Privileged and confidential

Dear John:

Thank you for your prompt response regarding the matter.
I have received you mail asking me to call you and I have reached Mr. Randy 
Pais.

According to the discussed with him, please be informed that Mr. Arap 
Sobrinho  as delegate manager in EPCB articles of association is able to sign 
both the company representative letter, as well as the power of attorney to 
Tozzini Freire.

It is important to clarify that Ms. Cunha shall be representing EPCB in 
court, since the labor action has been filed against both EPCB and EPE and 
not SCC.

Unfortunately, these documents have to be filed before court in their 
originals. Mr. Pais has requested me to fax me a copy of the signed power of 
attorney as soon as I have it.

As regards the correspondence regarding this matter, I am already copying all 
of the people mentioned by you.

Should you need any further assistance in connection with the matter, please 
advise.

Best regards,
Ana Paula Gon?alves

>>> <John.Schwartzenburg@enron.com> 15/05/01 20:32 >>>


Ana Paula, thanks for keeping after me on this.

We have decided to rely on Ms. Cunha as the company representative to be
present in court. This will avoid the need for an official, court appointed
tramslator. She will be supported by Randy Pais, Nate Neuman or others as
needed either from Houston or traveling to Brazil as needed. The SCC expat
presence in Brazil will be greatly diminished in the next several weeks.

Please copy Ms. Cunha  Mr. Randy Pais and Mr. Richard Sanders on all
correspondence related to this matter. Randy Pais is the internal
transactional lawyer at EEOS/SCC working the Cuiaba project; Richard
Sanders is the internal litigation management lawyer at Enron Wholesale who
supports our business unit.

I want to make sure I understand what is meant by the power of attorney and
company representative letter. Are these the documents that appoint Ms.
Cunha as the SCC company representative for the purposes of this matter?
Sami,  if this is right I would have no objections for you signing these
documents, but you don't have any position with SCC. Weren't these to be
give n to Nate Neuman for him to have executed at the SCC office in Cuiaba?

Ana Paula, is it possible to e-mail or fax the documents to us here, and
for us to signand fax back, or does the court need originals?

JWVS



                    "APG - Ana
                    Paula                To:     
<john.schwartzenburg@enron.com>, <randy.pais@enron.com>
                    Gon?alves"           cc:     "PCS - Paula Corina Santone" 
<paula@tozzini.com.br>, "RQB -
                    <APG@tozzini.        Renata Siciliano Quartim Barbosa" 
<RQB@tozzini.com.br>
                    com.br>              Subject:     Enc.: Labor action 
filed by Luiz Alexandre Zago against
                                         EPCB    and EPE
                    05/15/2001
                    06:09 PM






Privileged and confidential

Dear John:

Reference is made to our mail dated as of May 11th, 2001, in order to
inform you that, according to understandings held with Ms. Daniele Cunha,
the power of attorney and the company representative letter related to the
labor action filed by Luiz Alexandre Zago has already been forwarded to Mr.
Sami Arap Sobrinho.

Taking into account the fact that Mr. Arap Sobrinho shall only sign the
above mentioned documents with your express consent, we kindly request you
to contact him regarding the issue, the sooner the possible. In fact, we
will appreciate if you could contact him tomorrow, so that the documents
may be filed at the labor court within the established deadline.

Since Ms. Daniele Cunha shall be functioning as the company representative
at this case, I would like to know if she may be copied of all of the
exchanged mail regarding the matter.

At last, we await your guidance as to whom shall the legal fees billing
related to this case be addressed to.

Best regards,
APG
Date: Fri, 11 May 2001 16:48:32 -0300
From: "=?ISO-8859-1?Q?APG=20-=20Ana=20Paula=20Gon=E7alves?="
<APG@tozzini.com.br>
To: <john.schwartzenburg@enron.com>, <randy.pais@enron.com>
Cc: "PCS - Paula Corina Santone" <paula@tozzini.com.br>,     "RQB - Renata
Siciliano Quartim Barbosa" <RQB@tozzini.com.br>
Subject: Labor action filed by Luiz Alexandre Zago against EPCB and EPE
Mime-Version: 1.0
Content-Type: multipart/mixed; boundary="=_DF85E83D.2C4D33DD"

Privileged and confidential

Dear John:

The purpose of this mail is to provide you with the term of the hearing at
court, copy attached hereto, which took place on May 07th, 2001, at the
labor action filed by Luis Alexandre Zago, occasion in which the written
defense has been presented by EPCB, copy also attached hereto.

According to such a hearing term, it has been designated a discovery
hearing at court for May 30th, 2001, at 3 p.m., occasion in which a company
representative of EPCB, with his employee booklet (CTPS), shall attend the
hearing, as well as up to three witnesses  that may be able to testify
favorably to EPCB.

In this sense, below please find the subject over which evidence shall be
produced by EPCB at such a discovery hearing:

i) that EPE hired the Superior Construction Company in order to build the
thermo electric plant;

ii) that the Superior Construction Company has entered into a re-hiring
agreement with the Siemens Ltda. company in order to build the thermo
electric plant, company which, in its turn, has hired the ENESA company for
such a purpose;

iii) that the Superior Construction Company has used EPCB in order to
diligence in the sense that the thermo electric plant building was been
performed in accordance with the hired by and between the EPE and Superior
Company Construction companies;

iv) that the claimant was an employee of the ENESA company; that ENESA
company paid the employee's salaries; that EPE and EPCB have never
contacted the claimant; that the ENESA company was the responsible for the
selection of the professionals that it understood as necessary for the
services compliance; that it was up to ENESA company to give commands to
the claimant; that it was ENESA company that determined  the services to be
performed by the claimant.

We would also like to inform that it has been determined by the court the
deadline of 15 days for EPCB to present at the case files (i) its articles
of associations; (ii) power of attorney and (iii) company representative
letter. For such, we kindly request that such documents, duly certified, be
forwarded directly to our local correspondent attorney in Cuiab? - Ms.
Luciana Cristina Pereira Cardoso, at the address, Av. Historiador Rubens de
Mendon?a, 1836, sala 905, bairro Bosque da Sa?de, Cuiab?, MT, up till May
18th, 2001, so that we may present them at the case files in the stipulated
deadline.

Also, we would like to stress that in case EPCB decides to indicate a
company representative that has not the Portuguese as his mother language
to attend the hearing at court, it will be necessary to request court the
indication of a public sworn translator. Therefore, we kindly request you
to inform us, up till May 21st, 2001, if such will be needed so that we may
take the necessary measures in this regard in time.

We do clarify, however, that we find it unnecessary the attendance of a
foreign company representative in the extent that Ms. Daniele Cunha, who
attended the first hearing at court, has shown enough and necessary
knowledge in order to function as company representative at the present
case.

At last, please advise as to whom shall the legal fees billing related to
this case be addressed to.

Please contact us should you need any further clarification on the above.

Best regards,
Ana Paula Gon?alves.

P.S. Please advise should you need a free translation of both the term of
the hearing, as well as of the written defense presented by EPCB in the
case.


(See attached file: EPE.DOC)
(See attached file: ZAGO.DOC)