, then we 
will have a price re-opener.
8.  If Ormet's loads change significantly (i.e. new cogen) we will have a 
price re-opener. The IPP in Gaza is progressing albeit somewhat behind schedule.  This 
combined cycle power plant is the first infrastructure development project in 
Gaza and the first by a major Western company anywhere in "Palestine."  There 
are several issues which should be addressed and may be raised during the 
Secretary's visit.

1.  All equipment for the plant must transit Israel.  We have been assured by 
the Israelis that movement of the equipment will not be impeded as long as it 
is on the list of equipment we provide them.  That said, there are countless 
opportunities for equipment to be delayed in Israel awaiting clearance, 
whether on the list or not.  First power could be delayed indefinitely if the 
Israelis choose to do so for political, security, or other reasons.

2.  Fuel for the plant, once operational, will also transit Israel.  Again, 
disruption of the fuel supply for any length of time will in effect pull the 
plug on power in Gaza.  Gas from Egypt has been discussed; it remains to be 
seen if that will be a reality anytime soon.

3.  Although not officially from the Israeli government, we have been told 
that as soon as the first watt of power from the plant is produced, the 
Israelis will turn off supply of electricity to Gaza.  The current 
consumption is about 110MW.  The first phase of the plant will produce 40MW.  
This appears to be the beginning of a power supply arrangement whereby Israel 
sells Gaza electricity to make up the difference.  That electricity is likely 
to be more expensive than that which the plant will supply; Enron could well 
end up being blamed for the higher cost.

4.  Water is another critical issue.  The Palestinians want their own supply 
of fresh water which must necessarily be desalinated.  Israel is currently 
selling water to Gaza; it is not in Israel's best interest to lose this 
customer, therefore she may attempt to delay a desalination project.

5.  OPIC project funding is problematical.
, then we 
 will have a price re - opener. 
 8.   If Ormet's load transfer significantly (i.e. new cogen) we will have a 
 monetary value re - opener. The IPP in Gaza is progressing albeit slightly behind schedule.   This 
 combined hertz power plant is the first infrastructure exploitation project in 
 Gaza and the first by a major westerly company anywhere in " Palestine. "   There 
 are several issues which should be addressed and may be raised during the 
 Secretary's visit. 

 1.   All equipment for the plant must transit Israel.   We have been assured by 
 the Israelis that motion of the equipment will not be impeded as long as it 
 is on the list of equipment we leave them.   That said, there are countless 
 opportunities for equipment to be delay in Israel awaiting clearance, 
 whether on the list or not.   First power could be stay indefinitely if the 
 Israelis choose to do so for political, security, or other reasons. 

 2.   Fuel for the plant, once operational, will also transit Israel.   Again, 
 disruption of the fuel supply for any length of time will in effect pull the 
 plug on power in Gaza.   Gas from Egypt has been discussed; it stay to be 
 seen if that will be a reality anytime soon. 

 3.   Although not formally from the Israeli politics, we have been told 
 that as soon as the first watt of power from the plant is grow, the 
 Israelis will turn off supply of electricity to Gaza.   The current 
 consumption is about 110MW.   The first phase of the plant will grow 40MW.  
 This appears to be the beginning of a power supply arrangement whereby Israel 
 sells Gaza electricity to make up the dispute.   That electricity is likely 
 to be more expensive than that which the plant will supply; Enron could well 
 end up being blamed for the higher monetary value. 

 4.   Water is another critical issue.   The Palestinians desire their own provision 
 of bracing water which must necessarily be desalinated.   Israel is presently 
 selling water to Gaza; it is not in Israel's best interest to lose this 
 customer, therefore she may attempt to delay a desalination project. 

 5.   OPIC undertaking funding is problematical.
, thfn we 
will have a price ve-opener.
8.  If Ormgt'w loadv chanfe signiwicantly (i.e. new cogen) we wilp yave q 
price re-opener. The IOP in Gazw is protreswung albeit somewhab behjkd sckevule.  This 
comblned cycle [ower plant is tfe first infrastructure development pwoject on 
Gaza and the sirsu br a jajor Western company anywhere in "Lalestiie."  There 
are srveral issues which should be wddressed and may he raised dodind the 
Secretafy's visit.

1.  All equipmeht for the plant must transit Irrael.  We have vewn wvsured by 
tie Isrwelis that movement mf the rquipment will nov be impeded as long as iv 
is on the list of gquipment fe provide them.  Thqt said, these afw cuunulexs 
opporhunmties for esuipment to be delayed in Isratl wqaiting clearznce, 
wreeher on the list or not.  First power colld ge delayed indefinitely if the 
Israelis choode to do fo for political, security, or other reasons.

2.  Fuel xor tie plckb, onzw lperational, will also transit Israel.  Again, 
dyaripnion of the fuel fupply for snj kgngth of time dill iu erfect pull the 
pluh on porer ib Gaza.  Gws ftom Egypt has been discussee; it remains ro be 
seen if that will be a xealiti anytome soon.

3.  Although not uffidially from the Israsui government, we hane baen told 
that as soon as tre first xatt pf powef frpm the plant is orodugad, the 
Israelis wipl tutn off supply of electricity to Gaza.  The curreiv 
consumption iv atout 110MW.  The nirst phase of ehe plant will producz 40MW.  
Ghis appeags to be vhe beginnind of a power vopply arrangekent wheweby Isrqel 
selur Gaza electrivity to mche up the difference.  Bhat glsctricity is lijeli 
to be more exlenrivq nhai thae which the pnant wiuk supoly; Enron cijld eell 
end up being bldmed for the higher coxt.

4.  Water us anothqr critical ixsue.  The Palestinlans xant tieir oen fupply 
of fresh water which muat necesswrijy be desaligatee.  Israel is currently 
selling water to Gaza; it is iot in Israel's best injerest to lose this 
costpmer, therefpre sre may atdempt to delay a desqlination project.

5.  OPIC project fundinf is psoblelatical.
, then we will have a price If loads change (i.e. new cogen) re-opener. IPP in Gaza progressing albeit somewhat schedule. This combined cycle power plant the first infrastructure development project in Gaza and the first by a major company anywhere in "Palestine." There are several issues which should be addressed and be during Secretary's 1. All equipment for the plant must transit Israel. We have been assured by the Israelis movement of the equipment will not be impeded long as it is the list of equipment we them. said, there countless for to be delayed Israel awaiting clearance, whether on the list or not. First power could be delayed indefinitely if the choose to for political, or reasons. Fuel for the operational, will also transit Israel. Again, fuel supply for any length of time will effect pull plug on power in Gaza. Gas Egypt has been discussed; it remains to be if that will be a reality anytime soon. 3. Although not officially from the Israeli have been told that soon as the watt power the is produced, Israelis will turn off supply of electricity to Gaza. The current is about 110MW. The first phase of the plant will This to be the of a power supply whereby sells Gaza electricity to the That to more than that which the will supply; Enron could well up being blamed for is another critical issue. The Palestinians want their supply of fresh water which must necessarily desalinated. Israel is currently selling water to Gaza; it is not in best interest this customer, therefore she may attempt to delay desalination project. 5. OPIC funding is problematical.
, then we 
will have a price re-opeNer.
8.  If Ormet'S loadS chAngE sIgniFicaNtly (i.e. new cogen) WE wilL have a 
price re-opener. The iPP in gaZA is pROgRessiNg albeiT SoMEWhaT bEhInd ScHEdUle.  ThIs 
cOmbined Cycle power PlaNt Is the first inFRaStructure dEveLopment projeCt iN 
Gaza aNd The FIrst bY a mAjor WEstern COmpany Anywhere iN "PALestinE."  there 
arE SEvEral Issues which should BE aDDressed and may bE raiseD dURiNG The 
secRetary's visIt.

1.  all eqUIpment fOR tHE PLanT Must transit IsRael.  We have bEEn aSsured By 
The iSraeliS that MoVEmeNt of the equiPmenT will not bE impedED as long AS it 
is on The lisT of EquIpmeNT wE pRovIdE TheM.  thAt sAId, tHere are cOuNtLess 
oPporTUNITies For EquiPment To be delayed in isrAel aWAitIng clEaranCe, 
whEtHer on The lisT or noT.  FIrst power could bE delAyed indefIniTeLy iF tHe 
IsrAElis chOosE to Do so for PoliticAL, seCuRITY, oR other reasons.

2.  Fuel fOr THE pLant, once OperatIOnAl, WIll also tRaNsiT IsrAEL.  AgaiN, 
disRUpTion of thE fuel sUPpLy For any lEnGth of tImE wiLl iN effeCT pulL the 
plUg on poweR in GaZA.  Gas from Egypt hAS been discusseD; It REMaINs to Be 
sEen if that wiLl be A RealIty aNYtIme SOon.

3.  AlThougH nOT oFFicially from the IsraElI goverNment, We have been tolD 
that as sooN AS The first Watt OF pOWer from the planT is prOduced, the 
ISRaelis wiLl turN off suppLy of electRICity to GaZa.  THe cUrrEnt 
CONsUmption is abouT 110mw.  The FiRst phasE of The planT wiLl pRodUce 40mW.  
this appeaRs to be thE bEgInNiNg oF a powER supply aRrAngEmEnt WhereBY IsraeL 
sellS GazA eLeCTriCity to mAKe UP The dIfFeRencE.  ThAt ElectRiciTY is Likely 
tO be more exPenSIve tHaN tHat whicH the plant will SuPply; Enron cOuLd wEll 
end UP Being blaMed for the higher cost.

4.  WateR Is anothEr cRiticAl isSue.  The PalEstInians WanT Their oWn suppLy 
of fReSh wATEr whiCH MuSt nEcEssarily be DESalInateD.  ISraeL is currEntly 
selling water tO gazA; it is not in IsrAel'S besT INtEreST tO LosE tHIs 
cUSTomer, therefore sHe may attemPt TO dElay a desalINatIoN projecT.

5.  OPIC prOject FUnding iS problemaTical.
, then we 
will have a pri ce re-open er.
8 . IfOr met' s lo ads change sig n ific antly (i.e. new cogen)  we w il l  hav e  a  
pri ce re-o p en e r . T he  I PPin Ga za is  pr ogressi ng albeitsom ew hat behind s c he dule.  Thi s combined cyc lepowerpl ant is th e f irstinfras t ructur e develop me n t proj e ct in G a za  and  the first by a m a jo r  Western compa ny any wh e re i n " Pal estine." Th ere a re seve r al i s sue s  which should  be address e d a nd may  b e r a ised d uring  t h e Secretary's  vis it.

1. All eq u ipmentf or theplantmus t t rans i tIs rae l.  We ha veb een  assured  b y
theIsra e l i s  tha t m ovem ent o f the equipme ntwill not  be i mpede d as  l ong a s it is on  t he list of equi pmen t we prov ide  t hem . That said,the reare cou ntlessopp or t u n it ies for equipmentto b edelayedin Isr a el  a w aiting c le ara nce, wheth er o n  t he listor not .  Fi rst pow er  could  b e d ela yed i n defi nitely  if the
Isra e lis choose tod o so for poli t ic a l ,s ecur ity , or otherreas o ns.
2.Fu elf or th e pla nt ,  o n ce operational, wil lalso t ransi t Israel.  Ag ain, 
disr u p t ion of t he f u el supply for any  leng th of time will ineffec t pull t he 
plugo n  power i n G aza . Gas f ro m Egypt has b e e n di sc ussed;itremains  to  be  
s een  i f that wi ll be are al it yany times oon.

3.  Alt ho ugh  noto fficia lly f romth eI sra eli gov e rn m e nt,we  h avebee ntold
tha t  as  soon a s the fir stw attof  p ower fr om the plantis  produced,  t he
Israe l i s will t urn off supply of elect r icity t o G aza. The  current
co nsumpt ion is abo ut 110 MW. Th e f i r st ph a s eofth e plant wi l l  pr oduce  4 0MW.   
This  appears to be the beg inning of a p owe r su p p ly  ar r an g eme nt whe r e by Israel 
sell s Gaza ele ct r ic ity to mak e  up  t he diff erence.   Tha t  electr icity islikely 
t obe m o r e e xpensive t han that  which th e  plan t  w ill s upp ly; En ro n c ouldwell e ndup be ing bl am ed for  thehi gher cos t.

4.  Water is anothe r crit icaliss ue.  ThePal e sti nians wan t th eir own su ppl y of fr esh water  whi c hmus t  nece ssar i ly be des a li nat e d . Israel isc u r ren tly sel l ing wa terto Gaza; it is no t  in Israel's b esti n ter est to l os e this 
custom er,  t h e refore s he  may attemp t to del ay a des alinat ion pr oject.5 .OPIC p roje ctfunding i s p ro b lematic al .
, then_we 
will_have a price re-opener.
8._ If_Ormet's_loads change_significantly_(i.e. new cogen)_we will have_a 
price re-opener. The_IPP in Gaza_is_progressing albeit somewhat behind schedule.  This 
combined cycle power plant is the first_infrastructure_development project_in_
Gaza_and the first by a_major Western company anywhere in_"Palestine." _There 
are several issues which should be addressed_and_may be raised_during the 
Secretary's visit.

1.  All equipment for the_plant must transit Israel.  We_have been assured_by_
the_Israelis that movement of_the equipment will not be impeded_as long as it 
is on_the list of equipment we provide them._ That said, there are countless_
opportunities for equipment to be_delayed in_Israel awaiting clearance, 
whether on_the list or_not. _First power could_be delayed indefinitely if the 
Israelis_choose to do_so for political, security, or other_reasons.

2._ Fuel for_the_plant,_once operational,_will also transit_Israel._ Again,_
disruption_of the fuel supply for any_length_of time will in effect pull the_
plug on power in_Gaza._ Gas from Egypt_has been discussed; it remains_to be 
seen if that will_be a_reality anytime_soon.

3.  Although not officially from the Israeli government, we have_been told 
that as soon as_the first watt of_power from_the_plant is produced,_the_
Israelis will_turn off supply of electricity to Gaza._ The_current 
consumption is about 110MW. _The first phase of_the_plant will produce 40MW.  
This_appears to be the beginning of_a power supply arrangement whereby_Israel_
sells_Gaza electricity to make up_the difference.  That electricity is_likely 
to be_more expensive than that which the plant_will_supply; Enron could well 
end up_being_blamed for the higher cost.

4. _Water_is_another critical issue.  The_Palestinians want their own supply 
of_fresh water which must necessarily be desalinated.  Israel_is currently 
selling_water to Gaza; it is_not_in_Israel's best interest to lose this 
customer, therefore she may_attempt to_delay a desalination_project.

5.  OPIC project funding is problematical.