26 February 200926 February 2009

SUB-GROUP NO. 3 SUB-GROUP NO. 3 HAPUA SPARES MANAGEMENTHAPUA SPARES MANAGEMENT

Proposal for Bilateral ArrangementProposal for Bilateral Arrangement

SUB-GROUP NO. 3 SUB-GROUP NO. 3 HAPUA SPARES MANAGEMENTHAPUA SPARES MANAGEMENT

Proposal for Bilateral ArrangementProposal for Bilateral Arrangement

HAPUA HAPUA Project Group No. 3 – Service GroupProject Group No. 3 – Service Group

HAPUA HAPUA Project Group No. 3 – Service GroupProject Group No. 3 – Service Group

Team Member:Aznoran Mohd NoorRohaizad Samudin

Team Member:Aznoran Mohd NoorRohaizad Samudin

CONTENTSCONTENTS

HAPUA Generation Projects - Spare Management Sub- Working Committee

Objectives of Spares Management Project

Scope of Works

Updates on HAPUA Spare Management Sub-Working Group’s activities

Decision Made During 9th. HWG1 Mtg.

Malaysia’s Proposal

MALAYSIA

Mr. Ahmad Rashdi Jaafar

Project Group 3 - Service Group

3

THAILAND

Mr. Pithsanu Thongveerakul

Project Group 2 - Plant Performance

Benchmarking & Database2

INDONESIA

Mr. Bambang Susianto

Project Group 1 - Generation O&M

1

COUNTRYLEADERPROJECT GROUPNO

THE 3 HAPUA GENERATION PROJECTSTHE 3 HAPUA GENERATION PROJECTS

1. Sharing of repair facilities and service provider

2. Power Plant Engineering and Design

3. Spares management

1. Sharing of repair facilities and service provider

2. Power Plant Engineering and Design

3. Spares management

SUB-WORKING GROUPS UNDER PROJECT GROUP NO3

SUB-WORKING GROUPS UNDER PROJECT GROUP NO3

3. Spares Management

Objectives of Spares Management Project

To reduce plant outages due to unavailability of spares by sharing

To reduce inventory level among member countries having similar plants e.g. sharing of large and expensive items such as transformers or rotors

To reduce the price of spares by having a better negotiating position with OEMs

To reduce the price of spares by having options whether to buy from OEMs or from alternative sources or to fabricate the parts through reverse engineering in recognised workshops

Scope of Works Scope of Works - Spares Management Sub-Working - Spares Management Sub-Working GroupGroup To identify common strategic spares that can be

shared among ASEAN Countries.

To come up with the mechanism of sharing of spares.

To set up spares pooling community and networking among members.

To share the knowledge and experience in the use of alternative parts.

To share information on the suppliers and manufacturers of alternative parts.

To share the knowledge and information in materials management initiatives.

Spares Management Sub-Working Spares Management Sub-Working Group Group - 1- 1stst. Coordination Meeting . Coordination Meeting

• Date : 21-23 Aug 2006• Host :EGAT, Thailand• Venue : Montien Hotel,

Pattaya

• Attendance:

• Thailand (EGAT) – 9 persons

• Vietnam (EVN) – 5 persons• Malaysia (TNB) – 3

persons• Philippines (NPC) – 2

persons

The The DelegatesDelegates

TNB’s representatives

Activities During Coordination MeetingActivities During Coordination Meeting

- Sharing of information and experience on:

• Gas Turbine Technology - initially focusing on Frame 9Es and MS 701F

• Model, location and year commissioned of each GT.

• History of operation and conditions

• Experience in the use of alternative parts and Spares pooling

• Materials Management Strategies and initiatives – optimizing stock value & cost savings initiatives

Meeting Outcomes/StatusMeeting Outcomes/Status

Action Plans/Resolutions:

• EGAT to come up with a standard format and compile all data on GT for all GT models-DONE.

• EGAT and TNB to submit the list of all gas turbine models-DONE.

• To proceed with the setting up of Data Warehouse & Information Network-IN PROGRESS

• The sub-working committee to identify Frame 9E strategic spares that can be shared among ASEAN Countries-DONE.

• To firm up with the mechanism of sharing the spares-IN PROGRESS

Proposed Information NetworkProposed Information Network

EVN

TNB

South Bangkok (SB)

MS 9171EUnit # 11,12

Wang Noi (WN)M701F1,3

Unit # 11,12,21,22,31.32

Unit # 11,12

Bangpakong (BPK)

MS 9161EUnit#

31,32,41,42

NetWork Center

Information Network for Frame 9E Information Network for Frame 9E GTGT

TNB14 Unit

SBMS 9171E

Unit11,12

BPKMS 9161E

Unit 31,32,41,42

NetworkCenter

MS 9001E

Proposed Information Network for Proposed Information Network for M701FM701F

TNB PD12 Unit

M 701 F

EVNPhu My

M 701 3 Unit

SBM 701 F3

Unit31,32

(In near future)

WNM 701F1

Unit 11,12,21,22

M 701F3Unit 31,32

EGATNetworkCenterM 701F

The way forwardThe way forward

• To schedule the 2nd. sub-working committee meeting.

• To follow up on the action plans / resolutions from the 1st. Meeting.

• To discuss and resolve issues / blockers (if any) that may hinder success.

Decision Made During 9th. Meeting of HWG1

Date : 12th November 2008 Venue : EGAT, Nonthaburi Attendees : From 3 countries only i.e.

Indonesia Power (Mr. Darwis M. Daud) EGAT (Mr. Pithsanu Thongveerakul) TNB (Mr. Mohd Nazri Shahruddin)

Decision made : to continue with spares management / spares pooling project

MALAYSIA’S PROPOSAL

Spares Management Group Mtg. Spares Management Group Mtg. No. 1 (15No. 1 (15thth June 2007 in CBPS) June 2007 in CBPS)

Resolutions To share / pool strategic spares for Model Frame

9E strategic spares between TNB & EGAT 14 units of GE Frame 9E in TNB 18 units of GE Frame 9E in EGAT

To share / pool spares for Model Alstom GT 13E1strategic spares between TNB & Indonesia Power

4 Open Cycle units in CBPS, 6 Combined Cycle units in Tanjong Priok,

Indonesia Possibility of trading of spares/parts between

HAPUA members

Spares Management Group Mtg. Spares Management Group Mtg. No. 2No. 2

Internal meeting No. 2 on 10th July 2007 in TNB REMACO PJ Office

Agenda Detail discussion on each methodology Finalizing milestone To come up with details of MOU To identify liaison person from EGAT and

Indonesia Power Next course of action

Meeting No. 3 – 18th Sept 2007 Agenda - discuss on Process Flow & MOU

Spares Management Group Mtg. Spares Management Group Mtg. No. 3No. 3

3rd meeting held on 18th Sept 2007 Finalized concepts on Spares Management Reviewed and verified DRAFT MOU from Legal

Services Department Reviewed proposed action plan

Rationale for Bilateral Rationale for Bilateral ArrangementsArrangements

TNB and EGAT Adequate units of Frame 9Es to justify sharing and

pooling Pilot project before the model is extended to other

HAPUA members Very active in HAPUA spares management initiatives Opportunity to reduce stock holding cost

TNB- CBPS and Tanjung Priok - Indonesia Power Users of Alstom 13E1 in South East Asia Opportunity to reduce stock holding cost

Proposed Pilot project - Bilateral arrangements between two utilities are easier to manage

Proposed MechanismProposed Mechanism

Principles Based on mutual benefits / win-win strategy Specific agreement for every transaction Covers strategic spares which

Not available off shelf / at site Emergency/urgent need Require long lead time to deliver High capital items

Methodology Loan/purchase of existing new (unused)

spares between utilities Sharing / pooling of new (unused) spares

Proposed Concept – Proposed Concept – LoanLoan/Purchase/Purchase of Spares of Spares

Loan/purchase of new (unused) existing spares between utilities

New (unused) spares are available at either party

The loan/purchase must be based on mutual agreement without jeopardizing the operation of either utility

The replacement parts must be purchased and returned within an agreed period

All cost e.g. insurance, risk, logistics incurred shall be borne by the requestor

Proposed Concept –Purchase of Proposed Concept –Purchase of SparesSpares

Purchase of spares Identify spares (new or refurbished) that can

be sold / to be purchased Willing seller – willing buyer concept Mutually agreed Terms and conditions

Price Payment terms Delivery Insurance & Logistics Warranty issue

PROCESS FLOW CHART FOR LOAN OF SPARES PROCESS FLOW CHART FOR LOAN OF SPARES BETWEEN TNB & EGAT / INDONESIA POWERBETWEEN TNB & EGAT / INDONESIA POWER

REQUESTOR/REQUESTOR/BORROWERBORROWER

1.0 Preliminary inquiry on

parts availability

2.0Check / confirm

availability

LENDERLENDER

Closed

3.0 Availability of parts and possibility

of borrowing?

No

4.0Forward official

request & arrange logistic +

insurance

5.0Assist and arrange for

parts delivery

Yes

8.0Arrange for replacement

parts delivery

7.0Purchase of replacement

parts

6.0Delivery

acceptance

9.0Delivery

acceptance of

replacement parts

Closed

PROCESS FLOW CHART FOR PURCHASE OF SPARES PROCESS FLOW CHART FOR PURCHASE OF SPARES BETWEEN TNB & EGAT / INDONESIA POWERBETWEEN TNB & EGAT / INDONESIA POWER

BUYERBUYER

1.0 Preliminary inquiry on

parts availability

2.0Check / confirm

availability

SELLERSELLER

Closed

3.0 Availability of parts and

price confirmation

No

4.0Forward official

request to purchase

5.0 Aarrange for

parts delivery & insurance

Yes

7.0Arrange for

payment

6.0Delivery

acceptance

8.0Acceptance of payment

Closed

Proposed Concept – Pooling of Proposed Concept – Pooling of SparesSpares

Pooling / Sharing of new (unused) spares Identify and agree on expensive strategic

spares that can be pooled to ensure reliability of plants

Establish a shareable database Sharing / pooling issues to be detailed out

Cost sharing Minimum stock level Storage location & preservation Logistics management Insurance and risk management Inventory replacement

PROCESS FLOW CHART FOR POOLING / SHARING OF SPARES PROCESS FLOW CHART FOR POOLING / SHARING OF SPARES BETWEEN TNB & EGAT / INDONESIA POWERBETWEEN TNB & EGAT / INDONESIA POWER

BORROWER / BORROWER / REQUESTOR/REQUESTOR/

1.0 Preliminary inquiry on

parts availability

2.0Check / confirm

availability

LENDERLENDER

Closed

3.0 Availability of parts and possibility

of borrowing?

No

4.0Forward official

request & arrange logistic +

insurance

5.0Assist and arrange for

parts delivery

Yes

8.0Arrange for replacement

parts delivery

7.0Purchase of replacement

parts

6.0Delivery

acceptance

9.0Delivery

acceptance of

replacement parts

Closed

Assumptions:

• Spares to be pooled have been purchased on cost sharing basis.

• Utility which is responsible to keep the pooled spares have been identified and agreed.

• Lender = utility which keeps the pooled spares, Borrower = utility which requires to use the pooled spares.

Issues In Implementation

Sharing and understanding the objectives, benefits and concern of this project by utilities in Thailand, Indonesia and Malaysia

Commitment from all parties Legal issues Inventory database Further deliberation required to cover all other

possible scenarios for implementation

Action Plan & Project MilestoneAction Plan & Project Milestone

No Description Target Date Responsible Person

1.0 To draft proposal on concept and process flowchart 31 Aug 2007 (Completed)

-

2.0 To draft MOU and verified by Legal Services Department

31 Aug 2007(Completed)

-

3.0 To seek approval from VP Generation on concept and MOU

Mar 2009 Aznoran

3.0 To establish database May 2009 AznoranRohaizad

4.0 To discuss and get buy in on spares management concepts with

EGATIndonesia Power

Jun 2009 Team members

5.0 To sign MOU (draft copy of MOU has been distributed to attendees of HAPUA 8th. HWG1 Mtg, in Jan. 2008)

Aug 2009 AznoranRohaizad

6.0 To confirm strategic spares to be shared/pooled Sept 2009 Team members

THANK YOUTHANK YOU

“Keeping the Lights On”