.

3.5. If the Corporation is a “Private Investment Fund”, as this term is defined in the

Invitation for Pre-Qualification –

Pursuant to the Audited Financial Statements, the Assets Under Management of the

Corporation for the year 2018 totals the amount of _______ thousand NIS.


31

4. No “Going Concern Notice” was included in the Audited Financial Statements for the years of

2016, 2017 and 2018.

5. We have received a report from the management of the Corporation with respect to the results

of its activity since the Audited Financial Statements, and we have held a discussion on the

subject of the “Going Concern Notice” with the management of the Corporation. We have

performed procedures for identifying subsequent events, and we have held a discussion on the

subject of the “Going Concern Notice” with the management of the Corporation.

6. Starting on the signing date of the above-referenced financial statements and up to the date on

which we are signing this letter, no information on any substantive change for the worse in the

business situation of the Corporation, to the point of raising real doubts with respect to the

continued existence of the Corporation as a “Going Concern Notice” has come to our attention,

including on the basis of the examinations as set forth in Section 5 above and of trial balances

that were prepared for the Corporation (if any trial balances were prepared during the

referenced period of time).

7. We have not audited any financial statements of the Corporation since our audit of the

Financial Statements financial statements as of the year of December 31, 2018.

8. In order to obtain an understanding of the Corporation’s financial position, the Corporation’s

consolidated financial statements, including the related notes thereto, need to be read in their

entirety due to the interrelationship between the individual amounts, disclosures, and other

components of the Corporation’s consolidated financial statements.

9. All denominations in this form are converted to NIS in accordance with the conversion rates

and provisions of section 5.9 of the Invitation for Pre-Qualification.

___________________

Date

_______________________

Signature and stamp

of the auditor of the Corporation


32

Acknowledgment of Receipt

To: Mr. Amir Livne, VP

Head of strategy and restructure process

Tender Committee

The Israel Electric Company Ltd.

Email: [email protected]

Re: Invitation for Pre-Qualification – Ramat Hovav Transferred Facilities

Addendum No. 4

Pursuant to the provisions of Section 2.15.4 of the Invitation for Pre-Qualification, we hereby

acknowledge receipt of Addendum No. 4.

___________________________________ __________________________________

Name of the Participant Name and signature of the Participant's

Authorized Representative