1. 1 April 2008 April 2008 Process, Challenges and Practical Tips Van Ekambaram, Ph.D. Vice President – URS Corp. Winning Contracts with the IDB Group

2. 2 URS Corporation (www.urscorp.com) Provider of environmental consulting and engineering design services Headquartered in San Francisco, CA Over 56,000 employees and over 300 offices worldwide Offices in N. and S. America Over ten years working with IDB Who are we?

3. 3 We wanted to share our experience with IADB in winning and executing projects in Central and South America. Share some practical tips that could be useful to consulting industries interested in working with IADB. Discuss the project and process challenges in working on IADB projects. Why are we here?

4. 4 Winning contracts with the IDB Group Step 1 – Understand IDB Private Sector Investment Strategies  IDB provides financing to develop fixed- income capital markets in Latin America and the Caribbean.  Infrastructure sectors - Water & Sanitation; Transportation (roads, railroads, pipelines, ports, airports); Energy (power generation, T&D); Telecommunications.

5. 5 Step 2 – Understand IDB Transaction Cycle Initial Desk Analysis of Eligibility Letter of Intent & Mandate Letter Due Diligence Legal/Technical/Environmental/Social/ Economic/Insurance & Financial Analysis Winning contracts with the IDB Group

6. 6 Step 2 – Understand IDB Transaction Cycle (contd.) Negotiation of Terms and Conditions Board Approval Financial Closing/Disbursement Construction/Operations Phase Monitoring Pay Requests/Disbursements Project Completion

7. 7 Winning contracts with the IDB Group Step 3 – Understand Consultant Role  IADB uses outside experts for independent technical, environmental, social, and legal analysis of projects.  IADB also uses experts for independent monitoring of the performance of IADB- financed projects.  Provides validity to financing decisions.

8. 8 Winning contracts with the IDB Group Step 3 – Understand Technical Consultant Role: Typical Services  Environmental and Social Due-Diligence  Construction- and Operations-Phase environmental monitoring  Independent Engineering/Technical Due-Diligence  Independent Engineer Monitoring

9. 9 Environmental and Social Due Diligence  Information Review (Environmental Reports, ESIA, ESMP, H&S Plans, permits/licenses, etc.)  Site Visit - Visit areas of direct/indirect impacts by specialists, meet local regulatory authorities, other  Due Diligence Report (prescribed format)

10. 10 Environmental Monitoring Construction-Phase Monitoring (air, water, waste, health and safety, social) – monthly, quarterly ? Performance Test Procedures Operations-Phase Monitoring (may or may not include independent samples) – quarterly, annual ?

11. 11 Independent Engineering Due Diligence Preliminary Design and Construction Schedule Engineering, Procurement and Construction (EPC) Contract Capital Expenditure Budget Project Operational Agreements Operations and Monitoring Agreements Pro Forma Assumptions and Financial Models Permits and Licenses and Site Visits

12. 12 Independent Engineer Monitoring Construction-Phase Monitoring (Design Review, Procurement Review, Progress Review, change orders, verify mechanical completion) Performance Test Monitoring (test procedures, independent tests, QA/QC) Operations Phase Monitoring (annual monitoring)

13. 13 Power Oil & Gas Chem/ Pharm Manufacturing Mining Services IDB Sectors Power and Oil & Gas = Energy Projects URS Sectors  Multiple Clients Winning contracts with the IDB Group Water & Sanitation Telecommunications Energy Transportation Where is Strength? Step 4 – Know your strengths

14. 14 Winning contracts with the IDB Group Step 5 – Understand IDB contracting Process Three-way Consulting Services Agreement (CSA) among IDB, Sponsor(s) and Consultant Terms of Reference Consultant proposal (scope of work, qualifications, schedule, cost estimates)

15. 15 CSA – Things to include Commercial Terms – invoicing procedures, payment, currency, taxes, changes Independent Contractor Professional Standards Dispute Resolution Mechanism, Notices Other

16. 16 Winning contracts with the IDB Group URS Project examples

17. 17 Termoelectrica del Golfo, Mexico Project Sponsor – Alstom Power and Sithe Energy Project Location – Tamuin, Mexico Petcoke-fired 230 MW captive power plant Onsite Storage of combustion ash Power sold to Cemex and CFE

18. 18 Termoelectrica del Golfo, Mexico Significant Environmental and Social Issues Air Emissions (SO 2, Particulates) Ambient Air Quality on nearby communities and sensitive areas Water Intake and Wastewater Discharge Combustion Ash Handling, Storage Occupational Health and Safety

19. 19 Camisea Downstream Project, Perú Project Sponsor – TGP Project Location – Across Perú Transports natural gas and natural gas liquids Upstream Gas Production in Peruvian rainforest Gas distributed – Lima Liquids - exported

20. 20 Camisea Gas Transport System, Peru Significant Environmental and Social Issues Environmental Issues unique to terrain crossed – rainforest, Andean and coastal Sections Social Issues unique to the sections – indigenous communities, non-contacted peoples Engineering challenges associated with construction in remote areas Accelerated construction timeframe Occupational Health and Safety

21. 21 IDB Process Challenges Three-way consultant services agreement  Scope of work defined/agreed between IDB and consultant  Invoices and payment between Sponsor and consultant Time schedule to complete Due Diligence Reports before board review

22. 22 Project Challenges Staff qualifications Staff location Communication logistics Budget constraints Stakeholder interests in the project Internal / External Politics

23. 23 Questions?