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-----Original Message-----
From: Martin, Jerry D. <jerry.d.martin@enron.com>
To: Horton, Stanley <Stanley.Horton@ENRON.com>; Lowry, Phil <Phil.Lowry@ENRON.com>; Hayslett, Rod <Rod.Hayslett@ENRON.com>; McCarty, Danny <Danny.McCarty@ENRON.com>; Harris, Steven <Steven.Harris@ENRON.com>; Howard, Kevin A. <Kevin_Howard@ENRON.net>; Brassfield, Morris <Morris.Brassfield@ENRON.com>; Pribble, Dan <Dan.Pribble@ENRON.com>; Saunders, James <James.Saunders@ENRON.com>
CC: Eisenstein, Arnold L. <Arnold.L.Eisenstein@ENRON.com>
Sent: Fri Jan 11 14:24:50 2002
Subject: TW Red Rock Schedule

This week we conducted another detailed Red Rock schedule and risk review.  Due to several continuing and cumulative negative factors, we are re-forecasting the project schedule.  The forecasted dates are now:

*	Station 1	15 June 2002 (was 1 June)
*	Station 2	15 June 2002 (was 1 June)
*	Station 3	1 July 2002 (was 22 June)

Factors which previously impacted the schedule include late air permits and the inability to start construction due to the contractors' unwillingness to work on credit.  Please recall that we were originally scheduled to start construction in mid-October, but were delayed about six weeks due to the air permits.  Permits were received and construction scheduled to start in early December, when the bankruptcy / advanced payment issues caused the contractors to delay the start.

Factors which continue to impact the project are

*	Lack of materials causing lack of construction progress.  Several vendors and contractors continue to delay until they receive payment; due to a lack of cash, some payment needs identified in December are just now being paid.  The table below indicates the lag in payments.
*	Nuovo Pignone unit testing delay (only affects unit 3).
*	Winter weather - not out of the ordinary, but we are impacted by trying to do civil work during winter weather.  Our original plan was to be complete with civil work before winter.

The dates above are based on resolution of the material delivery items immediately.  Further delay in vendor payments / material deliveries could impact the dates further.

We have considered many alternatives to minimize construction schedule, and are doing those that are feasible at this time.  They include

*	maximum piping pre-fabrication
*	early tie-in at Station 2
*	geotech experts on site to immediately approve variations in construction specifications
*	installation of tents to enable civil construction

We will continue to evaluate schedule-enhancing activities and may be able to take additional steps at the appropriate phases of construction (e.g., working 2 shifts when the work can be done safely at night, and having Nuovo Pignone representatives on site early).

Jerry




EXAMPLES OF MATERIAL DELAYS DUE TO CASH FLOW RESTRICTIONS:

VENDOR		ITEM				ISSUE IDENTIFIED		CHECK CUT		CHECK RECEIVED

Taylor Forge	Fab. headers - 1		3 December				18 December		26 December
Taylor Forge	Fab. headers - 2		3 December				4 January			7 January
Redman		Pipe fittings			3 December
SISCO			Specialty fittings	3 December
GEA Rainey	Gas Coolers		11 December			7 January
Gulfex			Prefab. pipe			12 December			4 January			11 January