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----- Forwarded by DG Skandan/IND/VERITAS on 24-04-2017 10:08 -----

From: Ihab Awadallah/ARE/VERITAS

To: DG Skandan/IND/VERITAS@Veritas
Cc: P Sridhar/IND/VERITAS@VERITAS, Amit Ghosh/IND/VERITAS@VERITAS, Sofien Masmoudi/ARE/VERITAS
Date: 24-04-2017 09:27
Subject: Re: Concerns on Coated pipes supplied by Man Industries for Dabeyah Project,

Dear Skandan

Thanks for your brief report, however what you have stated below is not covering the investigation scope agreed in our conference meeting or addressing the
defects identified by ADCO

We have agreed that you will perform your investigation based on the defects, stated in ADCO Report, in order to find why these concerns were not identified by
our Inspector.

All defects identified, are linked to Production stage, which we are supposed to be Monitoring, summarized as follow
At the same time, please find below an extract from your inspector report, showing that all coating activities were satisfactory, from Report 05 to 019

IR-05
IR-19

Again we want to remind you that this is a very critical issue, risking our Prequalification for two contarcts with ADCO, related to 3 years frame agreements, with
the biggest all producer in UAE

Apreciate your immediate focused and subjected investigation

Best Regards
 IHAB AWADALLAH
Industry Manager

Bureau Veritas - Commodities, Industry & Facilities (CIF)

P.O. Box: 26264 | Abu Dhabi | United Arab Emirates

Tel: + 971 (2) 64 44 920 | Mobile: +971 (50) 66 86 109 | Fax: + 971 (2) 64 44 921
Email: ihab.awadallah@ae.bureauveritas.com | Web: http://www.bureauveritas.com

From: DG Skandan/IND/VERITAS
To: Ihab Awadallah/ARE/VERITAS@VERITAS
Cc: P Sridhar/IND/VERITAS@VERITAS, Amit Ghosh/IND/VERITAS@VERITAS, Sofien Masmoudi/ARE/VERITAS@VERITAS
Date: 21/04/2017 02:35 PM
Subject: Concerns on Coated pipes supplied by Man Industries for Dabeyah Project,

Dear Ihab,

We remain concerned over the issues on the failure of pipe coating and rejection inspected at MAN Industries; for supplies to ADCO, Abu Dhabi.
We have reviewed the issues brought out by you in the conference call on Mon 17-04-2017.

History:

BV CO Client ADCO - Abu Dhabi.

Project
BV Contracting Office
Performing Office
Inspection performed
by
BV India File
Reference
Inspection duration
ADCO PO Reference
844- EC for AL-Dabbiya surface facilities Phase III
Abu Dhabi
BV India - Gandhidham Office
Vijay Sultanekar, Pulin Dave, Nitin Kumar Modi
IND.M.4.14.1213
25.02.2016 to 30.07.2016
7500051643

A) Total 11 concern was raised by ADCO and Technimont on Aug 8 2016 , through MOM-0364. All concern had been addressed and
answered up to the satisfaction level of ADCO and Technimont. No issue relating to pipe coating was issued at this point of time.
B) On November 21, 2016 we had received the concern regarding the coated pipe failure without the extent and nature of failure. With this
ADCO withdraw the approval for two of BVIL inspectors.

C) On April 12, 2017 only BVIL received the information about the extent and nature of failure.

We had further reviewed the entire inspection assignment and try to address the root cause of this issue and we could come to conclusion as below:

1. BVIL inspector done the job diligently and report finding accordingly about the failure of Pipe Coating PQT. See the Inspection Report 005
Dated 21.04.2016.

2. PQT is simulation of the production parameters and once the PQT failed what corrective action and analysis done by MAN Industries to fix the
production parameters was not communicated to BVIL as between the visit production was continued.

3. BVIL inspector never had opportunity to witness complete set of test for a selected sample also had no opportunity to know the test result of
previously completed PQT.

4. Approximately 39 man day visits over the large span of production activity i.e. 25.02.2016 to 30.07.2016 attended by BVIL. Occasion of BVIL
visits controlled by ADCO, Abu Dhabi through Inspection Notification ; moreover specific task as per QAP required to be covered on the particular
visit like 100% witness of mechanical testing, 20% witness of other activities etc. (detail log of each visit attached herewith) there was no opportunity
for inspector to interrogate with other parties about the keep updating, review the documents and or quality issues between two successive BVIL
visits; as production was on online and spending the time for other activities may not justification to the notification activities.

MAN Industries _ Information requested - Final 2.xls-xls.zip

5. Contracting office (BV Abu Dhabi) not visualized the Client expectation, volume of work and scope assigned to performing office. Also not
communicated with BVIL about the ADCO views on pipe coating PQT failure which was reported by BVIL. No communication share with BVIL about
the findings reported to ADCO, Abu Dhabi.

6. Such large extent of failure may result from the process design and or the material used for the coating. Both the factor was out of BVIL scope
and control.

May we conclude that BVIL surveyor has been diligent in his inspection as evidenced in the reports. However, to mitigate such recurrence of
issues in future, we have alerted all our inspectors to issue the NCR (Non Confirmatory Report) for such issues.

Such issues could have been avoided if ; a increased scope of inspection with BVIL for start to end of testing cycle for 3 LPP inspection of pipes ;
due care about issues highlighted in report and brought directly to ADCO, Abu Dhabi for concurrence.
We remain open to provide you any further technical clarifications you may require and thank you for your kind understanding.

Thanks & Regards

D.Gnanaskandan
Manager - WWSI

Dir Phone No: +91 22 67077365, Mobile No. +91 9987024555

Bureau Veritas ( India) Private Ltd.,

Marwah Centre, 6th Floor, Opp Ansa Industrial Estate,
Off Saki Vihar Raod,Saki Naka, Andheri(E),Mumbai -
400072.

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