CLARIFICATION ON EGCOMP'S ON REUTERS

No. EGCO 410/ Date : December 21, 2001 Attention: President of the Stock Exchange of Thailand Subject: Clarification on EGCOMP will inject 4 billion Baht in power business next year Reference is made to the news on Reuters dated December 20, 2001 stated that next year Electricity Generation Public Company Limited (EGCOMP) expected to invest approximately 4 billion Baht for expanding its capacity. EGCOMP would like to clarify the news that next year, EGCOMP expects to inject approximately 1.4 billion Baht for its existing projects. In addition, EGCOMP would like to confirm the news regarding the major maintenance of Rayong Power Plant (REGCO), which will be shut down for a period of 60 days next year. This major maintenance is scheduled as planned, and the electricity revenue will be as determined under the PPA. Moreover, the Board of Directors Meeting No. 7/2001 held on December 17, 2001 passed the following resolutions. 1. EGCOMP revised its corporate objective from increasing market share to 5,000 MW Equity Capacity by 2003 to by 2005. Major factors to postpone EGCOMP's investment are as follows: - Demand for electricity and installed capacity required by the country have not been in line with the company's forecast due to a main factor, i.e. economic forecast, which has not been as estimated. - Currently, minimum reserved margin is still high, and it has been revised to 15% for the recommended plan and 20% for the alternative plan. Therefore, the demand for installed capacity is lower in order to reduce pressure to pass through the cost of maintaining the reserved margin and increasing the investment to consumers in form of electricity tariff. - The establishment of power pool and the privatization of power industry, including the sale of EGAT's spin-off assets and EGAT's Repowering Project, are delayed. - The implementation of Third-Party Access is uncertain. 2. EGCOMP has the policy to pay its dividend twice a year at approximately 40% of net profit. Furthermore, in 2002 annual plan, EGCOMP will maintain its cash flow sufficient to pay the dividend from its 2002 operating results in the amount of 2 Baht per share. Yours sincerely, Machima Kunjara Na Ayudhya Senior Executive Vice President Acting for President