republic of peru regional government of la libertad ...€¦ · of la libertad private investment...

REPUBLIC OF PERU

REGIONAL GOVERNMENT

OF LA LIBERTAD

PRIVATE INVESTMENT PROMOTION PROCESS OF THE CHAVIMOCHIC PROJECT

BIDDING TERMS

COMPREHENSIVE PROJECT BID

FOR THE CONCESSION OF MAJOR HYDRAULIC WORKS OF THE

CHAVIMOCHIC PROJECT

PRIVATE INVESTMENT PROMOTION AGENCY

PRO INTEGRACIÓN COMMITTEE OF PROINVERSIÓN

MARCH 2013

These Bidding Terms have been prepared in coordination with the Regional Government of La Libertad pursuant to the Technical Assistance Agreement, under the commission mode, subscribed between the Regional Government and PROINVERSIÓN.

Important: This is an unofficial translation. In case of divergence between the English and Spanish text, the version in Spanish shall prevail.

REGIONAL GOVERNMENT

OF LA LIBERTAD

Comprehensive Project Bid for the Concession of Major Hydraulic Works of the Chavimochic Project. 2

CONTENTS

1. OBJECTIVE AND CHARACTERISTICS OF THE PUBLIC BID ... ................................... 7

1.1 CALL AND OBJECTIVE OF THE PUBLIC BID .............. ................................................ 7

1.2 Definitions ....................................... ..................................................................... 10

1.3 Legal framework and background .................... .................................................. 26

1.4 Powers of the Committee and PROINVERSION .......... ....................................... 30

1.5 Concession Contract ............................... ............................................................ 31

1.6 Bid Schedule ...................................... .................................................................. 31

2. AUTHORIZED AGENTS AND LEGAL REPRESENTATIVE ........ ................................. 33

2.1 AUTHORIZED AGENTS ................................. .............................................................. 33

2.1.1 Designation of Authorized Agents .......................................................................... 33

2.1.2 Letter of designation ............................................................................................... 33

2.1.3 Powers granted ....................................................................................................... 33

2.1.4 Information ............................................................................................................ 34

2.1.5 Notifications .......................................................................................................... 34

2.1.6 Replacement........................................................................................................... 34

2.2 Legal Representative .............................. ............................................................. 34

2.2.1 Appointment and powers ........................................................................................ 34

2.2.2 Submission of the power of attorney ....................................................................... 35

2.2.3 Place where the power of attorney is granted ........................................................... 35

2.2.4 Registration in the Register Office .......................................................................... 36

3. INQUIRIES AND INFORMATION.......................... ........................................................ 36

3.1 Inquiries on the Bidding Terms and suggestions to t he Draft Contract. .......... 36

3.1.1 Deadline for Inquiries and suggestions .................................................................... 36

3.1.3 Circular Letters ...................................................................................................... 37

3.2 Access to Information - Data Room ................. ................................................... 37

3.3 Non-disclosure Agreement .......................... ....................................................... 38

3.4 Request for interviews............................. ............................................................ 38

3.5 Limitations of Liability ......................... ............................................................... 38

3.5.1 Independent decision of the Bidders ........................................................................ 38

3.5.2 Limitation of liabilities ........................................................................................... 39

3.5.3 Scope of the Limitation of Liability ........................................................................ 39

3.5.4 Acceptance by the Qualified Bidder of provisions in Section 3.5 ............................. 39

4. SUBMISSION OF ENVELOPES NO.1, NO. 2 AND NO. 3 ..... ........................................ 40

4.1 Submission ........................................ .................................................................. 40

4.1.1 Submission of Envelope No. 1 ................................................................................ 40

4.1.2 Submission of Envelopes No. 2 and No. 3 ............................................................... 40

4.1.3 Opening of Envelope No. 3..................................................................................... 40

4.1.4 Submission of Envelopes by Authorized Agent or Legal Representative .................. 40

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4.2 Language .......................................... ................................................................... 41

4.3 Original Documents and Copies ..................... .................................................... 41

4.4 Method for Submission of Envelopes No. 1, No. 2 and No.3 ............................. 41

4.5 Cost of Preparation and Submission ................ .................................................. 41

4.6 Fee for Right to Participate ...................... ........................................................... 42

5.1 Overview .......................................... .................................................................... 42

5.2 Bidder short-listing requirements regarding technic al expertise ...................... 43

5.3 Legal requirements ................................ .............................................................. 45

5.4 Financial Requirements ............................ ........................................................... 48

5.5 Verification of information submitted to the Commit tee .................................... 49

6. SUBMISSION OF ENVELOPE NO.1 AND SHORT-LISTING RESUL TS ....................... 50

6.1 Submission of Envelope No. 1 ...................... ...................................................... 50

6.1.1 Notification and remedy of observations to Envelope No. 1..................................... 50

6.1.2 Announcement of Short-listed Bidders .................................................................... 50

6.1.3 Inclusion of new Members to a Qualified Bidder .......................................................... 51

7. CONTENTS OF ENVELOPES NO. 2 AND NO. 3 ............. ............................................. 52

7.1 Contents of Envelope No. 2 ........................ ......................................................... 52

7.1.1 Affidavit Statement .................................................................................................. 52

7.1.2 Contract ................................................................................................................. 52

7.1.3 Guarantee of Validity, Validity Term and Seriousness of the Economic Proposal .... 52

7.1.4 Technical Proposal ................................................................................................. 53

7.2 Contents of Envelope No. 3: Economic Proposal ..... ......................................... 55

8. RECEPTION OF ENVELOPES NO. 2 AND NO. 3, OPENING AND EVALUATION OF ENVELOPE NO. 2 ................................................................................................................ 55

8.1 Reception of Envelopes No.2 and No. 3 and Opening o f Envelope No. 2 ......... 55

8.2 Content of the Evaluation of Envelope No. 2 ....... ............................................... 56

9. OPENING OF ENVELOPE NO. 3 AND CONTRACT AWARD ...... ................................ 58

9.1 Opening and Evaluation of Envelope No. 3 .......... .............................................. 58

9.2 Challenge ......................................... .................................................................... 59

9.3 Challenge Bond .................................... ............................................................... 60

9.4 Bidding Process declared void ..................... ...................................................... 61

9.5 Suspension ........................................ .................................................................. 61

10. CLOSING PROCEDURE .............................................................................................. 61

10.1 CLOSING DATE ...................................... ..................................................................... 61

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10.2 CLOSING PROCEDURE .............................................................................................. 61

10.2.1 THE SUCCESSFUL BIDDER SHALL DELIVER THE FOLLOWING D OCUMENTS ON THE CLOSING DATE: .............................. ..................................................................... 61

10.3 ENFORCEMENT OF THE GUARANTEE OF VALIDITY, VALIDITY TERM AND SERIOUSNESS OF THE ECONOMIC PROPOSAL .............. ............................................... 64

10.4 ENTRY INTO FORCE OF THE CONCESSION CONTRACT ......................................... 64

11. FINAL PROVISIONS .................................. .................................................................. 65

11.1 Applicable Laws ................................... ................................................................ 65

11.2 Jurisdiction and competence ....................... ....................................................... 65

11.3 Contribution to FONCEPRI .......................... ........................................................ 65

11.4 Environment........................................ ................................................................. 65

11.5 Expense reimbursement of the Process............... .............................................. 66

11.6 Preliminary report of the General Comptroller of th e Republic ......................... 66

ANNEX NO. 1 ...................................................................................................................... 67

CONFIDENTIALITY AGREEMENT ......................... ............................................................. 67

ANNEX NO. 2 ...................................................................................................................... 69

SAMPLE OF PERFORMANCE BOND ........................ ......................................................... 69

ANNEX NO. 2 ...................................................................................................................... 71

APPENDIX 1 ........................................................................................................................ 71

LIST OF INTERNATIONAL FINANCIAL INSTITUTIONS AUTHOR IZED TO ISSUE GUARANTEES ESTABLISHED IN THE BIDDING CONDITIONS .. ...................................... 71

APPENDIX 2 ........................................................................................................................ 72

LIST OF LOCAL BANKS AUTHORIZED TO ISSUE GUARANTEES ESTABLISHED IN THE BIDDING CONDITIONS ................................ ....................................................................... 72

ANNEX NO. 3 ...................................................................................................................... 73

FORM 1 73

AFFIDAVIT ......................................... ................................................................................. 73

(LETTER OF COMMITMENT TO SUBMIT RELIABLE INFORMATIO N) .............................. 73

FORM 2 74

TECHNICAL REQUIREMENTS FOR THE QUALIFICATION ...... ......................................... 74

FORM 3 76

TECHNICAL REQUIREMENTS FOR THE QUALIFICATION ...... ......................................... 76

ANNEX NO. 4 ...................................................................................................................... 78

CREDENTIALS FOR QUALIFICATION ..................... .......................................................... 78

FORM 1 78


FORM 2 79

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AFFIDAVIT ......................................... ................................................................................. 79


FORM 3 81

AFFIDAVIT ......................................... ................................................................................. 81

FORM 4 82

AFFIDAVIT ......................................... ................................................................................. 82


FORM 5 83

AFFIDAVIT ......................................... ................................................................................. 83

FORM 6 84

AFFIDAVIT ......................................... ................................................................................. 84

FORM 7 85

AFFIDAVIT ......................................... ................................................................................. 85

FORM 8 86

AFFIDAVIT ......................................... ................................................................................. 86

ANNEX NO. 5 ...................................................................................................................... 87

FORM 1 87

LETTER OF INTENT TO INCOPORATE A LEGAL ENTITY ..... ........................................... 87

FORM 2 89

FINANCIAL REQUIREMENTS – ENVELOPE NO. 1 ........... ................................................. 89

FORM 3 92

SAMPLE OF THE BID BOND ............................ .................................................................. 92

FORM 4 94

VALIDITY OF THE INFORMATION........................ .............................................................. 94

FORM 5 95

LETTER OF COMMITMENT TO HIRE THE CONSTRUCTOR ...... ....................................... 95

FORM 6 97

STATEMENTS OF THE CONSTRUCTOR TO BE INCLUDED IN THE CONSTRUCTION CONTRACT ......................................................................................................................... 97

ANNEX NO. 6 .................................................................................................................... 100

ENVELOPE 3: SAMPLE OF COVER LETTER FOR FINANCIAL PR OPOSAL .................. 100

ANNEX NO. 7 .................................................................................................................... 102

SAMPLE OF BANK GUARANTEE IN CASE THE SUCCESSFUL BID IS CHALLENGED . 102

ANNEX NO. 8 .................................................................................................................... 104

DATA ROOM USER GUIDE............................... ................................................................ 104

FORM 1 106

IDENTIFICATION OF THE PEOPLE AUTHORIZED TO USE THE DATA ROOM .............. 106

FORM 1 – APPENDIX 1 ..................................................................................................... 107

REGIONAL GOVERNMENT

OF LA LIBERTAD


DATA AND CONTINUANCE CHART ........................ ......................................................... 107

2.1 BRIEF DESCRIPTION OF THE CHAVIMOCHIC PROJECT ...... ................................. 108

2.2 CHAVIMOCHIC PROJECT DEVELOPMENT IN STAGES ......... ................................. 109

2.3 FAVORED AGRICULTURAL AREAS......................... ................................................ 110

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1. OBJECTIVE AND CHARACTERISTICS OF THE PUBLIC BID

1.1 Call and Objective of the Public Bid 1.1.1. The State of the Republic of Peru, represented by the Regional

Government of La Libertad and acting through the Private Investment Promotion Agency - PROINVERSION pursuant to the Technical Assistance Agreement under the commission mode in force, has called a Comprehensive Projects Bid to grant in concession of the "Major Hydraulic Works of the Chavimochic Project” to the private sector.

The technical and economic guidelines of the Concessionaire's obligations are contained in Annex No. 9 - Terms of Reference of these Bidding Terms. According to the Concession Contract scheme, the Concessionaire's obligations will be distributed in two (2) parallel execution Phases:

i) A First Phase whose works are funded entirely with Co-financing

and which further comprise operation and maintenance activities of the New Works of the First Phase, and

ii) A Second Phase whose works financing is the Concessionaire’s

responsibility and which further comprise operation and maintenance activities of the New Works of the Second Phase and Existing Works.

The description of the Concessionaire’s commitments in the First Phase and the Second Phase are described in Annex No. 9 - Terms of Reference.

1.1.2. For the purposes of this Concession a term of twenty-five (25) years has been adopted, considering the following periods: Initial Period (up to one year) Construction Period (up to four years) and Operation Period (for the remaining period until the end of the concession period).

The detail of the Initial Period, Construction Period and Operation Period is shown in Annex No. 9 - Terms of Reference.

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1.1.3. The revenue of the concession to be regulated in the Concession Contract will serve as support for the recovery of the Concessionaire’s contributions. Such income shall be the product of charging a fee for the provision of water supply services to users of the Chavimochic Project.

Under the income for the Service that shall be deposited in the Trust, the Concessionaire shall receive an Annual Compensation for Investment (RPI) applicable to the recovery of the Second Phase investments and an Annual Compensation for Operation and Maintenance (RPMO) from the Works of the Project.

1.1.4. During the Period of Operation, the operation of the project and the

provision of the Service, when it is not exercised directly by the Concessionaire, it may be exercised by an operator hired for that purpose by the Concessionaire, or after the Post-Construction period has elapsed, it may be carried out by another qualified investor, whom via transfer of shares, partially or fully acquires the rights and obligations of the concession company.

1.1.5. Competitive factors for awarding the project are the amounts proposed by the Bidders in respect of RPI, RPMO and Co-financing. In this regard, the Economic Proposal will be structured using the normalization and weighting formula of such factors as detailed in Section 1.2.68.

1.1.6. For the purposes of the concession, the Grantor shall deliver to the Concessionaire, assigned for use and without charge, the major existing water infrastructure corresponding to the first and second stage of the Chavimochic Project, except for the existing lateral channels that make up the Project’s secondary distribution system.

1.1.7. The Concessionaire shall ensure the conveyance and delivery of the minimum annual volume of water that ensures the provision of service to all users of the Service.

1.1.8. The Concessionaire will ensure the delivery of water in bulk to the

Special Chavimochic Project for its distribution to the Consumers' Board of the Chao, Virú, Moche and Chicama valleys, according to the annual volume, points and rate of delivery determined by the Special Project in coordination with the National Water Authority.

At the conclusion of the Concession, including contract renewals, the Project Works will be delivered to the Regional Government of La Libertad, which, prior public bid shall award them a new concessionaire, so as to ensure the continued operation of the system, including the provision of service related to conveyance and delivery of irrigation water to the users to the project.

1.1.9. New Works, including their ancillary works will be built on land owned

and registered to the Chavimochic Special Project, an organization

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under the Regional Government of La Libertad. These lands will be made available to the Concessionaire for the term of the Concession.

The land to be auctioned for agricultural uses, to which the Concessionaire will provide conveyance and delivery of water service for irrigation purposes, shall remain under the control and custody of the Regional Government of La Libertad.

1.1.10. The basic reference for the formulation of the Bidders’ Technical Proposal is the Feasibility Study and additional studies available. The Bidder has ample freedom to present its proposal with the technological adaptations and updates as it deems appropriate, provided such adjustments are appropriate to the minimum specifications contained in the Terms of Reference (Annex No. 9) and do not undermine the potential development of the Chavimochic Project, according to what is described in the aforementioned studies.

1.1.11. In the structure of the concession scheme, the following economic and

financial indicators are considered:

a) Referential Investment Amount The Referential Investment Amount is that established in Section

1.2.60. b) Co-financing, RPI, RPMO and Sovereign Guarantee of the State

The financial structure of the concession includes a State Co-financing amount and recognition of payment for RPI and RPMO, in accordance with the scale of investment by the Concessionaire and grant scheme characteristics. Co-financing will be used to cover in full the financial requirements of the First Phase.

Under the income for the Service that shall be deposited in the Trust, the Concessionaire shall receive an Annual Compensation for Investment (RPI) exclusively applicable to the recovery of the Second Phase investments and an Annual Compensation for Operation and Maintenance (RPMO) from the Works of the Project, applicable to both the First Phase and the Second Phase. The trustee will pay the RPMO in the first place and the RPI in the second place. It is envisaged that the RPI payment is guaranteed by the National Government Sovereign Guarantee, which will be subject to the approval of the financial scheme of the Concession.

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Co-financing, RPI, RPMO and Sovereign Guarantee definitions are contained in Section 1.2 "Definitions" of these Bidding terms.

c) Concessionaire’s Contributions

The Concessionaire’s contributions shall exclusively apply to financing the construction of the Second Phase New Works. These contributions will be covered through their own contribution and indebtedness from authorized creditors. The Concessionaire’s contributions, including debt, will be exclusively recovered with the RPI payment.

1.1.12. It is considered, notwithstanding any evidence to the contrary, that all Acquirers, Bidders, Qualified Bidders, Successful Bidder or person, who directly or indirectly participates in this Bid, knows the contents of these Bidding Terms and Applicable Laws.

1.1.13. The Public Bid process referred to in these Bidding Terms shall be

carried out according to the provisions contained in the Bidding Terms, and in matters not covered by them, the rules of Legislative Decree No. 1012, Supreme Decree No. 059 -96-PCM shall apply, as well as its related legislation, regulations and amendments.

1.1.14. Under the First Transitional Supplementary Provision of Legislative

Decree No. 1017 - State Procurement Law and COPRI Agreement No. 355-2001, the rules contained in the said provision are not applicable to this Public Bid.

1.2 Definitions

All references herein to "Section", "Form" and "Annex" shall be understood as made to the sections, forms and annexes of these Bidding Terms, respectively, unless otherwise stated in a different sense.

The expressions in the singular include where appropriate, the plural and vice versa. The capitalized terms contained in these Terms and which are not specifically defined therein, correspond to Applicable Laws, or terms defined in the Contract, or the meaning given to them in the use of project development activities or, failing that, to terms that are commonly used in uppercase. All time references should be construed as local time in Peru.

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In these Bidding Terms the following terms shall have the meanings indicated:

1.2.1 Confidentiality Agreement: The agreement that the Acquirers must sign through their Legal Representative or Authorized Agents before making use of the Data Room. The format of the Confidentiality Agreement text is attached as Annex No. 1.

1.2.2 Project Award: This is the statement made by the Committee

determining the Economic Proposal that was awarded the project.

1.2.3 Successful Bidder: The Bidder favored with the Contract Award.

1.2.4 Acquirer: The legal entity that pays the Right of Participation in the Public Bid. In case of a Consortium, it will suffice if one of their members has paid the Right of Participation.

1.2.5 Private Investment Promotion Agency - PROINVE RSIÓN: The Decentralized public Institution attached to the Economy and Finance sector referred to under Law No. 28660 and Supreme Decree No. 027-2002-PCM, as amended by Supreme Decree No. 095-2003 - EF responsible, among other functions, to promote private investment in infrastructure and public services that can be granted in concession to the private sector in accordance with Applicable Laws.

1.2.6 Authorized Agents: They are natural persons appointed as such by the Acquirer or Qualified Bidder, as appropriate.

1.2.7 Technical Advisor: The Chavimochic III Consortium that is responsible for updating and complementation of studies of the following aspects: i) hydrology and water clearance of the Chavimochic Project, ii) technical solutions, designs and referential costs of New Works, iii) assessment of the state of Existing Works, iv) quantification of operation and maintenance activities applicable to major waterworks project, among others.

1.2.8 Transaction Advisor: The Chavimochic III Consortium that is responsible for the consolidation of the Project’s costs and financial structuring of the Concession, and currently advising PROINVERSION in the Public Bid process.

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1.2.9 Governmental Authority: any government or national, regional, departmental, provincial or municipal authority, or any of its departments or agencies, regulatory or administrative, or any entity or agency of Peru that exercises under law executive, legislative or judicial powers, or belonging to any of the governments, authorities or institutions mentioned above, with jurisdiction over persons or matters in question.

1.2.10 Bidding Terms: This document, including its Forms, Annexes, Appendices and Circular Letters issued by the Committee, setting the terms under which they will develop the Public Bid and the Concession.

1.2.11 Concession Assets: The set of property and rights which

administration and economic exploitation are delivered to the Concessionaire, or acquired by it during the term of the Concession. Such assets include New Works and Existing Works.

1.2.12 Work Schedule: Chronological sequence of the different Phases of

the Concession, activities and work fronts in which the Bidder organizes and develops the General Work Plan.

1.2.13 Circular Letters: These are all directives or regulations issued in

writing by the Committee, whether with specific or general purposes, in order to complete, clarify, interpret or modify the contents of these Bidding Terms, another Circular Letter or answer inquiries made by those who are authorized to do so under these Bidding Terms. These Circular Letters shall be part of these Bidding Terms.

1.2.14 Co-financing: Non-refundable contribution of the state of the Republic

of Peru to finance in full the New Works execution of the First Phase, according to the amount required by the Successful Bidder in its Economic Proposal.

1.2.15 Maximum Co-financing (COMAX): The top amount in terms of which

Qualified Bidders must submit their Offered Co-financing proposals as part of their Economic Proposal. The amount of COMAX established for the purposes of the Public Bid amounts to US$ _________ (__________million ______________________________ thousand and 00/100 Dollars) including VAT.

This value will be communicated promptly by Circular Letter.

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1.2.16 Offered Co-financing (CO O): The amount of co-financing required by the Qualified Bidder as part of its Economic Proposal including VAT.

1.2.17 Committee: PROINVERSION’s Committee on Road

Infrastructure, Railway Infrastructure and Airport Infrastructure projects - PRO INTEGRATION, constituted by Supreme Resolution No. 010-2012-EF, which is responsible for carrying out the Public bid.

1.2.18 Proof of payment for Right for Participation : The document that

PROINVERSIÓN shall deliver to the Acquirer as proof of having made the payment of the Right for Participation in the Comprehensive Project Bid.

1.2.19 Grantor: The State of the Republic of Peru represented by the

Regional Government. 1.2.20 Concession: The administrative act embodied in the Contract, by

which, the Grantor grants to Concessionaire the right to construct, operate and maintain the Works of the Project, according to the stipulations of the Concession Contract and subject to the provisions of Applicable Laws.

1.2.21 Concessionaire: The legal entity incorporated by the Successful

Bidder that enters into the Concession Contract with the Grantor. 1.2.22 Comprehensive Projects Bid or Public Bid: The selection process

governed by these Bidding Terms to award the Concession. 1.2.23 Consortium: Is the group of two or more legal entities, which lacks

independent legal personality from its members, which has been incorporated with the purpose of participating as Bidder in this Public Bid.

1.2.24 Construction Company (s): The Bidder or Member thereof, in case of

a Consortium, or at the time the Concessionaire, acting as a construction company that is responsible for the execution of New Works. Specialized Contractor (s) may also carry out construction of New Works assigned by the Concessionaire.

Such condition, in any of the cases mentioned above, must be accredited by the Qualified Bidder, pursuant to the provisions of Section 5.2 of these Bidding Terms, in order to be qualified by the Committee.

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The Constructor Company (s), if applicable, shall sign with the Concessionaire, the construction contracts corresponding to the complete execution of each of the two (2) Concession Phases, taking joint and several liability for the proper execution of the works regarding the respective Construction Contracts, and their effect on Existing Works.

1.2.25 Concession Contract or Contract: The Contract that grants in

Concession the construction, operation and maintenance of Project Works regulating the provision of Service and other conditions established for that purpose between the Concessionaire and the Grantor.

1.2.26 Effective Control: A natural or legal person holds the Effective Control

of another natural or legal person or is subject to mutual control with the former when:

- There is control, directly or indirectly, of more than fifty percent (50%) of

its share capital with voting rights ;

- It has a representation, directly or indirectly of the members of the board or equivalent body, greater than fifty percent (50%) of its members;

- Through any mechanism or circumstance (contractual or not), the first one holds the power of decision over the second in an effective manner.

1.2.27 Timeline: The sequence of temporary activities taking place during the

process of this Bid and listed in Section 1.6. 1.2.28 Affidavit Statement: Written statement submitted by the Bidder stating

or assuming an obligation that is believed to be true for the purposes of this Bid without prejudice to the Committee’ right to check the veracity of such statement, as indicated in Section 5.1.

1.2.29 Participation Fee: The amount equivalent to US$ 2,500 (Two

thousand five hundred dollars), to be paid to PROINVERSIÓN in order to participate in the Public Bid.

1.2.30 Days: Unless expressly provided to the contrary, references to "days"

shall be construed as business days, i.e. other than Saturday, Sunday

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or non-working holidays in the city of Lima. Holidays are also understood as non-working days for the public sector.

1.2.31 Dollar or American Dollar or US$: It is the currency in legal tender

used in the United States of America. 1.2.32 Affiliated Company: A company will be considered affiliated with

another company when Effective Control of such companies is held by the same Parent Company.

1.2.33 Parent Company: It is an enterprise that has Effective Control of one

or more companies. This definition also includes those enterprises that have Effective Control of a Parent Company, as defined, and so on.

1.2.34 Subsidiary Company: That company whose Effective Control is

exercised by another Company. 1.2.35 Related Company: It refers to any Affiliated, Subsidiary or Parent

Company between each other. 1.2.36 Banking Companies: These are the ones referred to in Appendix 2,

Annex No. 2. 1.2.37 International Financial Institution: Those included in Appendix 1 of

Annex No 2. 1.2.38 Delivery of Project Control: It shall mean the delivery to the

Concessionaire of land that will host the New Works and auxiliary activities, as well as, the timely delivery of the Existing Works, involving also the delivery of technical and legal documentation supporting the possession of the Concessionaire of the work sites and its performance in the scope of the Project. This definition will be supplemented in the Concession Contract.

1.2.39 Feasibility Study: It refers to the feasibility study of the third stage of

the Chavimochic Project, organized by the PECH, which has developed the following, among other things:

a) The general approach of the Project b) Assessment and planning of water resource use c) Engineering and construction costs of the works of the third stage

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d) The operation and maintenance activities and costs of such works, and the major hydraulic infrastructure of the Chavimochic Project as a whole.

Based on this study, the confirmation of the Chavimochic Project feasibility condition was obtained, under the National Public Investment System, which was declared by Technical Report No. 070-2012-EF/63.01 of the General Directorate for Investment Policy of the Ministry of Economy and Finance.

1.2.40 Project Studies or Existing Studies: These are Feasibility Studies,

review and complementation studies conducted by the Technical Adviser and studies related to the development of the works of the first and second stages of the Chavimochic Project, which constitute the basic reference for the formulation of the Bidders’ Technical Proposals as part of this Public Bid, regardless of the solutions the Bidder may adopt under the specifications in Annex No. 9 - Terms of Reference.

Since Existing Studies have referential character for the purposes of this Public Bid, the GRANTOR assumes no responsibility for its contents in accordance with the provisions in Section 13 of Annex 9 of these Bidding Terms.

1.2.41 Geological Event: It is linked to the geological risk in the construction

works of tunnels, foundation and abutments at Palo Redondo. It shall have the definition and scope established in the Concession Contract.

1.2.42 Technical File No. 1: It will be comprised by the Technical Proposal

and the Concessionaire’s final draft in relation to the construction of New Works of the First Phase. The process of preparation and approval of Technical File No. 1 must be carried out before the completion of the Initial Period.

1.2.43 Technical File No. 2: It will be comprised by the Technical Proposal

and the Concessionaire’s final draft in relation to the construction of New Works of the Second Phase. The process of preparation and approval of Technical File No. 2 must also be carried out before the completion of the Initial Period.

1.2.44 Concession Phases or Phases: The Concessionaire’s obligations

have been disaggregated into two phases (Phase I and Phase II) which shall be carried out separately and in parallel, as detailed in Annex No. 9 - Terms of Reference.

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For the purposes of the construction of New Works, the two phases will have different funding sources, different construction contracts and separate accounts, so that: i) in the case of the First Phase which is Co-financed, records of works to be carried out will be considered expenses, and ii) in the case of the Second Phase, which is funded by the Concessionaire, its accounts will be exempted from contributions or payments to the State during the Initial and Construction Periods.

1.2.45 Closing Date: The day established in Section 1.6, at the place and

time to be communicated by the Committee through Circular Letter, to carry out the acts set forth in Section 10.2 of these Bidding Terms.

1.2.46 FONCEPRI: The Private Investment Promotion Fund for Infrastructure

and Utilities Public Works (FONCEPRI), which is managed by PROINVERSIÓN.

1.2.47 Guarantee of Validity, Validity Term and Ser iousness of the

Economic Proposal: Bank Letter of Guarantee for an amount equivalent to 1.5% (one point five percent) of the Referential Investment Amount, to be delivered by the Bidder for PROINVERSIÓN to ensure the validity, effectiveness and seriousness of its Economic Proposal, conforming to the template attached as Form 3, Annex No. 5.

Alternatively, a stand-by letter of credit may be accepted, which may take the formalities used by the bank carrying out the transaction, provided it complies with the requirements indicated in Form 3 of Annex No. 5, and is issued by an International Financial Institution and confirmed by a Bank.

1.2.48 Concession Contract Performance Bond: Bond to be obtained by the

Concessionaire through a bank letter of guarantee as template in Annex 2 and subject to the conditions set out in Section 10.2.1.5. Such bond must be issued by a banking company or an International financial Institution referred to in Appendices 1 and 2 of Annex No. 2 of these Bidding Terms.

Alternatively, a stand-by letter of credit may be accepted, which may take the formalities used by the bank carrying out the transaction, provided it complies with the requirements indicated in Annex No. 2, and is issued by a First Category Foreign Bank and confirmed by a Local Bank.

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1.2.49 Sovereign Guarantee: It refers to the assurance granted by the Government to the commitment assumed by the Grantor for payment for the RPI in the Concession Contract, during the twenty-year (20) Period of Operation.

1.2.50 National Government: It refers to government of the State of the

Republic of Peru exercised by the Executive Power in accordance with the Political Constitution of Peru, its Organic Law and Decentralization Law.

1.2.51 Regional Government and Regional Government of La Libertad:

The Regional Government of the department of La Libertad. 1.2.52 VAT: Value Added Tax. 1.2.53 Work Engineer for the First Phase: Engineer appointed by the

Concessionaire or the Construction Company, if applicable, which is directly and permanently responsible for the direction and execution of the New Works for the First Phase.

1.2.54 Work Engineer for the Second Phase: Engineer appointed by the

Concessionaire or the Construction Company, if applicable, which is directly and permanently responsible for the direction and execution of the New Works for the Second Phase.

1.2.55 Members: Each of the legal entities that are part of a Consortium. 1.2.56 Strategic Investor: The Bidder or one of its Members in case of a

Consortium, which complies with the provisions of Section 5.3.8.2, and also proves at least 50% (fifty percent) of the amount of equity required as financial requirement in Section 5.4.1.

1.2.57 Applicable Laws: This is the set of Peruvian laws governing the

Contract and its effects. It includes the Political Constitution of Peru, the regulations with force of law, supreme decrees, rules, directives and resolutions that any competent Governmental Authority may dictate.

1.2.58 Minor Economic Proposal: The Economic Proposal yielding the

lowest value resulting from the application of the assessment formula for the Bidders’ Economic Proposals contained in Section 1.2.68, in terms of which the Project will be awarded.

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1.2.59 Investment Amount: The amount that results from the Successful Bidder’s Economic Proposal, including VAT, required for the Concessionaire to perform the following activities: i) construction of the New Works of the First Phase and the respective ancillary works under works scheme adopted by the Concessionaire, and ii) construction of New Works of the Second Phase.

In the Investment Amount structure, the direct and indirect costs of works, supervision costs of New Works, studies, insurance and interests, among others are considered globally and disaggregated by Phases.

1.2.60 Referential Investment Amount: The amount of investment,

according to the Grantor’s calculations required for the execution of the following activities: a) the construction of New Works of the First Phase and respective ancillary works according to the works referential scheme adopted for estimating investment and b) the construction of New Works of the Second Phase.

In the Referential Investment Amount structure, the direct costs of works, overhead and profit, costs of engineering studies, "All Risk" insurance, supervision costs of New Works and interests have been included, broken down by phases. The Referential Investment Amount amounts to US$ _________ (____________ _______________ million ___________ thousand and 00/100 Dollars) including VAT. The Referential Investment Amount, shown above, will be the basis for establishing the amount of the Guarantee of Validity, Validity Term and Seriousness of the Economic Proposal, Performance Bond and other monetary obligations of the Concessionaire. The Referential Investment Amount disaggregated by Phases amounts to the following sums, including VAT: First Phase: US$ _________ (____________million _______________ thousand ___________ and 00/100 Dollars). Second Phase: US$ _________ (____________million _______________ thousand ___________ and 00/100 Dollars). These amounts shall be timely communicated by Circular Letter.

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1.2.61 Notifications: These are listed in Section 2.1.5.

1.2.62 Nuevo Sol: The legal currency in Peru. 1.2.63 Project Works or Works: The set of assets to be used, built,

renovated, operated, exploited and/or maintained by the Concessionaire to achieve service delivery regarding conveyance and delivery of irrigation water to the users of the Project and to fulfill other obligations arising from the terms of the Concession Contract. This concept involves the group of Existing Works and New Works.

1.2.64 Existing Works: These are the major hydraulic works, including

facilities and equipment, which were built as part of the first and second stages of the Chavimochic Project, whose relationship is detailed in the Concession Contract.

1.2.65 New Works: The set of New Works of the First Phase and New Works

of the Second Phase. 1.2.66 New Works of the First Phase: These are the works to be Co-

financed and that are defined as such in Annex No. 9 - Terms of Reference.

1.2.67 New Works of the Second Phase: These are the works to be

financed entirely by the Concessionaire and that are defined as such in Annex No. 9 - Terms of Reference.

1.2.68 Economic Proposal: Made up with the values proposed by bidders for

COO, RPIO and RPMOO, properly related to the values of COMAX, RPIMAX and RPMOMAX set out in these Bidding Terms.

For purposes of this Public Bid, an Economic Proposal shall be deemed valid if it complies with the terms set out in Annex No. 6, and if its values are equal to or less than those established for COMAX, RPIMAX and RPMOMAX.

The formula to be used to determine the Lowest Economic Proposal as a result of the Bidders’ Economic Proposal evaluations is as follows:

COO RPI O RPMO O

COMAX RPI MAX RPMOMAX γ+ OE β + α =

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Where: − OE is the Economic Proposal. − α, β y γ are weighted indices (values of α, β, and

γ will be announced by circular letter) − COO is the Co-financing proposed by the Bidder. − COMAX is the maximum Co-financing. − RPIO is the RPI proposed by the Bidder. − RPIMAX is the maximum RPI. − RPMOO is the RPMO proposed by the Bidder. − RPMOMAX is the maximum RPMO. The result of the application of the formula will be expressed with four (4) digits after the decimal point.

1.2.69 Construction Period: Corresponds to the definition contained in Annex No. 9 - Terms of Reference.

1.2.70 Initial Period: Corresponds to the definition contained in Annex No. 9 -

Terms of Reference. 1.2.71 Operation Period: Corresponds to the definition contained in Annex

No. 9 - Terms of Reference. 1.2.72 Post-Construction Period: Corresponds to the definition contained in

Annex No. 9 - Terms of Reference.

1.2.73 Person: Any individual or corporation, domestic or foreign person who can perform legal acts and undertake obligations in Peru.

1.2.74 Peru: The Republic of Peru, including any political division or

subdivision thereof. 1.2.75 General Work Plan: The general schedule established by Bidders for

the implementation of the Project and whose preparation will be carried out according to its approach and conceptualization.

The of the First Phase work plan and the Second Phase work plan are part of the General Work Plan.

1.2.76 Bidder: It is a legal entity or a consortium participating in this Public

Bid and is subject to the provisions of these Bidding Terms, requesting to be considered a Qualified Bidder.

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1.2.77 Qualified Bidder: The Bidder whose documentation, properly submitted through Envelope No. 1, has complied with the requirements of these Bidding terms, accepted and expressly declared as such by the Committee. After the short-listing process, the Qualified Bidder may simply be called Bidder.

1.2.78 First Phase: This refers to the Concessionaire's obligations described

in Annex No. 9 - Terms of Reference.

1.2.79 Proposal: Indistinctively the Economic Proposal or Technical Proposal or both submitted by the Bidder.

1.2.80 Economic or Financial Proposal: It is the Bidder's Economic

Proposal to be submitted in Envelope No. 3, according to Section 7.2. 1.2.81 Technical Proposal: The set of documents submitted by the Bidder in

Envelope No. 2, as indicated in Section 7.1.4. 1.2.82 Draft Contract: The draft Contract submitted by the Bidders in order to

receive suggestions. None of the terms and/or criteria contained therein shall be binding to PROINVERSIÓN, the Committee and/or the Grantor to any extent.

1.2.83 Special Project or PECH: The Chavimochic Special Project,

subsidiary of the Regional Government of La Libertad, which is responsible for carrying out the Chavimochic Project.

1.2.84 Chavimochic Project or Project: the multipurpose development

project described in Annex 9 and Existing Studies, whose first and second stages are built and in operation, and whose major hydraulic works, including its third phase, still to be built, are the purpose of the Private Investment Promotion Plan of the Chavimochic Project.

1.2.85 Maximum Annual Compensation for Operation an d Maintenance

(RPMOMAX): The maximum compensation estimated by the Grantor for operation and maintenance payment of the Project Works, based on which, the Qualified Bidder shall formulate its RPMOO as part of its Economic Proposal for an amount equal to or less than such amount.

The RPMOMAX value estimated by the Grantor amounts to US$ _________(_______________ million ____________ thousand ___________ and 00/100 Dollars) plus VAT, expressed in values on the Agreement Closing date

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This value will be timely communicated by Circular Letter.

1.2.86 Proposed Annual Compensation for Operation a nd Maintenance

(RPMOO): The RPMO proposed by each of the Qualified Bidders under their Economic Proposal, excluding VAT.

1.2.87 Annual Compensation for Operation and Mainte nance (RPMO): The

RPMO proposed by the Successful Bidder, plus VAT, to be paid from Service revenues deposited in the Trust. Adjustment mechanisms to the RPMO value shall be stated in the Concession Contract.

Maximum Annual Compensation for Investment Recovery (RPIMAX): The maximum payment estimated by the Grantor for the Concessionaire’s investment recovery payment of the New Works of the Second Phase, based on which, the Qualified Bidder shall formulate a proposal for Annual Compensation for Investment Recovery as part of its Economic Proposal for an amount equal to or less than such amount.

1.2.88 The RPIMAX value estimated by the Grantor amounts to US$ _________ (_______________ million ____________ thousand ___________ and 00/100 Dollars) plus VAT, expressed in values on the Agreement Closing date. This value will be timely communicated by Circular Letter.

1.2.89 Proposed Annual Compensation for Investment Recovery (RPI O):

The RPI proposed by each of the Qualified Bidders under their Economic Proposals, excluding VAT.

1.2.90 Annual Compensation for Investment Recovery (RPI): The RPI

proposed by the Successful Bidder, plus VAT, to be paid from Service revenues deposited in the Trust. RPI payments will have the support of the Sovereign Guarantee.

The RPI value will remain without adjustments during the term of the Concession.

1.2.91 Legal Representative: The natural person with address in Peru

appointed as such by the Bidder.

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1.2.92 Qualification Requirements: The technical, legal and financial

requirements identified in Section 5 of these Bidding Terms, to be fulfilled by the Bidder in order to be declared as Qualified Bidder to continue participating in the Public bid.

1.2.93 Data Room: The area assigned in the offices linked to the

Chavimochic Special Project, located at Av. 2 s/n del Parque Industrial – Distrito La Esperanza – Trujillo – Perú; which shall contain information related to the Project and which may be visited by the Acquirers and Bidders under the terms stated in these Bidding Terms.

1.2.94 Second Phase: This refers to the Concessionaire's obligations

described in Annex No. 9 - Terms of Reference. 1.2.95 Service: Conveyance and delivery of water service to be provided by

the Concessionaire to the users of the Project. The Service will be performed subject to the respective conveyance and delivery of water service agreements, whose templates will be attached to the Concession Agreement, differentiating those that correspond to drinking water, irrigation and hydropower purposes supply.

1.2.96 Envelope No. 1: The envelope containing the documents specified in

Section 5 of these Bidding Terms, to be submitted by the Bidder. 1.2.97 Envelope N° 2: The envelope containing the documents specified in

Section 7.1 of these Bidding Terms, to be submitted by the Qualified Bidder.

1.2.98 Envelope N° 3: The envelope containing the Economic Proposal to be

submitted by a Qualified Bidder, pursuant to the provisions of Section 7.2.

1.2.99 Rate (s): These are the Basic Rates applicable to the Service to be

provided in the Concession Agreement, excluding VAT, subject to the regulations and adjustment mechanisms under such contract.

1.2.100 Basic Rate (s): These is the basic unit or initial compensation per

cubic meter of water applicable to the various users of the Service, in accordance with the values, excluding VAT, described in the Feasibility Study of the Chavimochic Project and Technical Report No. 070-2012-EF/63.01 of the General Directorate for Investment Policy of the Ministry of Economy and Finance.

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1.2.101 Terms of reference: The description of the conditions and scope to be

considered by the Qualified Bidder for the development of its Technical Proposal and the preparation of Technical Files, including level of details to submit the technical documentation, according to minimum technical specifications established for the concession’s execution, implementation and supervision works, its operation and maintenance, quality requirements and environmental protection measures, as detailed in Annex No. 9.

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1.3 Legal framework and background

1.3.1 By Supreme Decree No. 059-96-PCM, published on December 27, 1996, the Consolidated Text was approved regarding regulations with force of law governing the granting in concession of infrastructure public works and utilities to the private sector.

1.3.2 By Supreme Decree No. 060-96-PCM, published on December 28, 1996, the Consolidated Text Regulations were enacted regarding regulations with force of law governing the granting in concession of infrastructure public works and utilities to the private sector.

1.3.3 On July 18, 2003, Law No. 28029 was published regulating the use of water in Special Projects granted in concession. Such law is currently regulated by Supreme Decree No. 022-2009-AG published on October 29, 2009.

1.3.4 By Supreme Decree No. 017-2003-Housing dated August 3, 2003, the Chavimochic Special Project was transferred from the National Development Institute (INADE) to the Regional Government of La Libertad.

1.3.5 By Regional Agreement No. 090-2004-CR/R-LL adopted in meeting dated October 25, 2004, the Regional Government of La Libertad declared the consolidation of the First and Second Stages and Third Stage studies of the Chavimochic Special Project as priorities and of public need, reaffirming the need for the implementation of the Third Stage.

1.3.6 By Legislative Decree No. 1012 published on May 13, 2008, the Framework Law on Public - Private Partnerships was adopted for the generation of productive employment laying down the rules for the streamlining of processes to promote private investment, being that standard regulated by Supreme Decree No. 146-2008-EF published on December 9, 2008.

1.3.7 By Emergency Decree No. 047-2008 published on December 18, 2008, extraordinary provisions to facilitate public-private partnerships promoted by the National Government in the context of the international crisis were issued, declaring the implementation by PROINVERSIÓN of private investment promotion processes of national need and priority in relation to the granting of various projects, among which is the Chavimochic Project.

1.3.8 By Regional Agreement No. 028-2009-GR-LL/CR adopted in meeting

dated June 3, 2009, the Regional Council of the Regional Government of La Libertad agreed, among other things, to incorporate the

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Chavimochic project in the private investment promotion process; it also agreed to request PROINVERSIÓN for technical assistance for the concession of the design, execution and development of the Private Investment Promotion Process in the First Phase - Third Stage of the Chavimochic Project.

1.3.9 By resolution of PROINVERSIÓN’s Steering Council adopted in

meeting dated June 17, 2009, ratified by Supreme Resolution No. 075-2009-EF published on July 9, 2009, the following was agreed:

a) Approve PROINVERSION’s commitment to be responsible for the

private investment promotion process of Phase I - Third Stage of the Chavimochic Project;

b) Assign such process to PROINVERSION’s Committee for Sanitation and Irrigation Projects - PRO AGUA;

c) Approve the content of the technical assistance agreement as a concession to be signed between PROINVERSIÓN and the Regional Government of La Libertad.

1.3.10 On June 30, 2009, a technical assistance agreement was signed, under

which the Regional Government of La Libertad commissioned PROINVERSIÓN the design, execution and development of the private investment promotion process of the Chavimochic Project, with the following components:

a) Hydraulic component, which includes the Third Stage Phase I works,

the existing work of the First and Second Stages as well as the operation and maintenance of such works.

b) Energy component: including the hydropower utilization of the Project,

including existing ones.

c) Land component, which includes the promotion and transfer to the private sector of land available for agricultural use.

1.3.11 By Regional Ordinance No. 032-2009-GR-LL/CR dated December 15,

2009, the Regional Government of La Libertad, approved the Concerted Regional Development Plan of La Libertad 2010-2021 prioritizing the execution is of Third Stage of the Chavimochic Project.

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1.3.12 By Directorial Resolution No. 272-2011-ANA published on May 17, 2011, the water resource reservation granted by Supreme Decree No. 003-2009-AG was extended for two additional years, in favor of Chinecas and Chavimochic Special Projects.

1.3.13 By Supreme Resolution No. 134-2011-PCM dated May 25, 2011, the

Temporary Multisectoral Commission for the Chavimochic project was created, which analyzes the options and technical alternatives for the development of the feasibility study of the Third Stage of the Chavimochic Project.

1.3.14 The Final Report of the Multisectoral Commission, dated August 24,

2011, highlighted the importance of comprehensively implementing the Third Stage of the Chavimochic Project, as this is the best alternative to complete the project’s development and create sustainable job in the region of La Libertad, thus anticipating ways to achieve greater benefits, both by incorporating new areas and improving irrigation in current production areas, which will, in turn, enable to achieve a better distribution of user contributions to recover investments and to cover the operation and maintenance costs.

1.3.15 By Supreme Resolution No. 010-2012-EF dated February 9, 2012,

amended by Erratum dated February 21, 2012, the constitution of the Private Investment Promotion Agency - PROINVERSIÓN Special Committees created by Supreme Resolution No. 036-2009-EF was amended, as follows:

• PROINVERSION’s Committee on Road Infrastructure, Railway

Infrastructure and Airport Infrastructure projects - PRO INTEGRATION;

• PROINVERSION’s Committee on Energy and Hydrocarbon projects - PRO CONECTIVIDAD; and

• PROINVERSIÓN Committee on Infrastructure and Social Utilities, Mining, Sanitation, Irrigation and Agricultural Projects - PRO DESARROLLO.


meeting dated March 7, 2012, it was agreed to assign the private investment promotion process of the Chavimochic Project to the PRO INTEGRACIÓN Committee.

1.3.17 By Regional Agreement No. 038-2012-GR-LL/CR adopted in meeting

on March 26, 2012, the Regional Government of La Libertad agreed, among other things, to propose PROINVERSIÓN the amendment of the

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concession scope assigned through Regional Agreement No. 028-2009-GR-LL/CR regarding the design, execution and development of private investment promotion processes of the Chavimochic Project, as follows:

i) Major hydraulic works component:

a. Design and construction of the Third Stage works; b. Operation and maintenance of the Third Stage works and

existing works of the First and Second Stages; and, c. Water supply service to different users of the Chavimochic

Project (agriculture, population and hydroelectric).

ii) Land component: transfer to the private sector of land available for agricultural use, among others.


meeting dated April 26, 2012, it was agreed, among other things, to approve the amendments of the concession scope assigned to PROINVERSIÓN in accordance with the terms contained in Article I of Regional Agreement No. 038-2012-GR-LL/CR dated March 26, 2012 and authorize the PROINVERSION’s Executive Director to sign Addendum No. 1 of the said agreement.

1.3.19 On May 16, 2012, PROINVERSION signed with the Regional

Government of La Libertad Addendum No. 1 of the Technical Assistance Agreement to implement provisions in the previous paragraph.

1.3.20 By Official Letter No. 2044-2012-EF/63.01 dated July 5, 2012, and on

the basis of the Technical Report No. 070-2012-EF/63.01, the Directorate General of Investment Policy of the Ministry of Finance confirmed the feasibility condition of the Chavimochic Project. Such technical report states that the granting of major hydraulic works will be implemented through a Public-Private Partnership.

1.3.21 By Official Letter No. 194-2012-EF/15.01 dated September 10, 2012,

the Ministry of Economy and Finance attached Report No. 625-2012-EF/63.01, which contains a favorable opinion on the Private Investment Promotion Plan draft of the Chavimochic Project (approved by the PRO INTEGRACIÓN by agreement dated August 8, 2012) subject to adjustments to be made in the drafting, as detailed in such report, and which are incorporated in this document.

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1.3.22 By Regional Agreement No. 161-2012-GR-LL/CR dated October 5, 2012, the Regional Government of La Libertad agreed to the Private Investment Promotion Plan of the Chavimochic Project, which included the adjustments requested by the Ministry of Economy and Finance, as indicated in the previous paragraph.

1.3.23 PROINVERSION’s Steering Council in meeting held on October 11,

2012, approved the Private Investment Promotion Plan of the Chavimochic Project.

1.3.24 By Supreme Resolution No. 077-2012-EF published on December 9,

2012, PROINVERSION’s Steering Council agreement alluded to in the preceding paragraph was ratified.

1.3.25 By resolution of PROINVERSIÓN’s Steering Council dated _________

________, 2013, these Bidding Terms were approved.

1.3.26 By agreement dated __ ___, 2013, PROINVERSION’s Steering Council approved the concession’s financial scheme.

1.4 Powers of the Committee and PROINVERSION 1.4.1 The Committee aims to execute the Comprehensive Project Bid for the

Concession of major hydraulic works of the Chavimochic Project. In this regard, the Committee is empowered, among other things, to promote, schedule, regulate, modify, manage, monitor, control and dictate all provisions deemed pertinent or necessary to the execution of this Public Bid, and to resolve all what is not provided for in these Bidding Terms or Applicable Laws and, in general, to exercise all other powers assigned by Applicable Laws.

1.4.2 The Committee may extend the time limits specified in these Bidding

terms. In addition, this Bid may be suspended or canceled if the Committee deems it appropriate, without expressing cause and without incurring in any liability as a result of it. Any amendment to these Bidding Terms shall be communicated to the Acquirers of Qualified Bidders, as appropriate, through Circular letters.

1.4.3 The mere submission of the information provided in these Bidding

Terms and/or requested by the Committee for purposes of qualifying as a Bidder does not require the Committee to declare it as Qualified Bidder, nor the submission of a proposal requires the Committee to accept it.

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The mere submission of the necessary documents to qualify, implies full knowledge, acceptance and unconditional submission by the Acquirer, the Bidder or the Successful Bidder, as appropriate, to each and every one of the procedures, obligations, conditions and rules - without exception - established in the Bidding terms, which are legally binding on those. They also imply irrevocable and unconditional resignation to raise before any court or authority any action, claim, demand or claim for compensation against the State, the Regional Government, PROINVERSIÓN, the Committee, consultants, or any other entity, agency or official of the Government of Peru for the exercise of the option provided for in these Bidding Terms.

1.4.4 Except as expressly provided to the contrary in these Bidding Terms, the decisions of the Committee or PROINVERSIÓN, as applicable, in connection with this Bid are final, with no right to compensation of any kind and not subject to challenge in administrative or judicial fields. Consequently, by the mere payment of the Right of Participation or participation in the Bid, participants that fall under the scope of these Bidding Terms waive any legal challenge against such decisions.

1.5 Concession Contract 1.5.1 The Draft Contracts and their final version will be made available to the

Acquirers in accordance with the provisions of Section 1.6, Schedule of these Bidding Terms.

1.5.2 The Acquirers or Bidders may submit questions to the Bidding Terms

and suggestions to the Draft Contract within the time limits specified in Section 1.6 of these Bidding Terms, with the formalities prescribed in Sections 3.1.1 and 3.1.2. The Committee is not obliged to consider or respond to the Acquirers or Bidders’ suggestions to the Draft Contracts.

1.6 Bid Schedule

Dates of activities in the Schedule are as follows:

Section Activity Date/Period

1.6.1 Call and publication of the Bidding Terms 03/21/2013

1.6.2 First round of enquires to the Bidding Terms Until 05/20/2013

1.6.3 Answer to the First round of enquires to the Bidding Terms

06/10/2013

1.6.4 Publication of the first Draft Contract

06/19/2013

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1.6.5 Reception of comments and suggestions to the First Draft Contract

Until 07/9/2013

1.6.6 Publication of the second Draft Contract

07/19/2013

1.6.7 Reception of comments and suggestions to the Second Draft Contract

Until 08/8/2013

1.6.8 Second round of consultations to the Bidding Terms Until 07/19/2013

1.6.9 Response to the Second round of consultations to the Bidding Terms

08/5/2013

1.6.10 Publication of the Third Draft Contract

08/19/2013

1.6.11 Reception of comments and suggestions to the Third Draft Contract

Until 09/2/2013

1.6.12 Submission of Envelope No. 1 Until 09/17/2013

1.6.13 Amendments to observations made to documents in Envelope No. 1

Until 10/2/2013

1.6.14 Announcement of short-listing Bidders

10/7/2013

1.6.15 Access to the Data Room Until 10/28/2013

1.6.16

Publication of the final Contract version approved by PROINVERSIÓN’s Steering Council

10/14/2013

1.6.17 Prior Report to the Comptroller General of the Republic 11/6/2013

1.6.18 Submission of Envelopes No. 2 and No. 3 and opening of Envelope No. 2

11/11/2013

1.6.19 Amendments to observations made to documents in Envelope No. 2

Up to 3 business days after activity 1.6.18

1.6.20

Correction of clarification requests made to the technical proposal contained in Envelope No. 2

Up to 2 business days before activity 1.6.21

1.6.21

Announcement of evaluation results of Envelope No. 2, Opening of Envelope No. 3 and Project Award

11/26/2013

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1.6.22 Closing Date To be notified by Circular Letter

The Committee may amend the Schedule dates at any time and shall inform interested parties by Circular Letter. Except where expressly stated otherwise, the maximum period of the day, will expire at 17:00 hours in Lima - Peru.

2. AUTHORIZED AGENTS AND LEGAL REPRESENTATIVE

2.1 Authorized Agents 2.1.1 Designation of Authorized Agents

Each Acquirer, before making use of the Data Room shall appoint two (2) individuals as their Authorized Agents, for purposes of this Bid.

2.1.2 Letter of designation

The designation of the Authorized Agents shall be carried out through a simple letter signed by the Acquirer or, if it is a legal person, by the its Legal representative, specifically noting its powers and including the appropriate information, as stated in Sections 2.1.3 and 2.1.4.

2.1.3 Powers granted

Duly appointed Authorized Agents may act indistinctively from each other and not necessarily together and shall be the only persons authorized by the Acquirer or the Bidder, as appropriate, to:

I. Represent the Acquirer before PROINVERSIÓN, the Regional

Government, the Committee and its advisors, on all matters that are not within the exclusive competence of the legal Representative in accordance with Section 2.2.1;

II. Reply on behalf of the Acquirer or short-listed Bidder with binding

effect on its principal, any questions that the Committee may formulate;

III. Receive Circular Letters, judicial or extrajudicial notifications; IV. Subscribe, with binding effect for the Bidder, the Confidentiality

Agreement as Annex 1 format; and

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V. Request information to the Committee and make use of the Data

Room. 2.1.4 Information

The information to be provided in relation to each of the Authorized Agents will be: name, identity document, common address, phone number, fax number and email address. The common address, phone and fax numbers must be set within the city of Lima and Callao.

2.1.5 Notifications

All extrajudicial notices addressed to the Acquirer or the Bidder may be made to any Authorized Agent by facsimile or email, or by letter delivered by courier or through a notary public, in which case the notice shall be deemed received on the date of delivery; considering any notice given by facsimile, electronic mail or common domicile as well effected and effective pursuant to Section 2.1.4.

2.1.6 Replacement

The Acquirer or the Bidder, upon written notice to the Committee complying with the same requirements set forth in Section 2.1.2, may replace the Authorized Agents at any time, or change the address, phone, fax numbers or email stated, taking into account that both the new address and new common phone and fax numbers must be set within the city of Lima and Callao. The designation of Authorized Agents or changes in their common domicile, telephone, fax or email, depending on the case; take effect from the date on which the respective communication issued by the Acquirer or Bidder is received by the Committee.

2.2 Legal Representative 2.2.1 Appointment and powers

Documents contained in the Envelopes No.1, No. 2 and No. 3 and, in general, all documents submitted by the Bidder regarding the Bid, shall be signed by its Legal Representative, who shall be duly authorized, in accordance with the provisions of this Section.

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The Bidder may only appoint up to two (2) common Legal Representatives to represent him, jointly or individually, as provided in this Section. The address, fax number, telephone number, email of Legal Representatives as well as their replacement are by extension subject to the provisions of Sections 2.1.4, 2.1.5 and 2.1.6. The powers granted to each of the Legal Representatives must be ample enough so that any of them or jointly, as appropriate, may sign on behalf of their principal, all documents required by the Bidding Conditions, including, specifically, the power to initiate challenge procedures provided for in the Bidding Conditions, sign submission of proposal Forms and subscribe the Contract, if applicable. If the Bidder is a Consortium, designation of their Legal Representatives must be made through the legal representatives of the Consortium members that have authority to do so. The powers of the Consortium’s Legal Representatives and the legal representatives of the Consortium members shall include the same formalities specified in Sections 2.2.2 and 2.2.3.

2.2.2 Submission of the power of attorney

The power of attorney by which the Legal Representatives are appointed must contain the corresponding powers of representation and will be submitted in Envelope No.1. The appointment of a new Legal Representative shall only take effect from the date on which the Committee receives the proper documents evidencing such appointment.

2.2.3 Place where the power of attorney is granted

The power of attorney granted in Peru shall be constituted by means of a public deed or a notary certified copy of the relevant corporate body minute by which it is granted. The power of attorney granted outside Peru appointing a Legal Representative must be:

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I. Duly issued or legalized by the competent consulate of Peru accompanied by a simple translation in Spanish if issued in another language; and

II. Endorsed by the Ministry of Foreign Affairs of Peru;

Where the Bidder or Member is from a contracting member State (Signatory) of the "Convention Abolishing the Requirement of Legalization for Foreign Public Documents" adopted on October 5, 1961 in the City The Hague, Kingdom of the Netherlands, approved by Legislative Resolution No. 29445 and ratified by Supreme Decree No. 086-2009-RE, the proxy granted outside of Peru and appointing a Legal Representative will not require extension or legalization as referred to in the preceding Paragraph, it shall suffice that these documents comply with the terms of that agreement, provided that the respective country has not expressed any observations regarding Peru’s adhesion. The formalities mentioned above also apply to the submission of copies or notarized signatures that are required in these Bidding Conditions.

2.2.4 Registration in the Register Office

On no account is it required that at the time of submission, the faculties of the Bidder’s Legal Representative are registered in the Public Registry. However, the faculties of the Concessionaire’s Legal Representative must be registered in the relevant Public Registry before the Closing Date in the event the Bidder is the Successful Bidder.

3. INQUIRIES AND INFORMATION 3.1 Inquiries on the Bidding Terms and suggestions to the Draft

Contract. 3.1.1 Deadline for Inquiries and suggestions

Acquirers and/or Bidders, through their Authorized Agents and/or Legal Representatives, may make inquiries regarding the Bidding Terms and suggestions to the Draft Contracts, from the dates specified in Section 1.6. To that end, the maximum term will be due at 17:00 hours of Lima - Perú.

3.1.2 Formality for inquiries

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Inquiries on the Bidding Terms and suggestions to the Draft Contracts shall be in writing and in Spanish and must be submitted at PROINVERSIÓN’s Reception Desk and addressed to: Luis Pita Chávez Jefe de Proyectos Hidroenergéticos y de Irrigación – PROINVERSIÓN Av. Canaval Moreyra N° 150, Piso 8, San Isidro - L ima, Perú Telephone [511] 200-1200, ext. 1327 Fax [511] 200-1260 E mail: [email protected]

3.1.3 Circular Letters

3.1.3.1 The Committee's responses to inquiries made shall be communicated by Circular Letter to all Acquirers and Bidders, as the case may be, without indicating the name of whoever made the inquiry.

If at any time, the Committee considers it necessary to clarify, modify or supplement the Bidding Terms, it will issue a Circular Letter to that effect. This Circular Letter will be sent to the Authorized Agents to the common address stated in Section 2.1.4 of these Bidding Terms. All Circular Letters issued will be posted on PROINVERSIÓN’s website: www.proinversion.gob.pe. After the Short-listing of Bidders, Circular Letters will only be notified to Shortlisted Bidders, and after the submission of Envelopes No. 2 and 3, only to the Bidders who submitted such Envelopes.

3.1.3.2 Circular Letters issued by the Committee shall constitute an

integral part of the Bidding Terms and are therefore legally binding for all Acquirers, Bidders and Qualified Bidders.

3.2 Access to Information - Data Room 3.2.1 Acquirers and Bidders shall have access to information related to the

Chavimochic Project which will be available for consultation in the Data Room located at:

Av. 2 s/n del Parque Industrial – distrito La Esperanza– Trujillo - Peru

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Telephone (044) 271-175. 3.2.2 Access to the Data Room shall be coordinated with the Committee under

the Bidding Terms for its operation, contained in Annex No. 8 "Data Room Users’ Guide" of the Bidding Terms.

3.2.3 Through written communication directed to the Committee by any of its

Authorized Agents or Legal Representatives, the Acquirers and Bidders shall indicate the name of the people and the period during which each will have access to the Data Room. The Committee will coordinate a timely and effective organization of visits to the Data Room.

3.2.4 Acquirers and Bidders will have access to the Data Room until the dates

specified in the Schedule. 3.3 Non-disclosure Agreement

In order to have access to the Data Room, Acquirers and Bidders must sign a Non-disclosure Agreement, which is included in Annex No. 1; delivering a copy to the Committee and another copy to the Chavimochic Special Project.

3.4 Request for interviews

All Acquirers or Bidders, through their Authorized Agents and/or Legal Representatives, as appropriate, shall be entitled to meet with officials of the Committee or PROINVERSIÓN, until the Day before the delivery of Envelope No. 1 and in the case of Qualified Bidders, until the Day before the delivery of Envelopes No. 2 and No. 3, prior coordination with PROINVERSIÓN’s Hydro-energy and Irrigation Project Manager to coordinate such interviews.

3.5 Limitations of Liability 3.5.1 Independent decision of the Bidders

All Bidders shall base their decision whether or not to submit their technical and economic proposals on their own investigations, examinations, inspections, visits, interviews, analysis and conclusions on the information available and such information collected by themselves, at their sole and entire risk.

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3.5.2 Limitation of liabilities

The State of the Republic of Peru, or any agency, body or officer thereof, PROINVERSIÓN, the Committee, the Regional Government or its advisers, assume no responsibility, offer no guarantee, express or implied, regarding completeness, integrity, adequacy, reliability or accuracy of the information, verbal or written, that is provided for the purpose of the Bid. Consequently, none of the persons participating in the Bid may attribute responsibility to any of the aforementioned parties or their representatives, agents or subsidiaries regarding the use of such information, or for any inaccuracy, insufficiency, defect, lacking of updating or for any other cause not expressly contemplated in this Section.

3.5.3 Scope of the Limitation of Liability

This restriction in Section 3.5.2 concerns, as widely as possible, all the information relative to the Bid that is actually known or unknown and information that at some point should have been known, including any errors or omissions contained therein, by the State of the Republic or any agency, organism or official thereof, or by PROINVERSIÓN, the Committee, the Regional Government or its advisors. Similarly, such limitation of liability extends to all information, whether or not supplied or prepared directly or indirectly by any of the aforementioned parties. The limitation of liability also extends to any information in the Data Room and which is provided through Circular Letters or any other form of communication, which is acquired during the site visits related to the Bid and those mentioned in the Bidding Terms, including all Forms, Annexes and Appendices.

3.5.4 Acceptance by the Qualified Bidder of provisions in Section 3.5

The mere presentation of Envelope No. 1, without any further act, shall mean the acceptance of all the provisions in Section 3.5 by the Bidder and, if applicable, the Construction Company as well as its irrevocable and unconditional waiver as is allowed by Applicable Laws, to raise any action, counterclaim, exception, claim, demand or claim for compensation against the State or any department, agency or official thereof, or PROINVERSIÓN, or the Regional Government or advisers.

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4. SUBMISSION OF ENVELOPES No.1, No. 2 AND No. 3 4.1 Submission 4.1.1 Submission of Envelope No. 1

The submission of the documentation to qualify contained in Envelope No. 1 will be held at the Committee’s offices located at Av. Canaval Moreyra N° 150, Piso 8, San Isidro - Lima, Perú, wi thin the period prescribed in Section 1.6 of these Bidding Terms.

4.1.2 Submission of Envelopes No. 2 and No . 3

Submission of Envelopes No. 2 and No. 3 will be held before the Committee and in the presence of a Notary Public, on the date indicated in Section 1.6 and in the place and time specified by Circular Letter.

At the ceremony for submission of Envelopes No. 2 and No. 3, Envelope No. 2 shall be opened, leaving Envelope No. 3 under the Notary Public’s custody until the day and time of opening. Only Qualified Bidders may submit Envelopes No 2 and No 3.

4.1.3 Opening of Envelope No. 3

Opening of Envelope No. 3 shall be carried out before a Notary Public, in the place and time to be specified by Circular Letter on the date indicated in Section 1.6. Only Envelopes No. 3 which corresponds to the Bidders who have submitted Envelope No. 2 will be opened and, where appropriate, who have corrected to the satisfaction of the Committee, the observations made to the contents of such Envelope and which Technical Proposals have been declared valid pursuant to the provisions of Section 8.2.4 of the Bidding terms.

4.1.4 Submission of Envelopes by Authorized Agent or Lega l

Representative

Envelopes No. 1, No. 2 and No. 3 may only be submitted personally by one of the Authorized Agents or by the Legal Representative of the Bidder.

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Documents sent via postal mail, fax or any other means of communication shall not be accepted or received.

4.2 Language

Unless expressly stated otherwise in these Bidding Terms, all documents must be submitted in Spanish or accompanied by a translation into Spanish. Should there be any discrepancy between the texts in both languages, text in Spanish shall prevail. If one of the envelopes contains brochures or catalogs in a foreign language not required in the Bidding Terms, the Committee may request a translation into Spanish for a better understanding.

4.3 Original Documents and Copies

The documents forming part of Envelopes No. 1, No. 2 and No. 3 shall be submitted in original and two (2) copies duly labeled as "Original", "Copy 1" and "Copy 2" on the first page. Copies will not require notarial or consular legalization.

4.4 Method for Submission of Envelopes No. 1, No. 2 and No .3 4.4.1 Envelopes should be submitted properly closed and clearly labeled on

the obverse with the following information: "Envelope No. 1", "Envelope No. 2" or "Envelope No. 3" respectively; and the name of the Bidder.

4.4.2 All documents submitted in Envelopes must be clearly legible,

correlatively foliated signing each page. It should also include an index with a detailed list of all documents included in each Envelope.

4.4.3 In case there is any discrepancy between a figure expressed in numbers and in words, the amount expressed in letters shall prevail.

4.5 Cost of Preparation and Submission

The Acquirer and the Bidder shall bear all direct or indirect costs or expenses incurred in related to the preparation and submission of Envelopes No. 1, No. 2 and No. 3, as applicable. The State of the Republic of Peru or any agency, organism or official thereof, or PROINVERSIÓN, the Committee, the Regional Government its advisors shall not be liable in any way for such costs, regardless of how the Bid is conducted or its outcome.

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4.6 Fee for Right to Participate

In order to participate in the Bid, before submission of Envelope No. 1, the Bidder shall have paid the Right of Participation. The amount of the Participation Fee is set to US$ 2,500 (two thousand five hundred dollars). This amount will not be reimbursed. Upon payment of such right, PROINVERSIÓN shall deliver to the Acquirer the Payment Voucher for the Right to Participate. The Acquirer of the Right to Participate who decides not to participate in the Bid may transfer it to a person in its group or to a third party. For this purpose, the acquirer of such right shall submit a communication in Envelope No. 1 proving the assignment in his favor, with authenticated signature of the transferor.

5. SHORT-LISTING REQUIREMENTS: CONTENTS OF ENVELOPE No.1

Only legal persons or Consortiums may participate in this Public Bid. A legal entity, directly or indirectly, individually or through a Consortium, may not participate in more than one Proposal. If the award is not granted to the Consortium in which it is engaged, it may not join another Consortium or the company incorporated for signing the contract. This obligation also applies to the Building Company. To be declared as short-listed Bidder, a Bidder shall have made the Payment for the Right to Participate in the Public Bid or have acquired through an assignment of rights, the right to participate in the Public Bid, and also provide, through the submission of Envelope No. 1, the information that follows, which shall be considered an Affidavit Statement.

5.1 Overview

The Bidder must demonstrate its commitment to provide reliable information through the submission of Form 1 of Annex No. 3, which shall be considered an Affidavit Statement. This form must contain the authenticated signature of the Bidder's Legal Representative, meeting for such purposes, the formalities prescribed in Section 2.2.3 of these Bidding Terms.

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The Committee reserves the right to verify the accuracy of all the information and documentation submitted by the Bidder during the different stages of the Public Bid, without implying in any way a limitation on the Bidder's responsibility due to possible deficiency or lack of veracity of data or information submitted. The lack of veracity or deficiency in the data or information submitted by the Bidder in this Public Bid entitles the Committee to disqualify the Bidder at any stage.

5.2 Bidder short-listing requirements regarding tec hnical expertise 5.2.1 The Bidder must certify, according to Form 2 of Annex No. 3, that he

himself, one of its members, or a third party to be hired for the purpose, is a Building Company that meets the following technical expertise, implemented during the last fifteen (15) years, calculated from the date of announcement of this Public Bid:

I. Construction of at least fifteen thousand (15,000) meters of tunnel

(s), regardless of the section, diameter or construction method. II. Construction of at least one tunnel with length not less than five

thousand (5,000) meters in rock, with a minimum section of ten (10) square meters, for hydraulic purposes.

III. Construction of dams in accordance with the following

requirements:

a) At least one concrete-faced rockfill dam, CFRD type with filling volume of not less than one and half million (1'500, 000) cubic meters; and

b) One or more dams, which filling volume(s) cumulatively add at least three (3) million cubic meters, regardless of their construction type

IV. Construction of water conveyance and distribution infrastructure for

irrigation, with implementation of at least twenty thousand (20,000) meters of open or closed pipes (concrete-lined canals or pipes or mixed) for a single project, with headwater conveying capacity not less than 20 m3/s.

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Note that in the case of Consortiums the above requirements can be met gathering the experiences of its various Members.

5.2.2 When the Bidder is not the Building Company, it should include one or two Building Companies (which may be its Members or third parties to be hired for this purpose). Should there be a single Building Company, it must demonstrate compliance with all technical expertise outlined in Section 5.2.1. Should there be two Building Companies, one of them must demonstrate the experience mentioned in subsections I, II and IV of Section 5.2.1, consistent with New Works of the Second Stage, while the other Building Company must demonstrate the experience mentioned in subsection III of Section 5.2.1, consistent with New Works of the First Phase. For purposes of the aforementioned, the Building Company(s), through their legal representative(s) shall sign Form 2 of Annex No. 3, which in each case shall also be signed by the Bidder. Additionally, the Building Company (s) and the Bidder must state their express willingness, before the Closing Date, to enter into the corresponding Building Agreements for the complete execution of each of the two (2) Phases of the Concession, pursuant to which the Building Company (s) shall assume joint and several liability with the Bidder for the execution of the work under this agreement, and for that purpose they shall submit a jointly Affidavit Statement with authenticated signatures, according the terms of the template shown in Form 5 of Annex No. 5, as applicable. For purposes of the provisions in Section 5.2.1 above, the supporting documentation and information that corresponds to the Building Company(s) may come from their Related Companies.

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5.2.3 Similarly, the Bidder must have a Works Engineer for each of the Phases of the Concession. In the case of New Works for the First Phase, the Bidder shall certify that the Works Engineer to be submitted, has at least one (1) project experience in conducting or directing the construction of one (1) concrete-faced rockfill dam, CFRD type, whose filling volume is not less than 3'000,000 (three million) cubic meters. In the case of New Works for the Second Phase, the Bidder shall certify that the Works Engineer to be submitted must proove experience in conducting or directing the construction of at least:

� One (1) tunnel with no less than 5,000 (five thousand) meters long in

rock, with a minimum section of 10 (ten) square meters, for hydraulic purposes, and

� One (1) water conveyance and distribution system of at least 20,000

(twenty thousand) meters of open or closed pipes (concrete-lined canals or pipes or mixed) for a single project, with headwater conveying capacity not less than 20 m3/s.

In both cases, Works Engineers must speak fluent Spanish. For this purpose, the Bidder must submit: - Form No. 3 of Annex No. 3.

- A covering letter of each of the Works Engineers, demonstrating their

expertise and their commitment to participate in the works.

Accreditation may be made through the submission of service contracts, certificates or any other document conclusively proving the required experience.

5.3 Legal requirements

Additionally, the Bidder must demonstrate strict compliance with the following legal requirements:

5.3.1 That the Bidder is a legal entity or a Consortium, fulfilling this

requirement by submitting the following:

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- Certified copy of the Bidder’s articles of incorporation. In case of a Consortium, a certified copy of the articles of incorporation of each of its members will be required.

- An Affidavit Statement signed by the Bidder’s Legal Representative in case of a legal entity, confirming its existence, in accordance with the legal principles that are applicable under their law of origin, drawn up according to the template shown as Form 1 of Annex No. 4.

In case the Bidder is a Consortium, in addition to the obligation of submitting Form 1 of Annex No. 4 regarding each of its Members (with their respective legal representatives’ authenticated signatures), the Bidder must submit an Affidavit Statement signed by its Legal Representative and by the legal representatives of each of the Members, confirming their existence and the members’ joint and several liability with respect to the obligations undertaken and Affidavit Statements submitted, pursuant to the template attached as Form 2 of Annex No. 4.

- An Affidavit Statement, according to the template which appears as Form 3 of Annex 4 signed by the Bidder’s Legal Representative, indicating the percentage of participation in the Bid that corresponds to each of its shareholders or partners. In the case of Consortiums, such information will also be required for each one of its Members, except for the Building Company as appropriate.

5.3.2 That the Bidder or any of its Members has incorporated as the Acquirer, having paid the Right of Participation or having acquired this right through a transfer of rights. To prove this fact, submission of a simple copy of Proof of Payment for the Right of Participation in the Public Bid shall suffice or the communication in which the transfer is credited in its favor, as appropriate. Additionally, an Affidavit Statement explaining the binding relationship between the Bidder and the Acquirer, as outlined above.

5.3.3 That the Bidder has a Legal Representative in accordance with the

requirements of Section 2.2, certifying this through the submission of a certified copy of the corresponding power of attorney.

5.3.4 That the Bidder, its shareholders or partners or its Members and

shareholders and partners of the latter, if the Bidder is a Consortium: i) are not administratively sanctioned with temporary or permanent disqualification from the exercise of their rights to participate in selection processes convened by State agencies of the Republic of Peru, or to enter into contracts with the State of the Republic of Peru, ii) have not

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ceased to be concessionaires for breach of a concession agreement signed with the State of the Republic of Peru, signed under the framework of the private investment promotion process referred to under Legislative Decree No. 1012 - Framework Law on Public - Private Partnerships, the Single Revised Text (TUO) of concessions approved by Supreme Decree No. 059-96-PCM or Law No. 28059 - Framework Law on Decentralized Investment Promotion.

Once the project has been awarded, such requirements must be met in turn by the concession partnership signing the Contract. Furthermore, Bidders shall not be those listed within the scope of Article 1366º of the Civil Code. For this purpose, it will be necessary that the Bidder subscribes, through its Legal Representative, an Affidavit Statement according to the template attached as Form 4 of Annex 4.

5.3.5 That the Bidder, its shareholders or partners or its Members and

shareholders and partners of the latter, if the Bidder is a Consortium have agreed not to invoke or exercise any privilege or diplomatic immunity or other, or complain through diplomatic channels and any claim that may be invoked by or against the State of the Republic of Peru or its agencies; the Regional Government; PROINVERSIÓN, the Committee, its members and advisors, under Peruvian law or under any other law with respect to its obligations under these Bidding Terms, the Economic Proposal, Technical Proposal and the Contract. For this purpose, it will be necessary that the Bidder subscribes, through its Legal Representative, an Affidavit Statement according to the template attached as Form 5 of Annex 4.

5.3.6 That the Bidder's advisers have not provided any direct services to

PROINVERSIÓN or the Committee during the development of this Public Bid, whether full time, part time or temporarily. To prove this fact, an Affidavit Statement shall suffice to that effect, duly signed by the Bidder's Legal Representative and drawn up according to Form 6 of Annex 4.

5.3.7 That the Bidder, its shareholders or partners or Members as well as shareholders and partners of the latter, if the Bidder is a Consortium have no direct or indirect participation with any other Bidder. To prove this fact, an Affidavit Statement shall suffice to that effect, drawn up according to Form 7 of Annex 4 and duly signed by the Legal Representative.

In the case of companies that have their shares listed on stock exchanges, the participation referred to in the preceding paragraph shall

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be limited where administration control of another Bidder it exercised, or any of its members in case of a Consortium, pursuant to the provisions of the Regulations on Indirect Property, Affiliation and Economic Group approved by CONASEV Resolution No. 090-2005-EF/94.10 or legislation replacing it. To prove this fact, an Affidavit Statement shall suffice to that effect, drawn up according to Form 8 of Annex No. 4, duly signed by the Legal Representative.

5.3.8 Commitment of Incorporation

5.3.8.1 The Bidder and each of its Members, in the case of a Consortium must submit an Affidavit Statement stating their intention to incorporate a concession partnership in Peru with fully subscribed share capital, equal to 10% (ten percent) of the Referential Investment Amount, of which, 25% (twenty five percent) shall be paid to the date of incorporation of the concession partnership, according to legal rules in force, if awarded the Project, with the same partners, shareholders or members and in the same proportions as those kept in the Bidder or the Consortium on the date of Project award.

Such Affidavit Statement(s) shall be submitted with authenticated signatures, according to the terms of the template shown in Form 1 of Annex No. 5.

5.3.8.2 In the shareholding structure of the Concessionaire, the

Strategic Investor shall own and keep a stake of at least 35% (thirty five percent) of the Concessionaire’s share capital (minimum participation).

5.3.8.3 The Strategic Investor shall own and maintain its minimum

participation from the date of the Concessionaire’s incorporation and at least for the duration of the Construction and Post-Construction periods, being unable to transfer or assign it resulting in a smaller participation to that established in the preceding section.

5.3.8.4 After the Post-Construction Period has been concluded,

another investor meeting the requirements of the Strategic Investor may be in charge, under the conditions set forth in the Contract.

5.4 Financial Requirements

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The Bidder must demonstrate strict compliance with the following financial requirements:

5.4.1 The Bidder or its Members, in case of a Consortium shall have a minimum net worth equivalent to US$ 240'000, 000.00 (two hundred forty million and 00/100 Dollars) in the last completed fiscal year, which must be certified through the corresponding audited financial statements. Additionally, the audited financial statements of the two (2) years prior to that required in the previous paragraph must be submitted. For this purpose, the Bidder must provide either its own financial figures or those of its Members, or those of its shareholders or partners, or those of its Related Companies(s). Information relating to companies incorporated during the last two (2) years (2011 and 2012) shall not be taken into account. For its part, the Strategic Investor must prove at least 50% (fifty percent) of the amount of equity required.

5.4.2 The financial information referred to in Section 5.4.1 may be submitted in Spanish or in English, requiring no translation in the latter case and submitted according to Form 2 of Annex No. 5 and its sections, signed by the Legal Representative.

5.4.3 A letter of reference shall be included issued by Banking Company or an International Financial Entity referred to in Appendices 1 and 2 of Annex No. 2 of the Bidding Terms, indicating the creditworthiness and current financial situation of the Bidder which shall be attached in original as part of the documents to be submitted. Letters of Reference may be issued in favor of the Bidder, any of its Members, in case of Consortium, its shareholders or partners or Related Companies.

5.5 Verification of information submitted to the Co mmittee

From the submission of the documentation referred to in Section 5 and up to the Closing Date, the Bidder agrees to make available to the Committee all documents as requested by the latter, in order to check the veracity of the documentation submitted, pursuant to such Section.

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6. SUBMISSION OF ENVELOPE No.1 AND SHORT-LISTING RE SULTS 6.1 Submission of Envelope No. 1

Bidders must request the Committee to set a date and time to formally submit Envelope No. 1, within the period specified in Section 1.6. In each case, Envelope No. 1 shall be received and opened in the presence of a Notary Public. Minutes shall be recorded on the Bidder’s submission and the number of pages of documents included in the envelope. The minute referred to in the preceding paragraph shall include the acceptance or rejection, as appropriate, of requirements described in Sections 5.2, 5.3 and 5.4 of the Bidding Terms, as well as the observations made by the Bidder and the content of Envelope No. N° 1 submitted at the time. After the Opening Act of Envelope No. 1 no information concerning the short-listing process shall be provided to the Bidder or any person directly involved therein, until the Bidder has been notified.

6.1.1 Notification and remedy of observations to Envelope No. 1

If errors are found during the evaluation process of Envelope No. 1, that in the opinion of the Committee are rectifiable, the Bidder shall be required to remedy or comply with the observations within five (5) days following such request, under penalty of being excluded from the classification. Additionally, in order to facilitate the review, verification and comparison of data and requirements, the Committee may request any Bidder for clarification of information contained in Envelope No. 1, without being subject to any modification in its contents. The request for clarification and the corresponding response shall be delivered in writing, in accordance with the provisions of the preceding paragraph.

6.1.2 Announcement of Short-listed Bidders

Within the time limit referred to in the Schedule, the Committee will review the documentation contained in the Envelope No. 1 and issue its decision, determining the Qualified Bidders who shall participate in the following stages of the process.

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The Committee, through Circular Letter shall notify the result of the short-listing process on the date indicated in Section 1.6. The decision of the Committee regarding the Short-listing process shall be final and not open to challenge.

6.1.3 Inclusion of new Members to a Qualified Bidder

In the event that a Bidder who has already been qualified decides to incorporate a new Member to establish or expand the creation of a Consortium, such Bidder shall amend the documents of Envelope No. 1, reformulating them with technical, legal and financial information related to the intervention of the new Member and the formation of the Consortium, in such a way that it can meet the requirements of the prequalification process, according to the conditions set out in the Bidding Terms. The deadline for the exercise of this right shall expire after ten (10) Days prior to the date of announcement of Qualified Bidders. For the submission and verification of the appropriate amended documentation, the Bidders shall submit Envelope No. 1 within an individual appointment in the place, date and time indicated for each of them. In each case, Envelope No. 1 shall be received and opened in the presence of a Notary Public, preparing a minute which will record the submission of the relevant Bidder and the amount of pages of the documentation included in the Envelope. In the minute referred to in the preceding paragraph, acceptance and rejection shall be recorded, as applicable, of the requirements set forth in Sections 5.2, 5.3 and 5.4 of the Bidding Terms, of observations made by the Bidder and the contents of Envelope No.1 submitted on that occasion. If case of any deficiencies found in any of these documents, the Committee will urge the Bidder to remedy the deficiency of the document within the following five (5) Days. Within three (3) Days following the expiry of the period referred to in the preceding paragraph, the Committee shall issue a new qualification announcement, considering the changes made in the Bidder’s proposal.

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7. CONTENTS OF ENVELOPES No. 2 and No. 3 7.1 Contents of Envelope No. 2

The Contents of Envelope No. 2 shall observe provisions in this Section, as stated below:

7.1.1 Affidavit Statement

The Bidder shall submit a Affidavit Statement, conforming to the template No. 4 shown in Annex No. 5, stating the following:

7.1.1.1 That information, statements, certification and generally all

information submitted in Envelope No. 1 remains in effect to date and will remain in the same way until the Closing Date.

7.1.1.2 That the Qualified Bidder or its Members are not directly or

indirectly involved with another Qualified Bidder or Member thereof.

7.1.2 Contract

7.1.2.1 Short-listed Bidders must submit two (2) copies of the final version of the Contract, duly signed in each of its pages by the Legal Representative.

7.1.2.2 The amounts that are necessary to include in the Contract should

not be included in the text thereof; these will be included in the Closing Date based on the Economic Proposal of the Bidder awarded the Project.

7.1.3 Guarantee of Validity, Validity Term and Seriousness of the Economic

Proposal

7.1.3.1 The Bidder shall ensure the validity, validity term and seriousness of the Economic Proposal, submitting an irrevocable and unconditional joint and several liabilities, without benefit of excussion or division and of automatic execution in favor of PROINVERSIÓN, pursuant to provisions of the following Section.

7.1.3.2 The Guarantee will be provided through a Letter of Guarantee

submitted according to the terms of the template included as Form No. 1 of Annex No. 5.

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Alternatively, a stand-by letter of guarantee may be accepted which may take the formalities used by the bank carrying out the transaction, provided it complies with the requirements specified in Form 3 of Annex No. 5, issued by an International Financing Entity and confirmed by a Bank.

7.1.3.3 The guarantee must be issued by a Bank or an International

Financing Entity, mentioned in Appendices 1 and 2 of Annex No. 2 of these Bidding Terms.

Such Guarantee shall be in effect for 120 (one hundred and twenty) calendar days from the date of submission of the Economic Proposal. The Committee may require an extension of this compulsory guarantee and Qualified Bidders must renew it for the aforementioned time period.

7.1.3.4 The amount of the Guarantee shall be expressed in US $

___________ (_____ million dollars). For the purposes of complying with the provisions herein stated, it will be possible to submit two or more guarantees totaling the full amount required by this Section, provided that each of these individual guarantees complies with all requirements listed in Section 7.1.3 of Form No. 3, Annex No.5.

7.1.3.5 Once the award has been declared, the Committee may execute

the Guarantee of Validity, Validity Term and Seriousness of the Proposal submitted if the Successful Bidder fails to meet the obligations for reasons attributable to it established in the Closing Date and stated under Sections10.2.1, 10.2.2 and 10.2.6 of these Bidding Terms.

7.1.3.6 The Guarantee submitted by a Qualified bidder not awarded the

contract will be returned after fifteen (15) Days following the Closing Date.

7.1.4 Technical Proposal

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7.1.4.1 The Technical Proposal shall be made based on the technical information available and in accordance with the criteria adopted by the Qualified Bidder, strictly observing the conditions set out in the Terms of Reference which are included as Annex No. 9 and other contents of these Bidding Terms.

7.1.4.2 Proposals submitted by Qualified Bidders should not have errors

or amendments; they shall contain a description of the proposed solutions and critical activities properly scheduled.

7.1.4.3 In evaluating the Technical Proposals submitted by the

Qualified Bidders, the Committee will determine if they satisfactorily meet the minimum content requirements listed in this document, and will be evaluated on the basis of the quality of the following Technical Proposal documents:

• General Approach • Detailed Analysis • Support for proposed solutions • General Work Plan • Work Plan Disaggregated in Phases

Both the General Approach and detailed analysis by Phases will be developed according to the guidelines and level provided under the Terms of Reference set out in Annex No. 9.

7.1.4.4 The Qualified Bidder shall submit a Work Plan, separating work

schedules for the First Phase and the Second Phase, covering the Concession period indicating the conceptual development and scope of its Proposal for the implementation and operation of the Concession, within the field of construction and operation, the main features of the works and equipment, construction procedures and technologies proposed for the implementation and subsequent operation of the Works.

7.1.4.5 Also, the Qualified Bidder will include the respective Investment

Schedules by Phases, considering that the First Phase will be fully paid with Co-financing and that the Second Phase will be funded by the Concessionaire. The Investment Schedules will be consistent with the work plans by Phases.

The Investment Schedule of Phase Two will be structured so that its programming and execution permanently and proportionally involve: i) the contribution of the Concessionaire’s shareholders; ii) the Indebtedness funds.

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7.1.4.6 The respective General Work Plan and Schedule by Phases must be submitted in detail so that the Technical Proposal enables to fulfill the requirements, investments, goals and deadlines set out in the Contract.

The General Work Plan should include the organizational aspects development of the construction of the Works and the formulation of the Operation and Maintenance Program of all major hydraulic system of the Chavimochic Project.

7.2 Contents of Envelope No. 3: Economic Proposal

7.2.1 Short-listed Bidders shall submit the following in Envelope No. 3 :

7.2.1.1 The Economic Proposal in accordance with Annex No. 6, which will be evaluated in accordance with the formula set forth in Section 1.2.68.

7.2.1.2 The Economic Proposal shall remain effective until at least ninety (90) calendar days after the Closing Date, even if such Economic Proposal has not been awarded the Project. Economic Proposals with lesser validity will be deemed legally null and void. The Committee may provide for the mandatory extension of the Economic Proposal.

7.2.1.3 For the purposes of this Bid, the submission of Envelope No. 3 by a Qualified Bidder constitutes an irrevocable Economic Proposal that involves the subjugation, without exception, of the Qualified Bidder to all terms and conditions in the Contract and to that established in its Economic Proposal.

8. RECEPTION OF ENVELOPES No. 2 and No. 3, OPENING AND

EVALUATION OF ENVELOPE No. 2

8.1 Reception of Envelopes No.2 and No. 3 and Openi ng of Envelope No. 2

8.1.1 PROINVERSIÓN with the approval of the Committee shall constitute an

Evaluation Committee for Technical and Economics Proposals (hereinafter, the "Evaluation Committee"), before the date of submission of Envelopes No. 2 and No. 3. The Regional Government will participate in this committee with two duly authorized representatives.

8.1.2 To fulfill its objectives, the Evaluation Commission will be assisted by a

panel of experts in technical areas contained in the Technical Proposals, to be hired for this purpose.

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8.1.3 Delivery and receipt of Envelopes No. 2 and No. 3 will be held on the date stated in Section 1.6, according to the general rules laid down in Section 4 of these Bidding Terms, in the presence of the Committee, the Evaluation Commission and a Notary Public. The Committee, through Circular Letter, shall determine the place and time of submission of Envelopes No. 2 and No. 3; without prejudice to the foregoing, the Committee shall grant a thirty (30) minute window for the start of the act of submission and reception of envelopes containing the Technical and Economic Proposals.

If all Qualified Bidders are present before the expiry of tolerance, the Committee may initiate the ceremony and reception of Envelopes No. 2 and No. 3.

8.1.4 The Notary Public will receive Envelopes No. 2 and No. 3 of the Qualified

Bidders, in the same order in which they were qualified. 8.1.5 If during the ceremony and reception of Envelopes No. 2 and No. 3, no

Bidders are present or only one Bidder attends, the Committee shall void the Bidding process.

8.1.6 If two (2) or more bidders submit Envelopes No. 2 and No. 3 for, the

Notary Public shall open Envelopes No. 2 in the same order in which they were qualified.

8.1.7 Once Envelopes No. 2 have been opened, the Notary Public shall sign and seal all pages of the documents contained therein and will deliver them to the Committee and the Evaluation Committee, for evaluation pursuant to provisions in Section 8.2.

8.1.8 Envelopes No. 3 will not be opened and will remain in custody of the

Notary Public to the date the Opening of Envelope No. 3 and Contract Award.

8.1.9 After the ceremony, the respective minute will be written by the Notary

Public and will be signed by the President of the Committee or its deputy, by the members of the Evaluation Committee and the Short-listed Bidders who wish to do so.

8.2 Content of the Evaluation of Envelope No. 2

8.2.1 If the Evaluation Commission determines that there are rectifiable

defects on any of the documents contained in Envelope No. 2, with the exception of the Technical Proposal itself, it shall communicate this fact

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to the Committee so as to bring it to the attention of the Qualified Bidder who will have three (3) Days to remedy the defects incurred. Failure to submit any of the documents that must be contained in Envelope No. 2 shall under no circumstances be considered a defect to be remedied.

8.2.2 Technical Proposals will be reviewed by the Evaluation Commission. To

this end, the Evaluation Commission will prepare a report with its recommendations to the Committee on the admission or not of the Technical Proposals submitted by the Qualified Bidders.

8.2.3 If the Committee, directly or upon recommendation of the Evaluation

Commission effected a comment to the Technical Proposal contained in Envelope No. 2, the Bidder shall have two (2) Days before the date of announcement of the evaluation results of Envelope No. 2 to clarify the Committee's observation without such clarifications implying or meaning any change or variation to the Technical Proposal submitted.

8.2.4 The evaluation of the Qualified Bidders’ Technical Proposals shall not be

scored. These will be declared technically valid when at the Committee’s criteria and by recommendations made by the Evaluation Commission the technical design is deemed consistent and meets the minimum conditions laid down in Section 7.1.4, Annex No. 9 these Bidding terms.

8.2.5 The results of the evaluation of Technical Proposals will be recorded in an assessment record which shall be signed by the members of the Evaluation Committee and delivered to the Committee for the final decision. Only Bidders submitting proposals that are technically sound and have complied with attaching the documents mentioned in Section 7 will go on to the next stage of the Bid, which is the opening of Envelope No. 3.

8.2.6 After the deadline for the evaluation of Envelopes No. 2, the Committee shall convene a new public act on the date stated in Section 1.6, in order to inform the Qualified Bidders the evaluation results of Envelope No. 2 and the list of Qualified Bidders declared fit to proceed in the Bid and proceed with the opening act of Envelopes No. 3 and Award the Project, as provided in Section 9 of these Bidding Terms.

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The opening of these envelopes will be carried out in the order indicated in Section 8.1.4.

8.2.7 The Committee's decision on the results of the evaluation of Technical Proposals is final and shall not give rise to any claim or dispute by Short-listed Bidders.

9. OPENING OF ENVELOPE No. 3 AND CONTRACT AWARD 9.1 Opening and Evaluation of Envelope No. 3 9.1.1 At the date specified in Section 1.6 of these Bidding Terms, the

Chairman of the Committee or its deputy will announce the list of Qualified Bidders that were declared fit to move forward in the Bid.

9.1.2 In the case of Qualified Bidders whose Technical Proposals were not

considered technically valid, the Notary Public will returned Envelopes No.3 unopened to such Bidders, noting that they have not been opened.

9.1.3 Immediately after that, the Notary Public shall open Envelopes No.3 of

Qualified Bidders whose Technical Proposals have been declared technically valid, and will read its content, identifying the Bidder of each Economic Proposal. The opening of these envelopes will be carried out in the same order the Bidders were evaluated.

9.1.4 Once Envelopes No. 3 have been opened, the Notary Public shall sign

and seal all pages of the documents contained therein and will deliver them to the Committee and the Evaluation Committee, for evaluation pursuant to provisions in these Bidding Terms.

9.1.5 If the Evaluation Commission determines that any of the Economic Proposals do not meet the requirements of these Bidding Terms, such Economic Proposal will be declared invalid. Also, unless there are at least two (2) valid Economic Proposals, the Committee shall void the Bidding process.

9.1.6 After that, those valid Economic Proposals submitted in accordance with

the provisions of Annex 6, will be announced identifying the Bidder of each Economic Proposal.

9.1.7 After opening Envelopes No. 3, the Evaluation Commission will verify

that COo values for RPIo and for RPMOo, forming part of the Economic Proposals, are valid, i.e., that they are equal values or below the amounts corresponding to COMAX, RPIMAX and RPMOMAX, respectively.

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9.1.8 Next, the Evaluation Commission shall determine the Lowest Economic Proposal, applying the formula set forth in Section 1.2.68.

9.1.9 Once the value of each valid Economic Proposal has been obtained, the

Evaluation Committee shall report the results to the President of the Committee or his deputy, who shall proceed to make public, one by one, the values of Economic Proposals determined by the Evaluation Committee.

9.1.10 The Qualified Bidder who submits the Lowest Economic Proposal, as

defined in these Bidding Terms shall be the Successful Bidder. 9.1.11 The following shall be carried out in case of a tie in Economic Proposals:

9.1.11.1 Qualified Bidders who tied will have a term of up to two (2) hours to submit a new Economic Proposal which shall be less than the initial proposal according to Annex No. 6, signed by the respective Legal Representative. If there is still a tie, one (1) additional hour will be granted to submit a new Economic Proposal which shall be even less than the previous proposals. If despite this, the tie subsists, the project will be awarded by drawing lots conducted by the Notary Public in the act, according to the mechanism at that time established by the Committee.

9.1.11.2 Any new Economic proposal resulting from a tie must

necessarily improve the offer previously submitted. In case any Short-listed Bidder does not submit a new Economic Proposal, the project shall be granted to the Bidder who submitted an improved Economic Proposal regarding its previous proposals.

9.2 Challenge 9.2.1 Project Award Challenge Procedures

Any short-listed Bidder may lodge a legal challenge before the Committee against the award of the Contract. To that effect, the Bidder shall state as a remark in the notary record of the Opening Act of Envelope No. 3 its intention to lodge a challenge. Such challenge must

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be duly supported, in writing, within a maximum period of eight (08) days starting from the day following the award of the Contract. The Committee shall resolve that challenge within a maximum period of ten (10) Days from the date the challenge was lodged.

9.2.2 The affected Bidder may file an appeal against the Committee’s decisions within three (03) Days following the date of receipt.

The appeal may also be filed against the denial by default of the petition to challenge in the case the committee has not issued the corresponding resolution after the deadline of ten (10) days to address the challenge have expired. In the latter case, the 3-day deadline for filing the appeal shall commence on the day following the expiry of the mentioned period of ten (10) days.

9.2.3 The appeal filed against the expressed or by default decision of the

Committee shall be resolved by PROINVERSIÓN’s Steering Council within a period not exceeding thirty (30) days from the date of its filing. The resolution on second and last instance shall be final and binding.

9.3 Challenge Bond 9.3.1 Challenges lodged shall be invalid and will have no effect unless, within

three (03) days following the date of the Award, the Bidder provides the Committee with a several, irrevocable, unconditional bank guarantee, without the benefit of excussion or division and of automatic execution according to Annex No. 7 in favor of PROINVERSIÓN. Such bank guarantee shall be issued by a Bank or International Financing Entity from the list in Appendices No. 1 and 2 of Annex No. 2 of these Bidding Terms, and the amount will be equal to 1% (one percent) of the Referential Investment Amount.

9.3.2 This challenge bond may be enforced by PROINVERSIÓN in case the

appeal filed is declared unfounded or inadmissible or in the event that the appeal was not filed within the period specified in Section 9.2.2.

9.3.3 The challenge bond shall be in force for a period not less than sixty (60)

Days.

9.3.4 If the challenge or appeal filed is declared founded, the challenge bond will be returned to the respective Bidder, without earning any interests in his favor.

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9.4 Bidding Process declared void

The Committee shall declare the Bidding process void in any of the following cases:

i. If the ceremony and reception of Envelopes No. 2 and No. 3 is attended only by one Bidder or no Bidders at all; or

ii. Unless two valid (2) Economic Proposals have been received.

9.5 Suspension

The Public Bid may be suspended or terminated or rescinded at any time and without expressing any cause, if the Committee deems appropriate without incurring in obligations. This decision cannot be challenged.

10. CLOSING PROCEDURE 10.1 Closing Date

The Closing Date will be that stated under Section 1.6, at the place and time to be specified by Circular Letter and will be held in the presence of a Notary Public, who shall certify the acts referred to in Section 10.2. Legal costs shall be borne by the Successful Bidder.

10.2 Closing Procedure

Until or on the Closing Date, as appropriate, the following acts shall have been verified:

10.2.1 The Successful Bidder shall deliver the following documents on the Closing Date:

10.2.1.1 As provided in Section 5.3.8, the Successful Bidder must show

proof of enrollment in the Registry Office of the legal entity statutes which will sign the Agreement.

10.2.1.2 Evidence of power of attorney of the person who will sign the contract on behalf of the Concessionaire, with proof of enrollment in the relevant Registry Office;

10.2.1.3 The Successful Bidder shall submit, regarding the company and the Members of the Consortium, as appropriate, proof of not being disqualified to participate in the selection process or to

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sign contracts with the State issued by the Supervisory Agency of State Procurement - OSCE.

10.2.1.4 If information submitted is proved to be false, the award will be cancelled and provisions provided in Section 10.3 shall apply.

10.2.1.5 Performance Bond of the Concession Agreement through a bank letter of guarantee in accordance with Annex No. 2, issued by a Bank or International Financial Entity, referred to in Appendices 1 and 2 of Annex No. 2, which must be several, unconditional, irrevocable, without benefit of discussion or division and automatically enforceable, in effect for one (1) year from the Closing Date, which will be renewed annually to be kept in force, according to the following scheme:

- For an amount equal to 5% (five percent) of the

Referential Investment Amount from the Closing Date until the last day of the Initial Period.

- For an amount equivalent to 10% (ten percent) of the Referential Investment Amount from the date of the Construction Period until the date of delivery of the Commissioning Certificate.

- For an amount equivalent to 10% (ten percent) of the Referential Investment Amount for the period of five years after the end of Main Construction Period (Post-Construction Period).

- For an amount equal to 5% (five percent) of the Referential Investment Amount, from the end of the Post-Construction Period and until the end of the term of the Concession. Alternatively, a stand-by letter of credit may be accepted, which may take the formalities used by the bank carrying out the transaction, provided it meets the requirements listed in Annex No. 2 and is issued by a First Category Foreign Bank and confirmed by a Local Bank.

10.2.1.6 If the Concessionaire and Construction Company are not the same legal person, the Concessionaire shall submit evidence of each of the Construction Company contract deeds entered into with the Construction Company and whereby it assumes the liability of the corresponding New Works. Such contracts must additionally contain international terms and conditions used in

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this type of transactions, in correspondence with the Peruvian legislation on the subject.

10.2.1.7 Such construction contracts shall include but not be limited to clauses relating to: (i) the Construction Company’s ability to perform the contract and assume joint liability for New Works, (ii) the signing of construction contracts which must have been duly authorized by the relevant Construction Company’s corporate bodies, and that its representative has sufficient authority to do so, (iii) the inclusion of representations and guarantees and other matters set out in Form 6, Annex 5 to these Bidding Terms, and (iv) the other terms and conditions customary in this type of contract.

10.2.1.8 Minutes from construction contracts must be made known to PROINVERSIÓN at least 20 (twenty) days prior to the Closing Date, for the corresponding approval.

10.2.1.9 A proposal regarding insurance policies and a list of companies in the sector that will cover such insurance, in accordance with the provisions of the Concession Contract.

10.2.2 Once documents mentioned in Section 10.2.1 have been verified, the

Grantor and the Concessionaire shall proceed to sign the Concession Contract.

10.2.3 PROINVERSIÓN shall reimburse the Successful Bidder the Guarantee

of Validity, Validity Term and Seriousness of the Economic Proposal. 10.2.4 If appropriate, Legal Stability Agreements will be signed pursuant to

Legislative Decrees No. 662 and No. 757 and its amendments, to the extent that the Successful Bidder or any of its Members comply with the provisions of current regulations.

10.2.5 The enactment of Supreme Decree that provides by contract, the

guarantee by the State supporting statements, securities and obligations assumed by the Grantor, established in the Concession Agreement.

10.2.6 The Successful Bidder or the legal entity incorporated for the purpose, shall pay on the Closing Date the amounts referred to in Sections 11.3 and 11.5 of these Bidding Terms by cashier's checks made out to PROINVERSIÓN, which shall be issued by any of the banks listed in Appendix 2 of Annex No. 2.

It will also pay directly to the Chavimochic III Consortium, the corresponding success fee established in the service agreement signed

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with PROINVERSIÓN service, which will be determined according to the following:

- If there are two (2) valid Economic Proposals: US$ 102,668.58

(one hundred and two thousand six hundred sixty-eight with 58/100 Dollars) including VAT; or

- If there are three (3) or more valid Economic Proposals: US$ 176,003.28 (one hundred and seventy-six thousand and three with 28/100 Dollars) including VAT.

Such payment shall be made by cashier's check made out to Chavimochic III Consortium and issued by any of the banks listed in Appendix 2 of Annex No. 2.

10.3 Enforcement of the Guarantee of Validity, Vali dity Term and Seriousness of the Economic Proposal

10.3.1 In case of breach by the Successful Bidder preventing the performance

of the events planned for the Closing Date, PROINVERSIÓN may enforce the Guarantee of Validity, Validity Term and Seriousness of the Economic Proposal, immediately and without notice to the Successful Bidder. The enforcement of this guarantee does not limit or restrict any other rights PROINVERSIÓN may have against the Successful Bidder that breached its obligations with respect to its proposal.

10.3.2 The Committee shall have the right, but not the obligation, in the event of

default by the Successful Bidder, to accept the proposal of another Bidder with the second best Economic Proposal. In such case, the Committee shall notify the Bidder holder of such proposal, communicating its decision to name it the new Successful Bidder, informing also the closing procedure and the date, time and place in which this will take place.

10.3.3 Without prejudice to the provisions of Section 10.3, PROINVERSIÓN

and/or the Committee may initiate any legal action pursuant to Applicable Laws resulting from the direct or indirect breach of the original Successful Bidder.

10.4 Entry into Force of the Concession Contract

The Agreement shall enter into force and shall take full legal effect on the Closing Date, after being signed by the Concessionaire’s Legal Representative and the Grantor’s representative duly accredited.

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The Closing Date shall be identified for all purposes as the date on which the Agreement is signed.

11. FINAL PROVISIONS 11.1 Applicable Laws

These Bidding Terms, the documents that make up the Circular Letters and the Agreement shall be governed by and construed in accordance with Applicable Laws.

11.2 Jurisdiction and competence 11.2.1 The Acquirers, Qualified Bidders and the Consortium members, and the

Successful Bidder, irrevocably submit and accept the jurisdiction and competence of the courts and tribunals of the city of Lima, Peru, to resolve any conflicts that may arise between them with respect to these Bidding Terms, expressly and irrevocably waiving any diplomatic claim as well as all rights to take action of any kind in any other jurisdiction.

11.2.2 No provision will apply that may modify, alter or limit the right of the State

of the Republic of Peru, PROINVERSIÓN, the Committee and the Regional Government to initiate any legal action or to enforce a judgment obtained in Peru, before the judges and courts of other jurisdictions, and the Acquirers, the short-listed Bidders, the Consortium members, the Successful Bidder and the Concessionaire waive the right to invoke or exercise any immunity or privilege to which they may be entitled in such jurisdictions, without reservation or limitation, accepting from now on and for the mere fact of participating in the Bid the choice of jurisdiction or alternative jurisdictions dictated by the State, PROINVERSIÓN, the Committee and the Regional Government as appropriate.

11.3 Contribution to FONCEPRI

In accordance with the provisions of Supreme Decree No. 021-98-PCM, the Successful Bidder shall make a contribution to FONCEPRI, in the amount of $ _____ (_______ Dollars).

11.4 Environment

The Project has environmental impact studies that are available in the Data Room. Any necessary updates or supplementation shall be carried out on the Concessionaire’s account.

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11.5 Expense reimbursement of the Process

The Successful Bidder or the legal entity incorporated for that purpose shall reimburse PROINVERSION as of the Closing Date, an amount including VAT for expenses incurred in preparing the process, which amount shall be timely communicated by the Committee through a Circular Letter.

11.6 Preliminary report of the General Comptroller of the Republic

These Bidding Terms and the Agreement resulting from this process will include relevant aspects of the report, if any, issued by the Comptroller General of the Republic, as applicable, pursuant to subsection l), Article 22º of Law No. 27785 which reads:

“Article 22º.- Powers The following are the Comptroller’s powers: l) Previously inform on operations, deposits, endorsements and

other guarantees granted by the State, including the draft contract, which may compromise in any way its credit or financial capacity, whether it has to do with carrying out negotiations in the country or abroad”.

________________

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ANNEX No. 1

CONFIDENTIALITY AGREEMENT Reference: Subparagraph 1.2.1 and 3.3 of the Bidding Conditions

Lima, ..................., 2013 Sirs PRO INTEGRACIÓN Committee By Hand.- Acquirer and/or Bidder: ......................... ...................................(name of the Bidder) duly represented by its ...........................(position of the undersigned), Mr .......................(name of the undersigned), identified by ............, domiciled at ................. does hereby express his/her interest in having access to the Data Room provided by the Committee, we also express our desire to visit the facilities of Chavimochic Project according to the Bidding Conditions of the Comprehensive Project Bid to grant the Concession of Large-Scale Water Works of Chavimochic Project. Regarding this matter, we undertake to maintain full confidentiality in regards to all information obtained in the Data Room, and to not disclose any type of material or information to third parties without previous written authorization of the PRO INTEGRACIÓN Committee, we also undertake to not use this information for any other purpose that is not related to the Bidding process and to not use the information in any way that may cause conflicts of interests in the Government, their employees or dependencies, the Regional Government, PROINVERSIÓN and the Committee. The materials obtained from the Data Room shall only be available to our personnel, executives and consultants for reasons related to the Bidding Process. Said personnel shall be fully acquainted with this agreement and they shall be equally bound to maintain full confidentiality in regards to the previously mentioned information. All actions considered reasonable shall be taken in order to prevent the disclosure of any type of information to any person without previous written consent of the Committee. No license or right has been or shall be granted to our advisors in regards to the availability of any type of information comprised in this agreement. We accept that neither the Government, nor their employees or dependencies, nor the Regional Government, nor PROINVERSIÓN, nor the Committee, their advisors or members are admitting or guaranteeing, expressly or implicitly, the accuracy, reliability or entirety of the available information and that none of this parties or their corresponding Directors, Employees, Workers, or

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Representatives shall be responsible before us or before any other person as a consequence of the use of said information and/or materials. We accept to make our own decisions in regards to the available information and we acknowledge that we shall not depend or be induced by said information when deciding our intent in regards to the Bidding process. We accept that no provided information, no material, discussion, negotiation and other related issues constitute an offer by the Committee or on their behalf, and they shall not serve as foundation or be considered related to any agreement, except when expressly agreed in writing by the Committee. Upon request of the Committee, we accept to immediately return all copies of the documents provided to us or to our representatives or advisors. We also accept that the Committee neither commits nor undertakes to provide access to additional information or update the available information and materials or correct any inaccuracy that may arise. This agreement shall not be applied to information that: (i) at the moment of being disclosed to us or to our advisors was of public knowledge or may become public knowledge at any moment from said opportunity (excepting for said information subject matter of the non-compliance with this agreement by us or our advisors), or (ii) to date, is already legally in our possession and; therefore, is not subject to the confidentiality agreement. The rights and obligations established in this document shall be governed and construed according to the provisions set forth by the Peruvian Laws; and the parties agree to be irrevocably subject to the jurisdiction and competence of the judges and courts of Lima, Peru. As a sign of acceptance and agreement with the terms and conditions of this confidentiality agreement, we sign and submit a copy to the Committee, on ………………., 2013. Authenticated Signature ..................................... Full Name ................................ (Legal Representative of the Bidder and/or Acquirer or Authorized Agent) Entity ................................. (Bidder)

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ANNEX No. 2

SAMPLE OF PERFORMANCE BOND Lima, ……..........., 2013 Sirs REGIONAL GOVERNMENT OF LA LIBERTAD By Hand.- Ref.: Concession Agreement of Large-Scale Water Works of Chavimochic

Project Bond No. ……………………

Expiration Date:...................... Dear Sirs: We do hereby and upon request of our clients, ……………………. (name of the Legal Entity) (hereinafter “the Concessionaire”) post this joint and several, irrevocable, unconditional and automatic bond, without benefit of excussion, or division, up to the amount of ___________________ UNITED STATES DOLLARS (US$ __________) on behalf of the Regional Government of La Libertad acting as Grantor on behalf of the Republic of Peru in order to guarantee the correct and appropriate compliance with all and every one of the obligations under the responsibility of the Concessionaire derived from the solemnization of the Concession Agreement of Large-Scale Water Works of Chavimochic Project (hereinafter, “the Agreement”). This bond shall also guarantee the correct and appropriate compliance with the obligations under the responsibility of the Concessionaire established by virtue of the provisions contained in the Single Revised Text with legally binding rules regulating the grant of the concession of public infrastructure works and public services to the private sector approved through Supreme Decree No. 059-96-PCM and its regulation approved by Supreme Decree No. 060-96-PCM. In order to honor this Bond on your behalf, a written requirement made by the Regional Government of La Libertad through a notary office shall be enough. The payment shall be effective within 24 hours after your requirement was made in our offices located in …………………………. Any delay from our part to honor this Bond shall accrue an interest equivalent to the maximum LIBOR rate plus a spread margin of 3%. The LIBOR rate shall be the figure established by daily Reuters Telegraph received in Lima at 11:00 a.m. of the date in which the payment requirement was received through a notary

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office, accruing interests from the date in which its compliance was demanded and up to the effective payment date. Our obligations under this Bond shall not be affected by any conflict between you and our clients. This Bond shall be valid from ..................., 20... to ……........., 20....., inclusive. Sincerely Yours, Signature ……………………….. Full Name ………………………. Bank ……………………….

Note: This sample may be replaced by the sample of the issuing bank, as long as all conditions mentioned in this form are i ncluded.

REGIONAL GOVERNMENT

OF LA LIBERTAD


ANNEX No. 2

APPENDIX 1

LIST OF INTERNATIONAL FINANCIAL INSTITUTIONS AUTHOR IZED TO ISSUE GUARANTEES ESTABLISHED IN THE BIDDING CONDITI ONS

1. International First Class Banks: International First Class Banks shall be taken into consideration, as well as multilateral Banks, included in the list approved by Banco Central de Reserva del Perú through Circular No. 007-2013-BCRP, or the standard replacing it. The branches and/or affiliates of the previously mentioned international Banks shall also be considered.

2. International Financial Institutions:

• Latin American Reserve Fund (FLAR) Colombia • Andean Development Corporation (CAF) Venezuela • Inter-American Development Bank (IDB) United States of

America • World Bank (IBRD)

3. Any multilateral credit institution whereof the Republic of Peru is member.

4. Any other international financial institution approved by the GRANTOR with

a risk rating of no less than "AA" in its country, granted by a risk rating agency of the country where the international financial company was incorporated.

REGIONAL GOVERNMENT

OF LA LIBERTAD


ANNEX No. 2

APPENDIX 2

LIST OF LOCAL BANKS AUTHORIZED TO ISSUE GUARANTEES ESTABLISHED IN THE BIDDING CONDITIONS

The National Banks authorized to issue bonds are those included in the list below: • Banco Interamericano de Finanzas – BANBIF • Citibank, N.A., Lima Branch • BBVA Banco Continental • Banco de Crédito del Perú • Banco Financiero del Perú • Banco Internacional del Perú S.A.A. – INTERBANK • Scotiabank Perú • HSBC Bank Perú • Deutsche Bank Perú • Banco Santander Perú S.A. • MIBANCO – Banco de la Microempresa S.A.

REGIONAL GOVERNMENT

OF LA LIBERTAD


ANNEX No. 3

Form 1

AFFIDAVIT (Letter of Commitment to submit Reliable Informatio n)

Reference: Subparagraph 5.1 of the Bidding Conditions We do hereby declare under oath the following: That all information submitted to prove our experience in administration and operation recorded in the submitted documents is reliable. Place and Date: .............., ..............., 20….. Entity ...........................................................

Legal Entity Full Name .............................................................

Name of the Legal Representative of the Bidder Signature ............................................................

Signature of the Legal Representative of the Bidder

(The Signature of the Legal Representative must be authenticated)

REGIONAL GOVERNMENT

OF LA LIBERTAD


ANNEX No. 3

Form 2

TECHNICAL REQUIREMENTS FOR THE QUALIFICATION Reference: Subparagraph 5.2.1 of the Bidding Conditions

A. CONSTRUCTOR: ..................................................................................................

CHARACTERISTICS OF THE TUNNEL(S) CONSTRUCTION TERM

No. Name and Location

Type and main characteristics

Accumulated Length of Tunnel(s) (15,000m)

Rock Tunnel(s)

section > 10m2

length > 5,000m

From

(month/year)

To

(month/year)

1

2

3

4

TOTAL

CHARACTERISTICS OF THE DAM(S)

CONSTRUCTION TERM


Requirements for Dams

(Section III of Subparagraph 5.2.1)

From

(month/year)

To

(month/year)

Dam with volume of no less than 1´500,000 m3

CFRD

Dam(s) with accumulated fill volume of no less than

3’000,000 m3

1

2

3

TOTAL

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OF LA LIBERTAD


CHARACTERISTICS OF IRRIGATION PROJECTS CONSTRUCTION TERM

No. Name and Location Characteristic of the project From

(month/year)

To

(month/year)

No less than 20,000 m of open and closed ducts with a

conveyance capacity higher than 20m3/s

1

2

TOTAL

In case the provided information corresponds to an Affiliated Company, please add section B. B. Explanation of the relationship between the Constructor and their

corresponding Affiliated Company.

In case the information of the shareholder or Member corresponds to another different Legal Entity, an explanation must be given in regards to the existing relationship with the Bidder that provides the character of Affiliated Company of the Bidder.

............................................................................................................................ ............................................................................................................................. Sincerely Yours, Signature: ............................................................ Full Name: ...........................................................

Legal Representative of the Bidder Entity: .......................................................... Bidder Signature: .......................................................... Full Name: ............................................................

Name of the Legal Representative of the Affiliated Company

Place and Date: .............., ..............., 20…..

REGIONAL GOVERNMENT

OF LA LIBERTAD


ANNEX No. 3

Form 3

TECHNICAL REQUIREMENTS FOR THE QUALIFICATION Reference: Subparagraph 5.2.3 of the Bidding Conditions

A. ENGINEER OF NEW WORKS FOR THE FIRST STAGE: Full Name:.................................................................................................

CHARACTERISTICS OF THE DAM CONSTRUCTION TERM

No. Name and Location Direction or conveyance of one (1) CFRD dam with fill volume of no

less than 3’000,000 m3

From

(month/year)

To

(month/year)

1 B. ENGINEER OF NEW WORKS FOR THE SECOND STAGE: Full Name: .................................................................................................

CHARACTERISTICS OF THE TUNNEL CONSTRUCTION

TERM


Type and main characteristics

Direction or conveyance of one (1) Rock Tunnel

section > 10m2

length > 5,000m

From

(month/year)

To

(month/year)

1

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OF LA LIBERTAD


CHARACTERISTICS OF THE CONVEYANCE AND DISTRIBUTION SYSTEM

CONSTRUCTION TERM

No. Name and Location Characteristics of the project From

(month/year)

To

(month/year)

Direction or conveyance of one (1) conveyance and distribution

system of no less than 20,000 ml of open or closed ducts with a

conveyance capacity higher than 20m3/s

1 Sincerely Yours, Signature: ............................................................ Full Name: ...........................................................

Legal Representative of the Bidder Entity: .......................................................... Bidder Signature: .......................................................... Full Name: ............................................................

Name of the Legal Representative of the Affiliated Company Place and Date: .............., ..............., 20…..

REGIONAL GOVERNMENT

OF LA LIBERTAD


ANNEX No. 4

CREDENTIALS FOR QUALIFICATION (Incorporated Legal Entity)

Reference: Subparagraph 5.3 of the Bidding Conditions

Form 1

AFFIDAVIT We do hereby declare under oath that (name of the Bidder) is a Legal Entity duly incorporated under the ……….. Laws and maintains its validity according to the applicable legal principles of the country of origin. Place and Date: .............., ..............., 20….. Entity .................................................. Bidder Full Name ........................................................... Legal Representative of the Bidder Signature ............................................................

Legal Representative of the Bidder (The Signature of the Legal Representative must be authenticated) (In case the Bidder is a Consortium, this form must be submitted by each Member, with the authenticated signature of their c orresponding legal representatives).

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OF LA LIBERTAD


ANNEX No. 4



Form 2

AFFIDAVIT We do hereby declare under oath the following: That ........................... (name of each Member of the Consortium) have been associated with the consortium in order to participate in this Bid. That ............................ (name of each Member of the Consortium) are companies incorporated according to the legislation and maintain their validity. That ............................ (name of each Member of the Consortium) are jointly and severally liable before the Republic of Peru, the Regional Government, PROINVERSIÓN and the Committee in regards to all and every one of the obligations assumed and affidavits submitted by the Bidder related to this Bid. Place and Date: .............., ..............., 20….. Entity .................................................. Bidder Full Name ...........................................................

Legal Representative of the Bidder Signature ............................................................

Legal Representative of the Bidder Entity ...............................................

Legal Representative of (Member 1) Full Name ................................................. Legal Representative of (Member 1) Signature ............................................................

Legal Representative of (Member 1) Entity ...............................................

Legal Representative of (Member 2)

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Full Name ................................................. Legal Representative of (Member 2) Signature ............................................................

Legal Representative of (Member 2) Entity ...............................................

Legal Representative of (Member 3) Full Name ................................................. Legal Representative of (Member 3) Signature ............................................................

Legal Representative of (Member 3) (The Signature of the Legal Representative must be authenticated)

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OF LA LIBERTAD


ANNEX NO. 4

CREDENTIALS FOR QUALIFICATION (Incorporated Legal Entity or Consortium)


Form 3

AFFIDAVIT We do hereby declare under oath that the shareholding percentage of each of our shareholders or partners or Members, except for the Construction as appropriate, is the following:

Shareholder or Partner Shareholding Percentage of the Bidder (only those with

more than 5%) 1. 2. 3. 4. 5. TOTAL

In case of Bidders that are Consortia:

Members Shareholding Percentage of the Bidder

1. 2. 3. 4. 5. TOTAL

Strategic Investor: Place and Date: .............., ..............., 20….. Entity .................................................. Bidder Full Name ........................................................... Legal Representative of the Bidder Signature ............................................................

Legal Representative of the Bidder

REGIONAL GOVERNMENT

OF LA LIBERTAD


ANNEX No. 4



Form 4

AFFIDAVIT

We do hereby declare under oath that ...........................(name of the Bidder), as well as its shareholders, partners, or Members and shareholders and partners of the latter, if applicable: a. Have not been administratively sanctioned with a temporary or permanent

suspension of the exercise of their rights to participate in processes called by the Peruvian Government, or to enter into contracts with the Peruvian Government.

b. Have not ceased to be concessionaires due to non-compliance with a

concession agreement entered into with the Peruvian Government, signed under the framework of a private investment promotion process referred in the concessions TUO approved by Supreme Decree Nº 059-96-PCM or Law No. 28059 – Framework Law of Decentralized Investment Promotion or Legislative Decree No. 1012 – Framework Law on Public - Private Partnerships.

Place and Date: .............., ..............., 20….. Entity .................................................. Bidder Full Name ........................................................... Legal Representative of the Bidder Signature ............................................................


REGIONAL GOVERNMENT

OF LA LIBERTAD


ANNEX No. 4



Form 5

AFFIDAVIT

We do hereby declare under oath that (name of the Bidder), as well as its shareholders, partners, or Members and shareholders and partners of the latter, if applicable, waive the right to: 1. Invoke or exercise any diplomatic privilege or immunity or of any other

type. 2. File any claim through the diplomatic cannel and any other compensation

right or others related to any claim that may be filed by or against the Peruvian Government, the Regional Government, PROINVERSIÓN, the Committee, its members and advisors, under the Peruvian Law or under any other legislation based on our obligations in terms of the Bidding Conditions, the Financial Proposal and the Concession Agreement.

Place and Date: .............., ..............., 20….. Entity .................................................. Bidder Full Name ........................................................... Legal Representative of the Bidder Signature ............................................................


REGIONAL GOVERNMENT

OF LA LIBERTAD


ANNEX No. 4



Form 6

AFFIDAVIT We do hereby declare under oath that our legal and technical advisors have not directly rendered any type of services on behalf of PROINVERSIÓN and the Committee during the development of this private investment promotion process, whether full or partial time or eventual related to the referred process. Place and Date: .............., ..............., 20….. Entity .................................................. Bidder Full Name ........................................................... Legal Representative of the Bidder Signature ............................................................


REGIONAL GOVERNMENT

OF LA LIBERTAD


ANNEX No. 4



Form 7

AFFIDAVIT We do hereby declare under oath that (name of the Bidder), its shareholders, partners or Members, partners or shareholders of the latter if applicable, do not hold direct or indirect shares with any other Bidder. Place and Date: .............., ..............., 20….. Entity .................................................. Bidder Full Name ........................................................... Legal Representative of the Bidder Signature ............................................................


REGIONAL GOVERNMENT

OF LA LIBERTAD


ANNEX No. 4

CREDENTIALS FOR QUALIFICATION (Only applicable to companies that listed their sha res in the Stock Market)


Form 8

AFFIDAVIT We do hereby declare under oath that ……….. (name of the Bidder), its shareholders, partners or Members, partners or shareholders of the latter if applicable, do not hold direct or indirect shares with any other Bidder, exercising the control of the administration or of any its members in case of a Consortium, according to the provisions set forth in the Regulation of Indirect Property, Connections and Economic Groups approved through CONASEV Resolution No. 090-2005-EF/94.10. Place and Date: .............., ..............., 20….. Entity .................................................. Bidder Full Name ...........................................................



REGIONAL GOVERNMENT

OF LA LIBERTAD


ANNEX No. 5

Form 1 LETTER OF INTENT TO INCOPORATE A LEGAL ENTITY

AFFIDAVIT

Reference: Subparagraphs 5.3.8.1 and 10.2.1.1 of the Bidding Conditions We do hereby declare under oath the following: (In case the Bidder is a Consortium) • That, ......................................... (name of each Member of the Consortium)

have been associated with a Consortium in order to participate in this Bid. • That, …………………………………. (same Members mentioned in the

previous point) have signed a letter of intent to incorporate a Legal Entity domiciled in the Republic of Peru with a capital stock in accordance with the provisions set forth in Subparagraphs 5.3.8.1 and 10.2.1.1 of the Bidding Conditions.

(In case the Bidder is a company) • That, ……………………………. (name of the company) undertakes to

incorporate a Legal Entity domiciled in the Republic of Peru with a capital stock in accordance with the provisions set forth in Subparagraphs 5.3.8.1 and 10.2.1.1 of the Bidding Conditions.

(Following paragraphs apply to both cases) • That, the Legal Entity to be incorporated shall enter into the Concession

Agreement. • That, the corporate purpose of the Legal Entity to be incorporated shall be

set within the framework of this Bid’s purpose. • That in case we are declared Successful Bidders, we undertake to deliver

the corresponding Transcript of the Concessionaire’s Articles of Incorporation with the corresponding certificate proving the registration of the Company in the proper Registry Office in the Closing Date mentioned in Subparagraph 1.6 of the Bidding Conditions.

• In this sense, we declare to know and accept that the non-compliance with

this commitment may be taken into consideration to render the award of the bid granted to us ineffective.

REGIONAL GOVERNMENT

OF LA LIBERTAD


Place and Date: .............., ..............., 20….. Entity .................................................. Bidder Full Name ...........................................................



Legal Representative of (Member 1) Full Name ..................................................

Legal Representative of (Member 1) Signature ............................................................ Legal Representative of (Member 1) Entity ...............................................




Legal Representative of (Member 3) Signature ............................................................ Legal Representative of (Member 3)


REGIONAL GOVERNMENT

OF LA LIBERTAD


ANNEX No. 5

Form 2

FINANCIAL REQUIREMENTS – ENVELOPE No. 1 Reference: Subparagraph 5.4 of the Bidding Conditions

SAMPLE OF COVER LETTER FOR FINANCIAL INFORMATION FO R

QUALIFICATION

Lima, ........................., 20... Sirs PRO INTEGRACIÓN Committee By Hand.-

Bidder : .............................................................................. According to the provisions set forth in Subparagraph 5.4 of the Bidding Conditions, we do hereby meet the requirement to submit a letter of introduction regarding our financial and technical information. I. FINANCIAL REQUIREMENTS A. Equity of the Bidder

EQUITY US$ [ ]*

*The total amount that shall be recorded in this Chart must be the same as Chart B.

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OF LA LIBERTAD


B. Equity, shareholding percentage of the Bidder an d equity prorated among shareholders or Members of the Bidder.

Shareholder,

Affiliated Company or

Member

Note 1

Equity US$ (Note 2)

Shareholding %(*)

Prorated Equity US$

(I) (II) (III = I x II )

TOTAL (This total must be also recorded in Section A) US$

(*) The Strategic Investor must prove at least the 50% of the equity required as financial demand in Subparagraph 5.4.1. Note 1: Put an “X” if the amount of the Equity belongs to an Affiliated Company and additionally fill out Section D. Note 2: In case of equities corresponding to Shareholders, Affiliated Companies or Members in currencies other than US$; Chart C must be used.

C. Equity in case of conversions of amounts express ed in currencies

other than the Dollar.

Shareholder, Member or Affiliated Company

Amount (Original

Currency)

Exchange Rate Amount (US$)

Note: The Exchange Rate to be used shall be published by the Superintendence of Banking and Insurances at the closing date of the Financial Statements.

REGIONAL GOVERNMENT

OF LA LIBERTAD


D. Explanation of the relationship between the Bidd er, shareholder or Member of the Bidder and the corresponding Affiliat ed Company. In case the amount of a shareholder or Member corresponds to another person, there must be an explanation below about the relationship causing that the company is an Affiliated Company of the Bidder, shareholder or Member of the Bidder: _____________________________________________________________________________________________________________________________________________________________________________________________ E. Include Reference Letter of the International Fi nancial Institution Sincerely Yours, Signature ....................................... Full Name ........................................................... Legal Representative of the Bidder Entity .................................................. Bidder Signature ....................................... Full Name ........................................................... Legal Representative of the Company

REGIONAL GOVERNMENT

OF LA LIBERTAD


ANNEX No. 5

Form 3

SAMPLE OF THE BID BOND

Reference: Subparagraph 7.1.3 of the Bidding Conditions Lima, ..........................., 20.. Sirs Private Investment Promotion Agency - PROINVERSIÓN By Hand.- Ref.: Comprehensive Project Bid to grant the Concession of Large-Scale Water Works of Chavimochic Project. Bond No. .............................. Expiration Date: ................................. Dear Sirs: We do hereby and upon request of our clients, ............................................ post this joint and several, irrevocable, unconditional and automatic bond, without benefit of excussion, or division, up to the amount of __________ and 00/100 United States Dollars (US$_____________) on behalf of PROINVERSIÓN, in order to guarantee the Validity and Reliability of the Financial Proposal submitted by our client according to the terms and conditions established in the Bidding Conditions of the Comprehensive Project Bid to grant the Concession of Large-Scale Water Works of Chavimochic Project. We also certify that this bond shall be effective in case our client is declared Successful Bidder by the PRO INTEGRACIÓN Committee and fails to comply with the obligations under its responsibility at the Closing Date of the previously mentioned Bid. The payment shall be effective only upon requirement by the Executive Director of PROINVERSIÓN or any person acting as such through a notary office in our offices located in ............................ Any delay from our part to honor this Bond shall accrue an interest equivalent to the maximum LIBOR rate plus a spread margin of 3%., from the date in which the honoring was demanded and up to the effective payment date.

REGIONAL GOVERNMENT

OF LA LIBERTAD


The LIBOR rate shall be the established by the daily Reuters Telegraph received in Lima at 11:00 a.m. of the date in which the payment requirement was received through a notary office. Our obligations under this Bond shall not be affected by any conflict between you and our clients. The validity term of this Bond shall start in the date in which the Financial Proposal was submitted and up to ....................., ........ The terms used in this Bond have the same meaning as those terms defined in the Bidding Conditions. Sincerely Yours, Signature ................................................... Full Name ................................................ Bank ..................................

Note: This sample may be replaced by the sample of the issuing bank, as long as all conditions mentioned in this form are i ncluded.

REGIONAL GOVERNMENT

OF LA LIBERTAD


ANNEX No. 5

Form 4

VALIDITY OF THE INFORMATION Reference: Subparagraph 7.1.1 of the Bidding Conditions

AFFIDAVIT

We do hereby declare under oath the following: 1. That the information, statements, certification and in general all documents submitted in Envelope No. 1 are currently valid and shall be valid until the Closing Date. 2. That we do not hold direct or indirect shares in another Qualified Bidder or its Members. Place and Date: .............., ..............., 20….. Entity .................................................. Bidder Full Name ........................................................... Legal Representative of the Bidder Signature ............................................................


REGIONAL GOVERNMENT

OF LA LIBERTAD


ANNEX No. 5

Form 5

LETTER OF COMMITMENT TO HIRE THE CONSTRUCTOR

AFFIDAVIT Reference: Subparagraph 5.2.2 of the Bidding Conditions

We do hereby declare under oath the following: That, we have signed a letter of commitment to hire the constructor; therefore, in case the Bidder is declared Successful Bidder according to the Bidding Conditions, we undertake to enter into, before the Closing Date, a construction contract by virtue of which the Constructor is jointly and severally liable with the Successful Bidder to execute the Works within the terms established in Subparagraphs 10.2.1.6 and 10.2.1.7 of the Bidding Conditions. Place and Date: .............., ..............., 20….. Entity .................................................. Bidder Full Name ........................................................... Legal Representative of the Bidder Signature ............................................................





Legal Representative of (Member 2) Signature ............................................................ Legal Representative of (Member 2)

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Entity ............................................... Legal Representative of (Member 3)

Full Name ..................................................


Constructor Name .............................................................

Legal Representative of the Constructor Signature ............................................................

Legal Representative of the Constructor


REGIONAL GOVERNMENT

OF LA LIBERTAD


ANNEX No. 5

Form 6

STATEMENTS OF THE CONSTRUCTOR TO BE INCLUDED IN THE CONSTRUCTION CONTRACT

Reference: Subparagraph 10.2.1.7 of the Bidding Conditions

1. Organization and Powers

The Constructor is a trading company or entity duly incorporated, validly existing, duly registered in the corresponding records, according to the laws of its incorporation or organization jurisdiction and has all social powers or other applicable powers, and the necessary authority to be owners and operate their properties, carry out their businesses as intended to be conducted and proposed to be conducted in order to sign this Construction Contract and comply with the obligations established herein.

2. Capacity

The Constructor is duly capable and competent to carry out its businesses, daily operations and those operations included in this Construction Contract.

3. Authorization

The Constructor has the capacity and sufficient representation to sign and comply with this Construction Contract. The signing of and compliance with this Construction Contract have been duly authorized through all necessary social actions. No act required for this purpose has been modified or cancelled, and said acts are fully valid.

4. Absence of Conflicts

The signing, submission and compliance with this Construction Contract by the Constructor and the execution of the acts established herein (1) do not fail to comply with any provision of the Laws applicable to the Constructor or any Strategic Investor, social agreement, trust agreements or Constructor’s Bylaws, if applicable, or any order, resolution or decree of any Governmental Authority obliging the Constructor; (2) do not have any conflict with, do not fail to comply with, or do not constitute (with the duly notice or after the time has passed or both) a non-compliance with any contractual obligation of the Constructor; (3) do not result in, or required the creation or imposition of any considerable

REGIONAL GOVERNMENT

OF LA LIBERTAD


encumbrance over any of the properties or assets of the Constructor ; and (4) do not require the approval or consent of any person or entity, according to any contractual obligation of the Constructor.

5. Governmental Consents

The signing of and compliance with this Construction Contract by the Constructor do not require any record, consent or approval, or notice of any Governmental Authority additional to those already made, the copies of said documents must be attached to the Construction Contract.

6. Binding Obligation

This Construction Contract is legally valid and enforceable for the Constructor according to its terms, unless said enforceability may be limited by the Applicable Laws related to bankruptcy or insolvency.

7. Adverse Contracts.

The Constructor is not a party in purchase contracts, future contracts, non-competition agreements, or any other contract limiting its capacity to do businesses, or that may be reasonably adverse for the capacity of the Constructor to comply with this Construction Contract.

8. Compliance with Contracts.

The Constructor has not incurred in the non-compliance of any obligation, agreement or condition contained in any contractual obligation, unless said non-compliance may not be reasonably adverse for the capacity of the Constructor to comply with this Construction Contract.

9. Intellectual Property.

The Constructor owns the license of use or has the right to use all patents, trademarks, trade names, copyrights, technologies, know-how and necessary processes to comply with this Construction Contract.

10. Disclosure.

No statement of the Constructor contained in this Construction Contract or forming part of it, as a written certificate or statement, constitutes a false statement of some fact or omission to disclose a fact whose disclosure is necessary to make statements that are

REGIONAL GOVERNMENT

OF LA LIBERTAD


not fraudulent, considering the circumstances in which they were made. There is no essential fact known by the Constructor that had, has or may have an essentially adverse effect in the capacity of the Constructor to comply with this Construction Contract that has not being disclosed through this Construction Contract to be used in regards to operations and transactions included in this Construction Contract.

11. Compliance with the Laws.

The Constructor has not failed to comply with any law, ordinance, regulation, order, policy, guideline or other requirement of any local or international government or any of its organizations, dependencies or agencies with jurisdiction over the behavior of their corresponding businesses or the ownership of their corresponding properties, including but not limited to any violation related to the use, delivery, storage, transport or disposal of any hazardous material whose non-compliance can or may subject the Constructor or any of its corresponding officials to criminal liability or can or may have an essentially adverse effect for the capacity of the Constructor to comply with this Construction Contractor. The Constructor has timely recorded, registered or submitted all relevant reports, documents and other materials required to be recorded, registered or submitted pursuant to any law, ordinance, regulation, order, policy, guideline or other requirement of any Governmental Authority, unless said non-compliance with keeping said record, registry or submission does not subject the Constructor or any of its officials to criminal liability, and does not have an essentially adverse effect for the capacity of the Constructor to comply with this Construction Contract.

In this sense, we express to know and accept the consequences of the non-compliance with this commitment and/or the lack of veracity of the previously mentioned statements. Place and Date: .............., ..............., 20….. Entity ...........................................................

Constructor Full Name .............................................................

Legal Representative of the Constructor Signature ............................................................

Legal Representative of the Constructor

REGIONAL GOVERNMENT

OF LA LIBERTAD


ANNEX No. 6

ENVELOPE 3: SAMPLE OF COVER LETTER FOR FINANCIAL PR OPOSAL

Reference: Subparagraph 7.2.1 of the Bidding Conditions Lima, ......................, 20... Sirs PRO INTEGRACIÓN Committee By Hand.- Bidder: ..................................................................................... According to the provisions set forth in Subparagraph 7.2 of the Bidding Conditions, we submit our Financial Proposal according to the conditions established for this Bid, in regards to the following terms: 1. Amount of offered co-financing (COo):

US$ ________ (………………. with……/100 United States Dollars) including VAT.

2. Amount of Annual Retribution for Offered Investm ent Recoveries (RPIo):

US$ ________ (...............................with…..….United States Dollars) plus VAT.

3. Amount of Annual Retribution for Offered Operati on and Maintenance

(RPMOo):

US$ ________ (...............................with…..….United States Dollars) plus VAT.

We declare that the total amount of the proposed RPMOo, according to the characteristics of our Technical Proposal is divided into Stages as shown below: For the First Stage: ____% For the Second Stage: _____%

We also declare that our Financial Proposal is irrevocable and shall maintain its full validity up to ninety (90) calendar days after the Closing Date; we undertake to mandatorily extend it if the Committee requires so.

REGIONAL GOVERNMENT

OF LA LIBERTAD


We accept that this proposal may be readjusted according to the terms and conditions indicated in the Concession Agreement. Bidder ...........................................................

Full Name

Full Name ........................................................... Legal Representative of the Bidder

Signature ............................................................


REGIONAL GOVERNMENT

OF LA LIBERTAD


ANNEX No. 7

SAMPLE OF BANK GUARANTEE IN CASE THE SUCCESSFUL BID IS CHALLENGED


Lima, ..........................., 20.. Sirs Private Investment Promotion Agency - PROINVERSIÓN By Hand.- Ref.: Comprehensive Project Bid to grant the Concession of Large-Scale Water Works of Chavimochic Project. Bond No. .............................. Expiration Date: ................................. Dear Sirs: We do hereby and upon request of our clients, ............................................ post this joint and several, irrevocable, unconditional and automatic bond, without benefit of excussion, or division, up to the amount of _____________ and 00/100 United States Dollars (US$_____________) on behalf of PROINVERSIÓN, in order to guarantee the payment of said amount in any of the assumptions indicated in the fourth paragraph of this bond. This bond shall be valid from …….…….., 20… to ……………., 200….; and shall be effective in case the submitted appeal is declared baseless or inadmissible or in case said appeal was not interposed within the term established in Subparagraph 9.2.2 of the Bidding Conditions. It is expressly understood by us that this bond shall be executed by PROINVERSIÓN in accordance with the provisions set forth in article 1898 of the Peruvian Civil Code. It is expressly agreed that in order to honor this bond, a simple requirement shall be enough, made through a notary office in our offices located in the address mentioned below. We undertake to pay the total amount of the bond within a maximum 24-hour term, counting from the date in which the required notarized letter was received.

REGIONAL GOVERNMENT

OF LA LIBERTAD


Any delay from our part to honor this Bond shall produce the payment of compensatory interests on your behalf which shall be estimated over the maximum LIBOR rate at a year, plus a Spread of 3.0%. The LIBOR rate shall be the established by the daily Reuters Telegraph received in Lima at 11:00 a.m. of the date in which the payment requirement was received through a notary office; interests shall be accrued from the date in which the honoring of this bond was demanded and until the effective payment date. Sincerely Yours, _______________ SIGNATURE AND SEAL Name of the Bank issuing the guarantee: Address of the Bank:

REGIONAL GOVERNMENT

OF LA LIBERTAD


ANNEX No. 8

DATA ROOM USER GUIDE I. AVAILABILITY 1. Authorized Users The authorized users to have Access to the Data Room are those

representatives of the companies that have paid their Right to Participate in the Bid and have been properly presented and identified before the administration of the Data Room with the properly filled out forms.

2. Capacity and Services The Data Rooms shall have a meeting room with a maximum capacity for

5 people. Users apart from all available information regarding the Chavimochic Project shall have access to printers, photocopier, telephone, facsimile and other services that make their work easier.

3. Opening Hours The opening hours of the Data Room shall be from 8:30 a.m. to 13:00 p.m.

and from 14:30 p.m. to 17:00 p.m., from Monday to Friday. Upon request of the party concerned, this schedule may be extended for specific cases.

4. Procedure for the service The Acquirer or Bidder wanting to use the Data Room must sign a

Confidentiality Agreement and submit its application using the corresponding form, indicating their schedule preferences, time that the room will be used and the people that will attend. The Coordination of the Data Room shall respond to the requirement according to the availabilities and according to an equity and balance criteria. Preferably, the Data Room must be used for queries and works about reference documents. Under no circumstances, the Data Room shall be used as an operation base for Bidders.

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II. OFFERED SERVICES

The use of the Data Room is free but different services shall be charged such as the use of photocopiers, printers, book bindings, file recording in diskettes, telephone, fax, lunch, etc. Additional services such as copies of drawings, scanning of images, use of the Internet and others shall be eventually provided as long as they were requested in advance and they shall be also charged according to their costs, which shall be previously informed by the Coordination of the Data Room.

Additionally, a CD Rom shall be available containing most of the digital assessments and drawings of the Project, including the totality of the final assessments.

For visits to dam site, entry and exit of the tunnel, plots of lands and other places of interest; the users shall inform about the number of participants in advance in order to organize the visit and necessary support. The transport shall be at the expense of the parties concerned.

III. FORMS TO USE THE DATA ROOM

The Form 1 (IDENTIFICATION OF THE PEOPLE AUTHORIZED TO USE THE DATA ROOM) and its Appendix 1 (DATA AND CONTINUANCE CHART) were included in this Annex. These forms shall be submitted after being filled out before the first day of the Data Room use, through fax or e-mail, by the representatives of the Bidder group, this is an essential requirement in order to have access to the information provided in the Data Room. Based on the provided information in this form the schedules and reservations to use the Data Room shall be prepared.

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ANNEX No. 8

Form 1

IDENTIFICATION OF THE PEOPLE AUTHORIZED TO USE THE DATA ROOM

Lima, ............... Sirs PRO INTEGRACIÓN Committee By Hand.- I, .................... (Name of the Representative) do hereby, acting on behalf of.......................... (Name of the Company) request to use the Data Room during the term of the visit program proposed and for the amount of people indicated in the chart of Appendix 1. Regarding the procedures for the use of the Data Room, we declare to know the procedures mentioned in the Data Room User Guide – Annex No. 8 of the Bidding Conditions. We also express to know that the information of the Data Room is strictly confidential. Sincerely Yours, ______________________ _____________________ Name of the Representative Identity Document

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ANNEX No. 8

Form 1 – Appendix 1

DATA AND CONTINUANCE CHART

No. Full Name Identity Document Nationality Continuance Term

(Indicate Date)

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

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ANNEX N° 9

TERMS OF REFERENCE 1. OVERVIEW

These terms of reference set forth the general reference specifications as well as the compulsory specifications or conditioning parameters, which will serve as a guideline for the formulation of Technical Proposals and Economic Proposals of the Bidders within the Public Bid framework and, in general, for compliance with the Concessionaire’s obligations contained in the Concession Contract. Such specifications are formulated taking, as reference, the existing studies which are made available to the Bidders at the Project Data Room; mainly the Third Stage Feasibility Studies as well as engineering and cost review and update studies being developed by the Technical Advisor, whose completion in March this year will allow us to obtain final Terms of Reference. As this is a public bid of integral projects, each Bidder shall prepare its own project according to its own assessment and experience; however, in this preparation, consideration shall be given to the conditioning parameters set forth in these Terms of Reference.

2. OVERVIEW OF THE CHAVIMOCHIC PROJECT

2.1 Brief description of the Chavimochic Project

The Chavimochic Project is a multipurpose project based on diversion of part of the River Santa flows for the incorporation of new lands and to improve irrigation in Chao, Virú, Moche and Chicama valleys and intervalleys. Additionally, the project includes the provision of water supply for human use in the city of Trujillo and for hydroelectric generation. The integral hydraulic scheme of the Chavimochic Project was defined in the Feasibility Study prepared in 1983 by Corporación Peruana de Ingeniería S.A. – CORPEI, a consultancy firm, which projected its development in three stages, considering the extent of the works and the investment required for the construction.

The project is managed by the Chavimochic Special Project (PECH for its Spanish acronym), a body that reports to the Regional Government of La Libertad.

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Pursuant to the valid technical assistance agreement entered into with the Regional Government of La Libertad, PROINVERSIÓN is the entity in charge of the design and management of the private investment promotion process of Chavimochic Project, in coordination with PECH and the Regional Government of La Libertad.

2.2 Chavimochic Project Development in Stages

The first two stages of the project were executed by means of a public work modality between the years 1986 and 2012. The investments in those works amounted to approximately 960 million dollars at nominal values. The main works executed in that period are as follows:

First Stage: • Chavimochic Intake, for catchment of up to 105 m3/s. • Diversion canal from the intake to Palo Redondo, of 25.6 km in length,

with maximum capacity of 88 m3/s. • Inter-basin tunnel, of 10 km in length and maximum capacity of 78

m3/s. • Chao-Virú Main Canal, of 57.8 km in length and capacity of 78 to 66

m3/s. • Mini hydroelectric power station of Virú, with capacity of 7.5 MW. • Various ancillary works.

Second Stage: • First and second line of Virú Siphon • Virú-Moche Main Canal, of 66.04 km in length for a flow of 50 m3/s. • Potable water treatment plant for Trujillo, with capacity of 1.25 m3/s. • Various ancillary works.

Third Stage:

The Third Stage, executed within the concession framework, will complete the integral development of the Chavimochic Project. This stage considers the construction of the following works and facilities: • Palo Redondo dam, for an impoundment with a live capacity of 366

MMC. • Third crossing line of Río Virú, of 3.5 km in length and capacity of 16.5

m3/s. • Main Canal at Moche-Chicama-Urricape sector, of 113 km in length

and variable capacity of 37.5 to 5 m3/s.

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• Side conveyance for Urricape sector below the Main Canal. • Integral refurbishment of the intake system from the Main Canal

throughout its length. • Control, measurement and automation system with integral coverage

for the whole major hydraulic infrastructure of Chavimochic Project.

The integral scheme of the project, including the Third Stage Construction Works, is shown below:

2.3 Favored agricultural areas

The implementation of the first two stages of the project has made possible the incorporation of approximately 18 thousand new hectares in Chao, Virú and Moche intervalleys. According to information provided by PECH, the productive activities in those areas have generated revenues for exports of about US$ 400 million in the year 2011. Also, the improvement of irrigation and an increase in the cultivated area from 16 to 29 thousand hectares in Chao, Virú and Moche valleys has

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resulted in an increase of the agricultural production gross value in those valleys from US$ 45 to US$ 78 million per year. The execution of the Third Stage of the project will result in an expansion of the agricultural borders incorporating around 63 thousand hectares of new lands; that is, more than three times the lands incorporated in the first two stages. Moreover, the Third Stage will make it possible to improve irrigation of other 48 thousand hectares in Chicama valley, which in turn means that the areas with improved irrigation will double in the so-called old valleys of the project.

3. PURPOSE

The purpose of the concession is to have the Concessionaire in charge of the following obligations: a) making of the New Construction Works; b) operation and maintenance of the New Construction Works and the Existing Construction Works; and c) provision of water supply service to the project users. Such obligations shall be executed in compliance with the guidelines contained in these Terms of Reference, considering to that effect, the delimitation of two Phases of parallel execution, described as follows:

In the First Phase:

− Design and construction of the First Phase New Construction Works

consisting of Palo Redondo Dam and ancillary works, which are part of the Third Stage of the Project;

− In the Operation Period, it comprises the operation and maintenance

activities of the aforementioned First Phase New Construction Works.

In the Second Phase:

− Design and construction of the Second Phase New Construction Works consisting of: i) third crossing line of River Virú; ii) extension of the Main Canal in Moche-Chicama-Urricape sector; iii) additional conveyance and distribution works at Urricape pampas; iv) refurbishment of the intake system along the Main Canal; and v) installation of the control, measurement and automation system.

− Operation and maintenance activities of the aforementioned Second Phase New Construction Works;

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− Operation and maintenance of Major Hydraulic Infrastructure Works, built as part of the First and Second Stage of the project; with the exception of the secondary conveyance system, comprised by side canals of the Project, currently operated by the respective User Boards.

− Provision of water supply service for irrigation purposes from the Main Canal to the various types of agricultural users of the Project, as detailed in these Terms of Reference.

− Provision of water supply service for human use to the potable water treatment plant owned by the Chavimochic Special Project, for the city of Trujillo.

− Delivery of bulk water to the Chavimochic Special Project for distribution by means of common intakes to the User Boards of Chao, Virú, Moche and Chicama valleys, in accordance with the annual volume, delivery points and system as determined by the Chavimochic Special Project in coordination with the National Water Authority, with the exception of direct service through specific intakes to individual users of these valleys from the Main Canal, in which cases the Concessionaire and those users shall enter into the respective service contracts.

− Provision of water supply service for hydroelectric generation to the hydroelectric power stations of Virú (currently in operation), Cola de Embalse Palo Redondo , and Pie de Presa (when operation is started), considering that this service, in all cases, shall be subordinated to the water dispatch system for human use and irrigation purposes.

The water dispatch system, as defined to comply with the aforesaid commitments, shall consider the following priorities: a) Coverage for human use demand; b) Coverage for agricultural use demand, c) Coverage for hydroelectric use demand.

4. CONCESSION TERMS AND PERIODS

For the purposes of this Concession, an effective term of up to twenty-five (25) years was adopted, considering the following periods: Initial Period (up to one year); Construction Period (up to four years); and Operation Period (for the remaining period until the end of the Concession term).

4.1 Initial Period

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It spans from the date that the Contract is signed to the day before the start date of the Construction Period. In the Initial Period, that may be extended for the first 12 months from the date the Contract is signed, the Concessionaire shall comply with the following activities:

a) Preparation of Technical Files N° 1 and N° 2; b) Reception of the project control, within the framework that will be

established In the Contract; c) Procurement of environmental authorizations and the Certificate of

Absence of Archaeological Remains (CIRA for its Spanish acronym); and

d) Financial closure.

If the fulfillment of these activities demands the Concessionaire a shorter term than the established deadline for the Initial Period, the Grantor may be requested to consider that the Initial Period is totally or partially completed and that the Construction Period may be started. The partial completion of the Initial Period occurs when there is a possibility to obtain part of the First Phase Technical File, completed and approved, and when co-financing funds are available to commence with the construction works of that phase. The Initial Period may be extended if, by agreement between the parties, the financial closure deadline is extended or because the CIRA was not obtained for causes that are not attributable to the Concessionaire.

4.2 Construction Period

It spans up to four (4) years from the day following the end of the Initial Period to the date of delivery of the New Construction Works start-up certificate. In this period, the New Construction Works described in Technical Files N° 1 and N° 2 will be executed purs uant to the sequence established in these Terms of Reference and in the General Work Plan established by the Successful Bidder.

4.3 Post-Construction Period

It comprises the initial phase of the Operation Period, which spans five (5) years following the date of issuance of the New Construction Works start-up certificate. In this period, the Performance Bond of the Concession

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Contract will remain in force for an amount equal to the Construction Period.

4.4 Operation Period

It spans from the day following the issuance of the New Construction Works start-up certificate to the expiration of the concession term for a twenty (20)-year period, as reference. In this period, the Concessionaire shall carry out operation and maintenance activities of the Works and provide Service to the Project Users.

5. PROJECT LOCATION

The Project is entirely located in the coastal zone of La Libertad Region, which limits to the North with Lambayeque, Cajamarca and Amazonas departments, to the South with Ancash and Huánuco, to the East with San Martín department, and to the West with the Pacific Ocean. The irrigation areas to be favored by the Project are located in Virú, Trujillo and Ascope provinces. On the other hand, the River Santa Basin, which supplies the necessary water resources for the Project implementation, is located, in its most part, in the Ancash Region, and only 20% of its area is located in La Libertad Region. The projected Palo Redondo Dam is located 18 km away from the North Pan American Highway, Kilometer 495, while the Moche-Chicama water conveyance works are located in La Libertad Department, Trujillo and Ascope provinces, extending from the crossing with River Moche to Urricape pampas situated to the North of Chicama Valley, covering a distance of 111.088 Km. Most of the water conveyance works is located near and along the Pan American Highway, crossing this road in three points. Also, there are other transverse roads that, starting from the Pan American Highway, are crossed by the water conveyance works; many of which are asphalted; for example, the roads to Otuzco, Roma and Casagrande.

5.1 Location

The coordinates of the main borders of the Project are as follows:

South Border: 798048 E / 9042107 S 759222 E / 9008000 S North Border: 675200 E / 9175800 S

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665456 E / 9163769 S Datum: PSAD 56 Zone: 17 South

5.2 Hydrography and Climate

5.2.1 Hydrography Basins

Five basins are involved in the Project: Santa, Chao, Virú, Moche and Chicama.

5.2.1.1 River Santa Basin

The River Santa basin is one of the biggest basins in the Peruvian coast. It originates in Conococha lagoon at 4,400 masl and runs in SE-NW direction to the confluence with River Tablachaca. In this place, it changes its direction to the west and flows into the Pacific Ocean. The basin has an area of 11,000 km2 until the Chavimochic intake, and 12,200 km2 until its mouth in the Pacific Ocean. The middle sector of the River Santa valley is called Callejón de Huaylas, which limits on its right margin with the Cordillera Blanca, place of origin of practically all tributaries that make up the runoff, and on its left margin with Cordillera Negra, which does not contribute much to the runoff of the basin. The Callejón de Huaylas ends in a deep and narrow canyon called Cañón del Pato, which is geologically constituted by granite slate rock. The Cordillera Blanca is a rock mass of 180 km in length that hosts the highest peaks of Peru. Its snowmelts contribute to regulate the River Santa flows, and, as a result, in low water periods it is one of the few coastal rivers with a significant flow. On the other hand, the presence of lagoons and the seismic activity of the region constitute a potential danger for landslides to the towns located in Callejón de Huaylas, such as the one that occurred in Yungay in the year 1970. This basin hosts the Chavimochic Intake (420 masl) and the projected Palo Redondo Dam (250 masl).

5.2.1.2 Low basins of Rivers Chao, Virú, Moche and Chicama

The area favored by the Project is located in the low parts of River Chao, Virú, Moche and Chicama basins, between 300 masl and the sea level.

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In accordance with the Thornthwaite classification, the climate in the low basins of these rivers is arid to semi-dry, with scarce or null rainfall, mild temperature and average humidity. Nevertheless, extraordinary events of great rainfall cannot be discarded, which would provoke significant flows, such as the ENSO events (El Niño Phenomenon), with variable return periods. The major ENSO events in the XX century occurred in the years 1925, 1983 and 1998.

5.2.2 Weather conditions 5.2.2.1 Annual Rainfall

There are eventual rains in the low parts of the basins of up to 50 mm per year. These rains take place between June and September, and are mainly originated by mist from the seashore.

5.2.2.2 Air Temperature

Daily temperature variations do not exceed 15°C on average at any time of the year. In summer, maximum temperatures of 32°C and minimum temperatures of 14°C have been recorded.

5.2.2.3 Relative Humidity

In the coastal area, the relative humidity is higher in winter, reaching up to 98%. In summer, it descends to 75% on average, while in irrigation areas it reaches 50% in daytime.

5.2.2.4 Winds

The maximum average monthly speed of the wind is 8 km/h, and the maximum instantaneous speed is 29 km/h, with prevailing South-West direction; that is, winds from the sea.

5.2.2.5 Evaporation

In accordance with the records of the evaporimeter station of ex Casagrande cooperative, the annual average evaporation is of about 1,700 mm. The evaporation levels are higher in summer months due to higher temperatures, and it is lower in winter months.

5.3 Geomorphology 5.3.1 Basin and reservoir zone of Palo Redondo

The predominant geomorphological feature of the Palo Redondo ravine basin is the great erosion observed along 15 km between the headwaters of Chugurball ravine (3,800 masl) and the confluence of

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Pollito and Las Cortaderas ravines (1,400 masl); these 2,400m of elevation difference give a slope of 9%. From the aforesaid confluence and the mouth of Palo Redondo ravine, in the River Santa, at 200 masl (1,200 m of elevation difference), there is a bigger bed with 27 km in length and a slope of 2%. The formation of the narrowed part is the result of recent epirogenic upheaval that modified the general base level of the area. The morphologic landscape shows rejuvenation as a result of the work affecting volcanic and intrusive rocks located in the upper section. This erosion corresponds to the canyon erosion stage that gave rise to deep canyons both in the Puna Surface and the valley erosion stage. This second stage corresponds to the lower section of the basin where the valley is bigger, with moderate erosion slopes. The drainage system of the basin is detrital. In some sectors, the radial type is observed; its waters flow to the River Santa, which is the main collector of the region. Due to its topographic characteristics (width and slope), this area constitutes a deposition zone of coarse material from the high parts of the basin. The area of Palo Redondo dam is located on the low part of Palo Redondo ravine, lower than the mouths of its main tributaries. For the purposes of the study, an area covering 400 m downstream to 400 m upstream of the projected axis has been considered. The zone of the valley where the closure works will be located presents an almost uniform relief. The left abutment will lie on a hillside of 45° of slope; the main body of the dam will occupy the bottom of the valley of 500 m in width; and the left abutment will be supported by a ridge that descends at 25° to 300 masl elevation, and 35° to t he bottom of the ravine.

5.3.2 Moche-Chicama water conveyance layout

The Third Stage of the Main Canal starts at chainage 0+312.75 which corresponds to Km 65+114.00 of the 2nd Stage, immediately after the side Intake that derivates from Principal Moro canal on the right side of the Moche Valley, and ends at the Terminal Waste Rock Facility located at chainage 112 + 700.00 for a distance of 111.088 km. The first water conveyance sector, of about 45 Km in length, located between the River Moche and the Southern limb of Chicama Valley, presents alluvial terraces alternated with rocky formations; the alluvial

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terraces are of desert nature and flat undulated topography, cut by eventual runoff streams which shall be crossed by the water conveyance works. The conditions for the water conveyance siting are favorable with the exception of a sector of about 1.5 Km in which expansive soils have been detected. There are quarries of materials in various points along this sector. In the sector, between chainage 69+968 and chainage 81+900 approximately, the canal will travel across cultivated lands (sugar cane and then cotton); then, it will cross a spiny forest and pasture sector, all of them within the alluvial terraces of Chicama Valley, with sandy silt soils of sensibly flat relief, which present appropriate conditions for the construction of the canal; however, the aforementioned sector (sugar cane cultivations) where irrigation is more intense, may present points where the water table will be near the ground surface; both in the cultivated and in the forest areas, the topsoil has an average thickness of 0.5 meters. The rocky sectors are of hilly topography, comprised by rocky hills and spurs that constitute the buttresses of the Andean Western Mountain Chain. The water conveyance works will cross this formation by means of three tunnels with a total length of approximately 17.70 Km. Then, the canal exits the Chicama Valley and crosses the Mocán ravine, which has a wide and shallow waterway; at this point, the canal enters a desert zone, where, similar to the Chicama Valley, runs entirely through loose material, as there are no rocky sectors. In the desert sector, between chainage 82+040 and 112+700, the ground presents a very undulated relief, as a result of runoff water on materials that are susceptible to erosion, transportation and sedimentation combined with Aeolian action, which has given rise to the formation of big depressions. In this zone, the canal follows a sinuous trajectory with alternation of cuts and fills. The ground, which is mainly comprised by silty sand, is apparently appropriate for the construction of the canal, since it is generally made up of compact layers as seen in the River Seco ravine; in a few sectors there is loose Aeolian sandy coverage; instead, there are stable surfaces corroborated by the permanence of stakes of the layout performed several years ago. Moreover, along its path, there is a notorious existence of archaeological remains, aspect that was taken into account for the water conveyance layout in order to minimize any impacts.

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Several agricultural and road infrastructure works will be affected by the water conveyance works, which will require crossing engineering structures. The River Chicama waterway, which is longitudinal to the Valley, is wide and shallow; in the zone where it is crossed by the Main Canal, that waterway is of about 700 m in width. Between chainage 88+000 and chainage 112+700; that is, until the final point of the water conveyance layout, the canal crosses soils made up of gravel and silty sand of flat topography with a few irregularities that are shown especially at the end of the layout, which is the beginning of an area with presence of stabilized dunes. The layout crosses several ravines in which there are eventual runoffs; the most important ones are the Santa María ravine in the Chicama Valley, and Río Seco in the desert sector; in both cases, special structures for crossing and protection purposes have been placed; the others are minor ravines requiring only canoes, culverts or deliveries. Also, several canals and roads are intercepted, including the North Pan American Highway. Access to the canal route is made from the North Pan American Highway and through the Chicama Valley road network; the desert sector is located at a short distance from the Pan American Highway in its most part.

6. DESCRIPTION OF THE FIRST AND SECOND STAGE EXISTING

CONSTRUCTION WORKS

As part of the Chavimochic Project development, the First and Second Stage Construction Works have been executed and are currently in operation, which, for the effects of this Concession process, correspond to the so-called Existing Construction Works. From the start of the Operation period, the Concessionaire will be responsible for the operation and maintenance of the major hydraulic infrastructure constituted by the First and Second Stage Construction Works. The Concessionaire shall be fully responsible for the operation of the existent infrastructure for the whole concession term, and at the end of the concession, the Concessionaire shall deliver the works in good working order. For general informational purposes of the Bidders, this section shows a summarized description of the referred works, and detailed information can be found in the Project Data Room.

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6.1 First Stage

It includes the Intake on the right margin of River Santa, the Diversion Canal and Main Canal to the left margin of Virú Valley, the Sand Trap, Conveyance and Pur Pur Canal, the Virú Hydroelectric Power Station of 7.5 MW, the Tanguche Micro Hydroelectric Power Stations and the Sand Trap, the Pressure Irrigation System of Sector IV, the Secondary Irrigation System of Chao, the Discharge Works and tie-in to River Virú and Surface Drainage System of Chao and Virú Valleys.

6.1.1 Intake at 412 masl

It was designed and built to bypass 105m3/s. The Chavimochic Project Intake is defined as a conventional structure of mixed barrage (fixed and mobile), of direct catchment, with double overflow and energy dissipation pools. The main elements are as follows:

� Fixed Barrage

It is comprised by a concrete keel moulding, with slope sheet profile that occupies the left half of the waterway (34.00m in width) and bounded by the left margin walls and the central wall. Its main function is to keep a normal level of operation at elevation of 424.50 in low water period and in floods less than 750 m3/s.

� Mobile Barrage or Gate Spillway

It is located in the right zone of the waterway and it is comprised by three radial gates of 9.50m in width by 6.70m in height each one, of the overflow type, separated by pillars of 2.50m in width at the center and 2.25m in width at the ends.

� Gravel Chamber Canal

It is located between the first and second overflow, of variable width and a slope of over 2%; at the beginning of this canal, there is a ramp of high head and, at the end of this canal, there is a transition to the gravel chamber canal gate of 5 m in width by 6.70 m in height. Downstream the gate, the canal continues towards its delivery to the gravel chamber pool of the gate spillway.

� Catchment Mouth

It is the structure that receives and conveys the flow to be diverted from the River Santa. The mouth structure is introduced in the rocky parameter and consists of two well-defined zones; the first one is open-

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cut excavated and the second one is excavated in tunnel of conic trunk section connecting to the head tunnel. The second overflow has a crest elevation at the same level as the overflow (420.90 masl); the catchment canals have a slope of over 5% between the section where the fine grating is located and the section where the catchment gates are located. These catchment gates are of 4m in width and 1.50m in height and will operate under normal conditions with load of water. The maneuvering area of the mouth is located at an elevation of 435.50 masl.

The Catchment Mouth has the following functions: - Divert any catchment flow between 0 and 95 m3/s as required in a

certain moment, keeping the normal level of operation in the river (elevation of 424.50 masl), and regulating the catchment gate openings.

- Remove and discharge to the tunnel all solid material that may

have passed through the fine grating; therefore, the underlayment between this one and the gates should be over 5%. If necessary, the cleanliness should be performed by means of water hammering, depressing the level with the cleaning gates.

6.1.2 Improvement of the Intake

Refurbishment and modification of part of the existing Intake by implementing any substantial modifications to the existing works, together with the modification of the mobile barrage, upgrade of the diversion tunnel for low water period catchment, and others, with the purpose of improving its operation and annual maintenance.

6.1.3 Sand Trap

It is a large-scale hydraulic structure with discharge capacity of 2.27 million tons/year of sediments, reducing this way the dead volume of sediments for the future Palo Redondo impoundment in approximately 100 million m3 in the 50 years of economically service life. The structure is located between chainage 4+274.37 and chainage 4+497.37 of the Main Diversion Canal. The main design features of the sand trap are as follows:

• Type of purge : Intermittent • Design Quantity at Entrance of the Sand Trap : 90 m3/s • Minimum Quantity at Entrance of the Sand Trap : 28 m3/s • Quantity of fine purge at bays : 8 m3/s • Minimum diameter to sediment : 0.15 mm • Maximum concentration of sediments at Entrance : 20.0 gr/l

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• Average concentration of sediments at Entrance : 5.6 gr/l • Design Quantity at Exit of the Sand Trap : 82.0 m3/s

6.1.4 I Stage of the Main Canal (Diversion Canal)

The Main Canal has a capacity of 92m3/s from the Intake to the Sand Trap (km 4+250); from this place to km 20+530, the Canal has a capacity of 88m3/s, while at the end of the Palo Redondo Dam, it has 78m3/s of capacity. It comprises a series of works with the purpose of discarding and eliminating sediments, only conveyance, saving level differences and reducing or dissipating the energy as well as service and protection works.

� Open Canals

These canals have two section types: Trapezoidal and Rectangular. The trapezoidal section canals have a total length of 3,763m and are lined with simple concrete; their section has a base or bottom of 3.50m and 1:1 inclination slopes at most, with conveyance capacities of up to 90 m3/s. Some sectors of the canal have been built with a rectangular sector due to the characteristics of the sector it crosses (rocky outcrop zones between the Head Tunnel and El Silencio Ravine, with an accumulated length of 1,020m). They are comprised by reinforced concrete floor and walls with pre-fabricated beams that brace the walls and 9-water stop vertical joints. The design freeboard makes it possible, in extraordinary situations, to convey flows that are bigger than the design flows without any overflow risk.

� Covered Ducts

These ducts have a rectangular section with vaulted ceiling (total length of 720m) made of reinforced concrete; they are located in sectors where there is risk of silting due to the dynamic presence of Aeolian sands. Also, there are covered ducts with horseshoe section to cross ravines between tunnels without altering the hydraulic section (total length of 535m).

6.1.5 Tunnels

Along the Main Diversion Canal, 10 tunnels were constructed, all of which have a horseshoe-type section with diameters ranging from 6.40m for 90 m3/s capacities to 5.54m for up to 82 m3/s capacities. All of them are lined with concrete of f’c 280 kg/cm2 (Head Tunnels 1 and 2) and concrete of f’c 210 kgr/cm2 (Tunnels 1 to 7). The Head tunnel T-AD2 does not have lining in gables and vault.

� Inter-basin tunnel

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It starts at Km 25 +481.109 from the Diversion Canal and ends at the start of the Main Canal, connecting this way the Rivers Santa and Chao basins. It is of 10,076 m in length and it has a horseshoe-type section, with 5.32m in diameter at the entrance sector and 5.92m at the exit sector, and a maximum conveyance capacity of 78 m3/s. It is lined with concrete in a sector of 7,818m (concrete of f’c= 210 km/cm2 and 0.40m in thickness). The remaining 2,356.10 m (initial sector) is sprayed with concrete for a service life of 10 years, period of time provided for the execution of the Restitution Tunnel II of Palo Redondo Dam that will replace this sector.

6.1.6 Crossing Construction Works at the River Virú

� Load Chamber

- Rectangular entrance transition of 25.60 m in length, chainage 44+461,

bottom slope S = 0.034. - Load chamber comprised by two buildings of 9.95 m in width, 43.50 m

in length, slope S = 0.07; each one with a purge system for sediments and bottom gate of 1.80 m x 1.80 m.

- Pressure chamber, it contains the snaps of the 3 pipes of 2.50 m in

diameter each one, together with aeration pipe. - 05 cross-sectional overhead chutes of b = 2.50m and h = 2.20 m. - 02 cofferdam sets of two blocks each one, for the load chamber, and

also for the spillway with their respective electric hoists.

For the purposes of timely water supply operation, maintenance and regulation, the second crossing line of River Virú was also executed.

� Exit Chamber

- Covered entrance duct for each one of the three pipes from chainage

3+445.01 to chainage 3+478.88; of variable section.

- Cofferdam area of rectangular section of 6.07m. by 10.70m. It has 01 cofferdam set with two blocks, of 3.30m. x 2.50m. each block, together with its respective manual hoist of 3 tons.

- Trapezoidal-shaped exit chamber of 10.70m. at the entrance and 5.54m. at the exit (Entrance transition to the Tunnel) and 19.50m. in length, to chainage 3+500.66, where the covered duct commences with

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8.00ml. in length to chainage 3+508.66; equivalent to 48+080.00 of the Main Canal.

6.2 Second Stage

6.2.1 II Stage of the Main Canal

It comprises the First Line of Virú Siphon and Virú-Moche Main Canal from chainage 83+289.56 to chainage 155+000.00; in this point, it has a capacity of 50m3/s. Also, a Potable Water Treatment Plant was built for the city of Trujillo and part of the Drainage System of the Moche valley.

� Open Trapezoidal Canals

The trapezoidal-section open canals of the Virú-Moche Main Canal were built with a total length of 47,780.02m and were classified according to the type of ground in which they were founded; as a result, there are up to three canal types made of lined simple concrete of f’c = 175 kg/cm2.

� Open Rectangular Canals

The rectangular-shaped open canals were built as required by the ground topography; the rectangular canal structures are made of reinforced concrete, comprised by walls of variable lengths. The open rectangular canals, constructed at the works of the Virú-Moche Main Canal have a total length of 1,857.24m.

� Main Canal Tunnels

Along the second stage of the water conveyance system – Virú-Moche Main Canal, twelve (12) tunnels have been made with a horseshoe geometric section of 5.10 m in diameter, lined with reinforced concrete and with supporting structures. The tunnels were classified according to the type and quality of the rock mass in which they were built; that is why, they had different treatments regarding their support and contact-type injections.

� Covered Ducts

The covered ducts in the Virú-Moche Main Canal were made to avoid the difficulties that may affect the structure in the future, the Aeolian sands that are typical in such areas. They were made of box-type with pre-fabricated covers with hoisting hook, reinforced concrete of f’c = 210 kg./cm2 and a total length of 1,738.93m.

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6.2.2 Potable Water Treatment Plant

This work shall not be part of the Concession; however, it will be supplied with waters from the River Santa by the Concessionaire, with a current annual volume of 30MMC, in addition to 31MMC whether in this same place or in another place as further decided.

6.2.3 Virú Hydroelectric Power Station

Also, this Hydroelectric Power Station is not part of the Concession; however, it will still be supplied by the Concessionaire of the Major Hydraulic Infrastructure.

7. DEVELOPMENT OF THE CONCESSIONAIRE’S OBLIGATIONS

This section aims at providing basic information on the Concessionaire’s obligations regarding the making of the New Construction Works, the operation and maintenance activities and the Service provision. This information is referential, with the exception of compulsory aspects and specifications, and it was selected based on current and available studies at the Chavimochic Project Data Room. The Bidder will develop the project in accordance with its own assessment and experience, and pursuant to the specifications set out in these Terms of Reference. The adjustments, changes and any other modification of the compulsory parameters and features, made by the Bidder in its Technical Proposal, will be deemed as grounds for rejection of such Proposal. For construction organization and operation and maintenance administration purposes, the Concessionaire’s obligations were broken down into a First Phase and a Second Phase, both of them duly differentiated according to their purpose, contractual execution conditions, location, and financing sources. The term for the execution of the New Construction Works is expected to be of 48 months at most. The Concessionaire is able to take measures for the optimization of this term in order to advance the start date of the Operation period. The preliminary description of the Concessionaire’s works and activities for the Concession term, without detriment to its complementation once the revision and update studies are completed by the Technical Advisor, is as follows:

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7.1 First Phase Activities:

They correspond to the design and making of the First Phase New Construction Works comprised by Palo Redondo Dam and ancillary works, which are part of the Third Stage of the Project. Also, in the Operation Period, they correspond to the operation and maintenance activities of the aforesaid First Phase New Construction Works.

7.1.1 Construction Activities

The main characteristics of the First Phase New Construction Works are described as follows:

a) Palo Redondo Dam and Reservoir

In the technical conception of the Chavimochic Project, the construction of Palo Redondo Dam aims at regulating the waters collected from the River Santa and attending the projected demands in the project development throughout the year. According to the Feasibility Study and the assessments of the Technical Advisor, the plan is to create an reservoir in Palo Redondo ravine, by constructing a dam of loose and zoned materials, CFRD-type, with a concrete wall on the upstream slope,. By respecting the aforesaid typology and the location of the axis as described in the Existing studies and other Condition Parameters, the Bidder may choose the conditions of design that it deems more convenient for the construction of the Palo Redondo Dam, provided that the adopted solutions guarantee the hydraulic provisions, the operational conditions, the safety conditions and the service life projected in the original designs of the dam. In this context, the following specifications are considered compulsory:

Dam:

Type : CFRD

Crest elevation of CCR-type dam : 347 masl

Natural Dike:

Waterproofing Treatment : Obligatory

Spillway:

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Type : _____

Maximum discharge : ____ m3/s

Crest elevation : ____ masl

Reservoir:

Maximum Water Level Elevation : 344 masl

Maximum Volume : ____ MMC

Useful Volume : 366 MMC

Intake and Diversion Structure:

Elevation : ____ masl

Maximum Flow : ____ m3/s

Design Flow : ____ m3/s

The dam axis will be located on the site described in the Existing studies, at the straits of Palo Redondo ravine limbs, upstream the town of Tanguche. The ancillary works, facilities and equipment related to Palo Redondo dam comprises access roads, drainage galleries, intake structure, bottom discharge structure, minimum environmental discharge, control well, diversion tunnel, hydromechanic facilities, amongst other components described in the Existing studies.

7.1.2 Operation and maintenance activities of the F irst Phase New

Construction Works

In addition to the making of the New Construction Works, the Awarded Bidder is obliged to operate them in order to comply with the objectives of their construction, and to maintain them, guaranteeing the operation of the whole system. The maintenance activities of the First Phase New Construction Works comprise the preventive maintenance, routine maintenance and emergency or corrective maintenance, pursuant to the provisions set out in the Concession Contract.

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The Awarded Bidder shall consider the preparation of the respective operation and maintenance manuals corresponding to the First Phase New Construction Works as part of the whole system.

7.2 Second Phase Activities

It corresponds to the design, construction, and operation and maintenance activities of the Second Phase New Construction Works, in addition to the operation and maintenance activities of the Existing Construction Works and the Service provision to the Project users. Regarding the Second Phase New Construction Works, this section aims at providing information on the works to be made from the final chainage of the Main Canal in the Moche Valley to the final chainage of the new sector of the Main Canal (Moche-Chicama-Urricape sector), including connection works, open canal, covered ducts, conveyance pipes, tunnels, engineering structures and intakes along the route. The Second Phase New Construction Works also consider the design and construction and equipping of the following works: third crossing line of River Virú; intake system and conveyance to Urricape lands below the Main Canal; refurbishment of the intake system along the Main Canal built between the First and Second Stage of the Project; and control and automation system of the New Construction Works and Existing Construction Works. A more detailed description of the construction, operation and maintenance activities considered part of the Second Phase will be provided as a complement to these Terms of Reference, upon completion of review, update and complementation studies currently made by the Technical Advisor.

7.2.1 Operation and maintenance of the Second Phase New Construction Works and the Existing Construction Wo rks

In addition of making the Second Phase New Construction Works, the Concessionaire is obliged to operate them in order to comply with the objectives of their construction in coordination with the First Phase New Construction Works and the Existing Construction Works. Also, it is obliged to maintain such works together with the Existing Construction Works guaranteeing the system functionality for Service provision purposes in benefit of all Project users.

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The maintenance activities of the New Construction Works comprise the preventive maintenance, routine maintenance and emergency or corrective maintenance, pursuant to the provisions set out in the Concession Contract. Regarding the Existing Construction Works, the Awarded Bidder will be fully responsible, at its own expense, for the execution of preventive maintenance and routine maintenance of infrastructure and facilities, also in agreement with the provisions set out in the Concession Contract and in the respective Operation and Maintenance Manual. If applicable, the Awarded Bidder will also be responsible for the emergency or corrective maintenance of such works; however, the economic coverage of its intervention will be limited to the amount of the respective insurance policies, except for the exceptional cases provided for in the Contract. The Awarded Bidder shall consider the preparation of the respective operation and maintenance manuals, which will comprise the Second Phase New Construction Works, in addition to the Existing Construction Works.

7.2.2 Conveyance and water delivery Service to Chav imochic Project users

The Service provision is supported on an analysis of water resource availability, water balance and the water dispatch program for the Chavimochic Project users included in the Existing studies. The Concessionaire is obliged to provide the Service to the various Chavimochic Project user types, with the exception of the old Chao, Virú, Moche and Chicama valley users, who receive their water allocations from common intakes. In accordance with the characteristics of the various user types, the Concessionaire will enter into the following types of agreements:

a) The Concessionaire will enter into Service Agreements with the

following user types:

• Users of intervalleys who purchased land auctioned by the Project.

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• Users of old valleys that, due to the dimension of their irrigation surfaces, have to use specific intakes from the Main Canal.

• Chavimochic Special Project regarding the water allocations to the potable water treatment plant of Trujillo.

• Chavimochic Special Project regarding the water allocations to the Virú Hydroelectric Power Station.

• Hydroelectric Users of Cola and Pie de Presa power stations. The rate schedule applicable to water service contracts for agricultural purposes shall be adjusted to the provisions set forth in Law 28029 and its Regulation. The water allocations and Basic Rates to be applied to the various user types are the ones detailed in the Feasibility Study and other Existing Studies. The Concessionaire may provide service for other uses provided that it is authorized by the Grantor and the corresponding service agreements are entered into with the Concessionaire.

b) Regarding water allocations to users in the old valleys that use common

intakes, the Concessionaire will sign, on a valley-per-valley basis, an agreement for bulk water delivery with the Chavimochic Special Project, which will be in charge of distributing to the various User Boards, collecting from them the value of amortization and operation and maintenance components of the major hydraulic infrastructure, pursuant to its current rate schedule.

8. EXECUTION PLAN FOR ADJUSTMENT OF THE EXISTING

CONSTRUCTION WORKS

No later than the start of the transition period between the Construction Period and the Operation Period, the Grantor, through the Chavimochic Special Project, will carry out an adjustment program for the Existing Construction Works, in such a manner that the outstanding preventive, routine or corrective maintenance activities are identified and performed by that entity, as a requirement for the delivery of the indicated Existing Construction Works to the Concessionaire. The adjustment program of the Existing Construction Works will be defined by the Grantor, with participation of the Supervisor no later than upon termination of the second year of the Concession term; and will be submitted to the Concessionaire for consideration before the approval of the Supervisor.

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9. EXECUTION PLAN FOR THE NEW CONSTRUCTION WORKS

The Concessionaire will organize the construction process of the New Construction Works in compliance with the provisions set forth in its Technical Proposal and corresponding Technical Files. In the construction process, the Grantor will not acknowledge bigger quantities or the recalculation of costs for the works due to errors or omissions in the Technical Files, with the construction risk being attributable in this case to the Concessionaire. Nevertheless, the Grantor will do acknowledge the readjustment of construction prices due to inflation; to that effect, the corresponding polynomial formula system will be included in the Concession Contract. Moreover, the Grantor will acknowledge the higher costs and longer terms as a result of extraordinary geological events, exclusively related to underground works and foundation and abutments of Palo Redondo Dam. Furthermore, for the financial structuring of the Concessionaire, the Grantor will acknowledge and grant work progress certificates and geological event certificates.

9.1 Making of the First Phase New Construction Work s

It has been planned that the First Phase New Construction Works will be completely executed within the Construction Period. To that effect, the Concessionaire, prior to the termination of the Start Period, shall have submitted the Technical File N° 1 for the supervisor’s approval, which shall constitute the basis for the construction of the works. Exceptionally, it may be possible to start such works in the Initial Period provided that the Concessionaire plans to have the partial Technical File corresponding to the initial part of the First Phase Construction Works, and that there are co-financing resources deposited in the trust.

9.2 Making of the Second Phase New Construction Wor ks

The whole Second Phase New Construction Works will also be executed within the Construction Period. The Technical File for these works will be called Technical File N° 2 , which shall be duly approved by the Supervision prior to the termination of the Initial Period of the Concession.

10. LEVEL OF TECHNICAL PROPOSALS AND QUALITY DEMAND S

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The technical proposals of the bidders shall be outlined under a global approach and a specific approach differentiating the execution Phases of the New Construction Works. The proposal shall be made in accordance with internationally accepted practices, rules and techniques and shall include drawings and work specifications at pre-feasibility level, in addition to the main technical specifications of the technology for construction that was offered. The technical documentation will be prepared with a sufficient level to allow an objective assessment of the following aspects:

• Technical solution

• Conditions of design

• Construction process

• Materials, equipment and instruments to be used

• Construction Works Schedule of Quantities

• Construction Works Budget

• Program of preparatory activities, construction and maintenance

• Technological tests

• Preliminary version Operation and Maintenance Manuals (MOM)

The projects and studies that are made shall include the worksheets and procedures, as well as applied rules and recommendations. Also, the preliminary version of the Operation and Maintenance Manual will contain the basic proposal for the future operation of the Integrated Hydraulic System (Chavimochic Project, Stages I, II and III). Only the technical proposals that comply with the minimum required specifications will be accepted for the qualification process, and it shall be assumed, at the expense of the Bidder, that the design and quality conditions will guarantee a service life of 50 years without major repairs regarding the infrastructure works and 25 years regarding the hydromechanic equipment. The obligation to develop the Technical Files at final project level and the preparation of detailed engineering drawings and work specifications at execution level, will be demanded solely to the Awarded Bidder. Also, it will be demanded to submit the detailed construction program and the final budget formulation of the works with description of items, schedule of quantities and unit prices including the analysis made for its formulation. Moreover, it will be demanded to submit the specific and general

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specifications of the construction procedure as well as the supply and installation of equipment and instruments. In the preparation of the Technical Files at execution level, no changes shall be admitted if they denature the original Technical Proposal; the following indicators of the Bidder’s Technical Proposal are assumed as final: technical solution; main technical specifications; structure of the construction works budget and terms of preparatory, construction and equipping activities. Both the Technical Files and the final version of the Operation and Maintenance Manual will be subject to the approval of the Specialized Supervisor and the official technical body indicated by the Grantor. In the execution process of the New Construction Works, both in the First Phase and the Second Phase, the Concessionaire will submit to the Grantor and the Specialized Supervision, monthly progress reports, duly assessed, as specified in the Concession Contract.

11. SUPERVISION OF TECHNICAL AND ECONOMIC OBLIGATIO NS OF THE CONCESSIONAIRE

The Grantor shall audit and supervise the compliance with technical and economic obligations of the Concessionaire, both in the Construction Period and in the operation and maintenance period of the Concession works. To that effect, consultancy companies specialized in the lines of business that correspond to each Concession period will be selected through PROINVERSIÓN, and these companies will execute the Supervision acting with the official support of Chavimochic Special Project, as accredited by the Grantor. For the execution of Specialized Supervision activities in the Construction Period, in addition to the provisions set forth in the Concession Contract, consideration will be additionally given, for the purposes therein contained and insofar as it is not inconsistent with the provisions set forth in the Concession Contract and the Terms of Reference of the specialized supervision, the Legislative Decree Nº 1017 – State Contracting Law and its regulation approved by means of Supreme Decree Nº 184-2008-EF (or replacement regulations), amongst others, to the obligation to keep the respective construction logbooks.

12. ENVIRONMENTAL PROTECTION MEASURES

The Third Stage of the Project is provided with environmental impact studies and environmental management studies, approved at feasibility level by the competent environmental authority (with the exception of

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Moche-Chicama-Urricape conveyance), which are available for consultation purposes in the Data Room. The Concessionaire shall perform, prior to the start of construction activities, final and complementary environmental impact studies and environmental management studies as required by the environmental authority. Also, the Concessionaire shall apply the environmental management plans on the planning, construction and operation and maintenance stage which will be submitted together with the Operation and Maintenance Manual of the System, which shall comply with national environmental regulations and those prepared by international financing organizations, when applicable.

13. REFERENCES TO EXISTING STUDIES

This section aims at providing basic and descriptive information of the diversion works considered in the Concession scheme and these Terms of Reference. This information was selected based on the Existing studies available at the Data Room of the project. Each Bidder shall prepare its own project according to its own assessment and experience, provided that they comply with minimum or compulsory specifications set forth in the Terms of Reference. Adjustments, changes and any other modification to the described Construction Works, made by the Bidder in its Technical Proposal, cannot be considered as grounds for rejection of such Proposal, provided that they comply with the aforesaid minimum or compulsory specifications. The information contained in this Annex cannot be considered as a recommendation, promise or statement regarding the future of the Concession by the Regional Government of La Libertad, PROINVERSIÓN, its Committee, the advisors on transaction issues or any person related to them. The Regional Government of La Libertad, PROINVERSIÓN, the Committee, the advisors on transaction issues or any person related to them do not assume any obligation or responsibility for the adequacy, security, accuracy or integrity of the information, nor assume making a statement or contractual provision, express or implicit, regarding the information presented in this section.