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					                                ELECTRICITY AUTHORITY OF CYPRUS

SECTION 3 - TERMS OF REFERENCE

The Electricity Authority of Cyprus is an independent, non-profit-making semigovernment
organisation established under the Electricity Development Law Cap. 171 in order to exercise
and perform functions relating to the generation and supply of electric energy in Cyprus and in
particular to:

(a)   generate electricity and to maintain and work any Authority installation or Authority
      undertaking,

(b)   secure the supply of electricity at reasonable prices,

(c)   carry on any business usually associated with an electricity undertaking,

(d)   promote and encourage the use of electricity and especially the use thereof for agricultural,
      industrial and manufacturing purposes,

(e)   promote and encourage the development of the natural resources of the Republic of
      Cyprus in connection with the generation of electricity,

(f)   make regulations in accordance with the provisions of this Law,

(g)   advise the Government through the Ministry of Commerce, Industry & Tourism on all
      matters concerning the generation, transmission, distribution and utilisation of electric
      energy.

The Electricity Authority of Cyprus has decided to invite tenders from Independent Risk and
Insurance Management Consultants who will undertake a comprehensive review of the
Authority's present insurance arrangements and risk management and to ensure that they fully
respond to the needs of the Authority. To draw up a programme of proposals for an insurance
audit risk analysis, identification of areas of various categories of risks and hazards and establish
which should warrant protection by insurance and which should, if necessary, be self-insured in
the most cost-effective way.

Terms of reference

1. To evaluate the Authority's financial capability to retain risk and to recommend how this self-
   insurance capability should be deployed to the best advantage.

2. To identify and evaluate the major physical and non-physical risks to which the Authority is
   exposed.

3. To recommend all reasonable and economic measures which the Authority should take in
   order to manage, reduce or eliminate risk.

4. To design an insurance programme, including preferred policy wordings and "stop-loss"
   arrangements as appropriate.

5. To establish the extent to which international reinsurance will be necessary to support the
   programme.

6. To draft a proposed corporate risk management philosophy statement and to assist you in
   promoting risk management awareness throughout the Authority.

7. To advise on and organise the insurance and risk management training requirements of the
   Authority's staff.


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8. To undertake an annual risk management review.

9. To provide risk management and insurance advice in respect of the Authority's proposed
   construction programme including risk assessment, outlining of insurance options available
   and drafting of insurance/liability clauses in Invitations to Bid/ Conditions of Contract.

PLAN OF ACTION

The Electricity Authority of Cyprus proposes the following plan of action which however may be
tailored to the needs of the two parties based on the prevailing conditions of the Insurance
market.

Phase 1               To conduct an audit of the Authority's existing insurances and a risk survey
                      and analysis, and to submit a report with recommendations for rectifying any
                      deficiencies in existing policies.

Phase 2               To formulate and submit proposals for total rationalisation of the Authority's
                      insurance portfolio with appropriate levels of self-insurance within a package
                      insurance programme.

Provided that the award will take place by 30/9/2002, Phase 1 must be completed by
30/10/2002 and Phase 2 must be completed by 31/12/2002.

The above programme would be conducted in full collaboration with officers of the Authority, and
the Authority would not be committed to implement Phase 2 until they had considered the report
on Phase 1.

The successful tenderer undertakes to act in a fully professional manner and to safeguard the
security of any information provided to them. In undertaking this assignment, they would be
totally independent of any insurer and/or reinsurer and/or insurance or reinsurance intermediary
or broker.

The Authority has an in-house Insurance Department with facilities for securing insurance covers,
assessing and controlling risks and dealing with claims hence the successful tenderer will work
with the Authority's staff in ensuring that the insurance requirements are met in the most cost-
effective way and in the most cost-effective risk reduction measures.

Should it be necessary, the successful tenderer, as part of his comprehensive service to power
utilities, may be called on to provide, if necessary, training facilities for the Authority's staff,
particularly in application of insurance and risk management, which are of special interest to
power utilities.

It is a prime consideration that the tenderers have previous experience in working with the power
industry and in particular that they have undertaken or continue to undertake one or more of the
roles of risk and insurance consultant and risk manager.

The tenderers to provide a list of electricity production and supply industry clients and their
experience in dealing with both construction and operational risks involved in power generation
plants and of transmission and distribution systems. To provide proof of his full range of risk
management and insurance skills specially developed for the power industry.

REMUNERATION

The remuneration of the successful tenderer will be on the method of fee-charging on a pre-
agreed fixed fee for the whole assignment. However should there be a need for extra services a
daily/hourly rate for work done may be agreed.

Tenderers to enter their fees on the attached Schedule.


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The Authority's present Insurance Portfolio:

EAC INSURANCE PORTFOLIO
                                                     PERIOD OF      COMMENCEMENT        EXPIRY
              INSURANCE POLICY
                                                    INSURNACE           DATE             DATE
  1   All Risks Policy                               1-year basis     01/07/2002       30/07/2003
  2   Boiler Insurance                               5-year basis     01/04/2001       31/12/2006
  3   Motor and Machinery                            5-year basis     01/03/2002       28/02/2005
  4   Comprehensive Dishonesty                       5-year basis     01/03/2000       28/02/2005
      Disappearance & Destruction Policy
  5   Public Liability                              5-year basis      14/02/1999       13/02/2004
  6   Employers Liability                           5-year basis      01/05/1999       30/04/2004
  7   Group Personal Accident (EAC)                 5-year basis      01/01/1999       31/12/2003
  8   Hull-Port Risks                               5-year basis      01/08/2001       31/07/2006
  9   Marine, Cargo Open Cover                      5-year basis      18/07/2000       17/07/2005
 10   Care Free Travel Policy                       5-year basis      01/01/1999       31/12/2003
 11   EAC Group Life Insurance                      5-year basis      05/08/1998       04/08/2003
 12   Group Personal Accident (voluntary)           5-year basis      01/05/1998       30/04/2003
 13   Group Life Insurance (voluntary)              5-year basis      01/05/1998       30/04/2003
 14   Valuers & Consultants for EAC                 5-year basis      01/01/2001       31/12/2005
      Plant, Machinery & Equipment

Key Statistical Figures for 2001

Number of Generating Stations 3.

(a)   Dhekelia Power Station: 6x60MW Turbogenerator sets and ancillaries.

(b)   Vasilikos Power Station: 2x130MW Turbine Alstom generator sets and ancillaries.
                               1x37,5MW Gas Turbine

(c)       Moni Power Station: 6x30MW English Electric/Parsons turbogenerator sets and
                              ancillaries.
                              4x37,5MW Gas Turbines

Installed capacity 9875 MW

Total Units generated 3551,8 GWh

Transmission Substations

Total number of Transmission substation                    44
Total number of 66/132kV interbus substation               13
Total number of 132/11kV transformers                      41
Total number of 66/11kV transformers                       72

(d)   Electricity sales 3131GWh

(e)   Number of consumers on supply 385452.

The tenderer may at his own expense, visit the Authority's offices for obtaining further information
or clarifications.

Prospective Tenderers may contact the Authority's Administration Officer A' Mr Kleos
Kleanthous at the Authority's Head Office on telephone no 00357 22845000 or direct 00357
22845062 or on fax no 00357 22761344 for any clarifications.



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