On May 8, 2001, in greater San Juan, Puerto Rico, a San Juan Metro bus 
dropped into a hole that had been excavated by a work crew from San Juan Gas 
Company. The hole had been excavated by a San Juan Gas crew (or contract 
labor) under the supervision of a San Juan Gas operations supervisor as part 
of the project in which new plastic gas pipe and fiber optic conduit were 
being inserted into a portion of the existing San Juan Gas distribution 
system.

At the request of Risk Management, the Litigation Unit engaged local counsel 
and a local investigator for the purpose of obtaining the details of the 
incident. Initial reports indicate that at approximately 5:00 pm on May 8, 
the rear wheels of a Metro bus dropped into the excavation described above. 
The bus was traveling in a contra-flow bus lane and apparently struck and 
damaged three private vehicles as a result of the incident.

The incident also caused personal injury to the bus driver, some passengers 
and others. The bus driver and two passengers were taken to the hospital, but 
do not appear to be seriously injured. The driver complained of being 
overcome by the fumes of the diesel fuel that was spilled from the fuel tank 
of the bus. An elderly male passenger was thrown form his seat and may have 
injured his ribs. A 9 year old girl received a contusion to her forehead. 
Additionally, approximately 20 other individuals claimed to have been 
passengers on the bus and complained to the police of injuries. None required 
immediate hospital treatment.

The facts obtained to date, indicate that the hole was excavated by the San 
Juan Gas crew (as part of the insertion program mentioned above) in the bus 
lane as allowed by permit on April 30, 2001. The hole was not filled on that 
date, but was left with a large, heavy steel plate over it so that further 
work could be done. Between April 30 and May 8, the hole remained unfilled 
with the steel plate covering it and some further work may have been 
undertaken. The hole was filled in shortly after the incident.

In light of the facts that have been obtained, it is the view of Risk 
Management that the incident is a covered event and is, therefore, an insured 
matter. They wish to proceed immediately to address the personal injury and 
property claims in an effort to obtain an efficient resolution of such claims 
before suits are brought and the cost of litigation is incurred. Based on the 
facts of this incident and our litigation experience in San Juan, the 
Litigation Unit concurs with the desire of Risk Management to seek an 
expedited resolution of the claims that will arise out of this incident.

Risk Management has made arrangements with a local claims adjuster, in 
conjunction with our local counsel, to undertake the task of resolving the 
claims. Since the goal is to resolve the claims before litigation, Risk 
Management is prepared to initiate the process on Monday, May 21, and will do 
so, unless an objection is received. If you have an objection or wish to have 
further information, simply respond to this email.

Thank you for your attention to this matter.