Property Survey Report

For
Bamburi Cement Ltd

Company

Malindi Rd, Mombasa

KENYA
Address

24th March 2005

Survey Date

Andrew Coxon
AIG Engineer

Insurance Broker

Paul Rogers, Plant Manager

Peter K Gibendi, Production Superintendent

Nelson Mahebo, Property Underwriter – AIG Kenya

Contacted

Distribution Position / Company

Nelson Mahebo AIG Kenya, Nairobi

"Our survey of our customer's operations is for underwriting/business partners' purposes and to assist our customers in
their loss control activities. However, no responsibility is assumed for the discovery and elimination of hazards, which
could possibly cause accidents or damage, nor do we certify to the adequacy of any water supply system or the proper
functioning or adequacy of any fire protection system at any facility that is inspected. Compliance with any submitted
recommendations in no way guarantees the fulfilment of obligations as may be required by any local, state or federal law."

Coats No. AIG SOUTH AFRICA LTD IS AN AUTHORISED FINANCIAL SERVICES PROVIDER LICENSED IN
SOUTH AFRICA FSP: 15805. REGISTERED ADDRESS, 77 DE KORTE ST, BRAAMFONTEIN,
JOHANNESBURG, SOUTH AFRICA

Rev 007 Dec 2004

A Member of American International Group Inc.
Bamburi Cement Ltd Date of Survey: 24th March 2005
Malindi Rd, Mombasa
KENYA Page 2

SCOPE

The Bamburi Cement Ltd manufacturing facility in Mombasa is an established (1967,

1976), 3175t/d, cement factory that is insured under primary Property coverages by AIG
Kenya. The survey of the factory was requested by AIG Kenya to update underwriting
information, review loss estimates, provide clarity on the progress of previous
recommendations and direction on new risk management recommendations. The
survey visit was liaised through the Bamburi Cement Nairobi head office, however owing
to a communication breakdown the Mombasa factory Management was not advised,
necessitating a review of the original scope to accommodate the visit at short notice.
This included the following aspects:

• A site tour to evaluate the layout of the factory, the associated hazard profile and
extent of protections to key exposures.
• A review of key management systems governing the prevention and mitigation of
loss.
• An exit interview to clarify progress on previous recommendations and the direction
of new risk management recommendations to further reduce the likelihood and
severity of losses.

HUMAN ELEMENT RISK IMPROVEMENTS

Previous Recommendations

There was no formal record of receipt or explicit action of the first survey report’s
recommendations. The recommendations are repeated for action.

99-11-01 Upgrading of Maintenance Practices in Dust Hazardous Locations

The standard of maintenance evident in the pulverised coal silo area is

not satisfactory considering the nature of the hazardous location.
Pulverised coal is considered a Class I dust which is defined as a dust
that ignites and propagates flame readily, the source of heat required for
ignition being small (eg. such as an electric spark). During the survey it
was observed that an instrument switch (CO2 interface) was damaged
and not properly mounted. This represents a viable source of ignition. To
ensure instrument/electrical installations do not provide sources of ignition
in these hazardous locations, it is recommended that the maintenance
practices in these areas be upgraded in accordance with recognised
standards (eg.SABS086-Installation and maintenance of electrical
equipment in explosive atmospheres).

Additional Comments: Contrary to the condition noted above, there were no

obvious non-conformances identified in this regard during the 2005 survey. The
recommendation is however repeated for formal feedback on management systems
governing maintenance practices of electrical equipment in explosive atmospheres (see
also Recommendation 05-03-02).

AIG SOUTH AFRICA IS AN AUTHORISED FINANCIAL SERVICES PROVIDER LICENSED IN SOUTH

AFRICA FSP: 15805. REGISTERED ADDRESS: 77 DE KORTE ST, BRAAMFONTEIN,
JOHANNESBURG, SOUTH AFRICA

A Member of American International Group Inc.

Bamburi Cement Ltd Date of Survey: 24th March 2005
Malindi Rd, Mombasa
KENYA Page 3

99-11-02 Incorporation of the Instrumented Protective Functions Testing and

Maintenance Programme into the Computerised Scheduling System

The frequency and procedure of testing of the instrumented protective

functions was not accurately determined during the survey. Instrumented
protective functions are critical safety systems, which need to be routinely
tested to maintain their reliability. To ensure the functions are tested in
accordance with the designers specifications it is recommended that the
testing programme and procedures be incorporated in the PSDI Maximal
computerised scheduling system.

Additional Comments: The computerised maintenance scheduling programme is

configured through MAXIMA software, which includes instrumentation/electrical
disciplines. The recommendation is repeated for formal feedback on management
systems governing the procedure and frequency of trip testing.

99-11-03 Establishment of a Documented Self-Inspection Programme for the

Control of Fire Protection Equipment

There is no documented self-inspection programme for the control of fire

protection equipment integrity. In the absence of a documented
programme the consistent management of fire protection equipment
condition is not possible. This will result in the deterioration of equipment,
thereby unnecessarily increasing the fire risk on the site. For example the
following undesirable conditions were present:

• The absence of an equipment inventory list to manage self-

inspections.
• The absence of routine fire alarm testing.
• The absence of a key for FH16 hose box, inhibiting inspections and
access in the event of fire.

To ensure the integrity of the fire protection equipment is consistently

maintained, it is recommended that a self-inspection programme be
implemented. A check-list upon which such a programme can be based
is attached.

Additional Comments: One of the CO2 bottle banks, for the coal dust explosion
suppression system, was indicating 34Barg, well below the minimum allowable limit of
100Barg. This indicates an absence of an integral inspection and maintenance
programme for fire protection equipment, which compromises the integrity of the fire
protections and specifically impairs these critical protections. The recommendation is
repeated for the inclusion of this key protection item in the self-inspection programme.

99-11-04 Relocation of the HFO Service Tank

The location of the HFO service tank beneath the kilns’ control room
represents a key fire exposure to this area. In the event of a tank fire
there is an obvious probability of escalation to the control room affecting
AIG SOUTH AFRICA IS AN AUTHORISED FINANCIAL SERVICES PROVIDER LICENSED IN SOUTH
AFRICA FSP: 15805. REGISTERED ADDRESS: 77 DE KORTE ST, BRAAMFONTEIN,
JOHANNESBURG, SOUTH AFRICA

A Member of American International Group Inc.

Bamburi Cement Ltd Date of Survey: 24th March 2005
Malindi Rd, Mombasa
KENYA Page 4

the continuity of operations. To manage this exposure it is recommended

that the service tank be relocated to a safe location, at least 15m from this
key area.

Additional Comments: This recommendation has not been implemented and is

repeated for reviewed consideration and action.

99-11-05 Review of Transformer Cleaning Programme

The transformers are fouled with dust from the plant environment. The
fouling of this equipment reduces the efficiency of the oil cooling fins
resulting in increased oil temperatures. This accelerates the degradation
of the cooling oils, increasing the likelihood of breakdown and fire. To
manage the condition of transformer oils through more favourable
operating temperature windows, it is recommended that the frequency of
transformer cleaning be reviewed to prevent the extent of fouling
observed during the survey.

Additional Comments: The factory environment is significantly improved owing to

the installation of electrostatic precipitators and bag filters on the kilns since the first visit.
The fouling of transformers is consequently significantly reduced and within observed
acceptable limits.

99-11-06 Provision of Transformer Cable Wall Penetration Cut-offs

The transformer cable penetrations in the Main Switch house basement

walls are not cut-off. In the event of a transformer failure and fire, the
escalation of the contingency to the cable basement is likely. This will
result in conflagration in this critical area, significantly increasing the
expected property loss and interruption to operations/business. To
manage this critical exposure, it is recommended that the cable wall
penetrations be cut-off with brick and mortar or other suitable fire
protection material.

Additional Comments: This recommendation has not been implemented and is

repeated for reviewed consideration and action.

99-11-07 Establishment of a Documented Hot-Work Permit System (Revised)

There is no documented hot work permit system established. In the

absence of a documented hot work permit system, the management of
the fire risks associated with hazardous hot works can not be consistently
controlled. This will lead to unsafe conditions resulting in fire. To ensure
the fire risks associated with hot works are consistently managed, it is
recommended that a documented hot work permit system be established.
Authorised issuer and acceptor signatories should be appointed and
trained on the implementation of the procedure and permits. A hot work
procedure and permit is attached for reference.

AIG SOUTH AFRICA IS AN AUTHORISED FINANCIAL SERVICES PROVIDER LICENSED IN SOUTH

AFRICA FSP: 15805. REGISTERED ADDRESS: 77 DE KORTE ST, BRAAMFONTEIN,
JOHANNESBURG, SOUTH AFRICA

A Member of American International Group Inc.

Bamburi Cement Ltd Date of Survey: 24th March 2005
Malindi Rd, Mombasa
KENYA Page 5

Additional Comments: During the survey hot work activities were in progress on
RM5 in the absence of a permit. This recommendation is repeated for reviewed
consideration and action.

New Recommendations

05-03-01 Establishment of Routine Combustible Dust Hazard Reviews

There is no scheduled routine hazard review of the combustible dusts by

an accredited specialist. In the absence of regular reviews the continual
control of these hazards and improvement to the risk can not be
consistently managed. For example during the survey it was noted that
the housekeeping of coal dusts in the coal mill area and the maintenance
of the CO2 suppression protection were in need of attention. These
conditions directly compromise the safety of the coal dust handling
facilities, increasing the likelihood of dust explosions and loss. To
adequately manage these hazards, it is recommended that routine hazard
review of these facilities be carried out by an accredited specialist.

05-03-02 Preparation of Area Classification Drawing for Combustible Dust

Hazardous Locations

There are no area classification drawings prepared for the hazardous

combustible coal dust locations. In the absence of these drawings, the
control of the appropriate selection and maintenance of electrical
apparatus in these areas can not be consistently managed. This will
result in the introduction of electrical sources of ignition in these areas
increasing the dust explosion risk of these hazardous areas. To ensure
the electrical installations in the dust hazardous locations do not
contribute to the fire/explosion risk of these areas, it is recommended that
a review of the dust locations be carried out, area classification drawings
prepared and electrical installations be replaced, as required, in
accordance with a recognised standard for these hazardous areas (eg.
SABS IEC 1241-1-1 for Zone 22 locations.)

05-03-03 Establishment of Operating Startup/Shutdown Checklists

There are no documented operating startup/shutdown critical task check-

lists developed for the plant. In the absence of these check-lists, the
probability of human error in operations is increased, increasing the
likelihood of failures and loss. To ensure critical tasks during startup and
shutdown are safely managed, it is recommended that check-lists be
documented and used by the operators.

05-03-04 Preparation of a Fire Plan Drawing and Documentation of the Fire

Protection Design Data

There is no fire plan drawing and documentation of the fire protection

design data. In the absence of this documentation, the control and
AIG SOUTH AFRICA IS AN AUTHORISED FINANCIAL SERVICES PROVIDER LICENSED IN SOUTH
AFRICA FSP: 15805. REGISTERED ADDRESS: 77 DE KORTE ST, BRAAMFONTEIN,
JOHANNESBURG, SOUTH AFRICA

A Member of American International Group Inc.

Bamburi Cement Ltd Date of Survey: 24th March 2005
Malindi Rd, Mombasa
KENYA Page 6

maintenance of the protections can not be consistently managed. For

example the private water supply has inadequate head for the demand of
the fire hydrant system, thereby compromising the integrity of this
protection. To ensure certainty, continuity and transfer of knowledge of
the facilities so they can be consistently managed, it is recommended that
the fire protection design data be documented and a fire plan drawing be
prepared containing the following details:

• A plot plan of the main building facilities, including any flammable

liquids storage areas.
• The routing and size of the fire main and location of the 21/2" hydrants
protecting the premises.
• The capacity and head characteristics of the private water supply (see
Recommendation 99-11-09).
• The test flow/pressure at the most remote hydrant point (see
Recommendation 99-11-09).
• The design standard, data and location of the automatic fire detection
alarm protected areas (see Recommendation 05-03-10).
• The design standard, data and location of fixed fire protections (see
Recommendation 05-03-05/06/07).
• The description or reference to inspection, testing and maintenance
routines of the protection systems’ components (see also
Recommendation 99-11-03).

PHYSICAL PROTECTION RISK IMPROVEMENTS

Previous Recommendations

There was no formal record of receipt or explicit action of the first survey report’s
recommendations. The recommendations are repeated for action.

99-11-08 Provision of Vacuum Cleaning System for Housekeeping of Coal Dusts

There is no vacuum cleaning system for the housekeeping of coal dusts in

the pulverised coal silo area. Consequently significant quantities of dust
accumulate in this area presenting a dust explosion and fire hazard.
Furthermore the use of air blowing to clear this material is not effective and
hazardous itself, which should be immediately prohibited. To ensure the
removal of these dusts is carried out continually and safely, thereby reducing
the risk of dust explosion and fire, it is recommended that a vacuum cleaning
system be installed.

Additional Comments: Although the condition of the coal mill area was in a much
improved state of housekeeping and the furnace coal pump’s area has been opened up
to remove confinement and provide natural ventilation, there is still an accumulation of
coal dust representing a secondary dust explosion risk. The recommendation is
repeated for formal feedback on the dust cleaning facilities and management systems
governing the maintenance practices of these hazardous dust locations.

AIG SOUTH AFRICA IS AN AUTHORISED FINANCIAL SERVICES PROVIDER LICENSED IN SOUTH

AFRICA FSP: 15805. REGISTERED ADDRESS: 77 DE KORTE ST, BRAAMFONTEIN,
JOHANNESBURG, SOUTH AFRICA

A Member of American International Group Inc.

Bamburi Cement Ltd Date of Survey: 24th March 2005
Malindi Rd, Mombasa
KENYA Page 7

99-11-09 Provision of Adequate Private Water Supplies (Revised)

The gravity tank fire water supply for the hydrants is inadequate. In the
absence of an adequate and reliable water supply, the fire fighting capability
of the site is compromised. This increases the probability of escalation and
interruption to business operations. To ensure adequate water resources for
manual and automatic fire fighting measures, it is recommended that an
adequate private water supply be provided in accordance with recognised
standards (eg. NFPA20/22, Installation of Fire Pumps and Water Tanks).
The water supply should be sized to deliver 2000-1800l/min at the most
remote hydrant point at a minimum of 300kPag pressure.

Additional Comments: The static pressure of the private water supply is about
350kPag and a hydrant test during the 2005 survey developed an estimated flow of
500l/min at 25kPag. This recommendation is repeated for reviewed consideration and
action.

99-11-10 Provision of Fire Protection Measures for the HFO Bulk Storage Facility
(Revised)

The HFO storage tanks are located adjacent to the Works/Control Room
building. In the event of a tank fire there is a likely conflagration exposure to
the critical Works/Control Room building, which will result in the interruption
to production operations. To manage the conflagration exposure in this
critical area it is recommended that a fire wall (2-hour fire rated) be erected
between the tanks and the building. In addition to this, a fire hydrant and
foam extinguishing equipment (eg. AF120 mobile unit) should be provided for
active protection.

Additional Comments: This recommendation has not been implemented and is

repeated for reviewed consideration and action.

New Recommendations

05-03-05 Management of Fire Exposure in the RK2 Transformer Substation

Located Below the Central (Kiln 1/2) Electronic Equipment Room

The presence of the RK2 transformer (oil filled) substation directly below the
Kiln 1/2 central electronic equipment room represents a key fire and
business interruption exposure. In the event of a transformer failure and fire
there is a likely conflagration exposure to the Kiln 1/2 electronic equipment
room, which will result in a critical business interruption loss. To manage
this critical fire and business interruption exposure, it is recommended that
the transformer be relocated to an area remote from the electronic
equipment room.

Alternatively, the substation enclosure should be fire proofed for 2hr fire
resistance, cable decking penetrations fire stopped (2hr fire rated), automatic
AIG SOUTH AFRICA IS AN AUTHORISED FINANCIAL SERVICES PROVIDER LICENSED IN SOUTH
AFRICA FSP: 15805. REGISTERED ADDRESS: 77 DE KORTE ST, BRAAMFONTEIN,
JOHANNESBURG, SOUTH AFRICA

A Member of American International Group Inc.

Bamburi Cement Ltd Date of Survey: 24th March 2005
Malindi Rd, Mombasa
KENYA Page 8

sprinklers installed (10mm/min density) and bund walls provided for the
containment of oil and 30minutes of sprinkler flow volume (see FM5-4 –
Transformers, FM5-31 – Cables and Bus Bars, NFPA13 – Standard for the
Installation of Sprinkler Systems, NFPA221 – Standard for Fire
Walls/Barriers). The man-way opening to/from the cable tunnel should be
cut-off with 2hr rated fire-stops. The old cables and other combustible
storage should be removed and the enclosure maintained in a clean and
orderly condition (see Photograph). The cable reticulations should be
installed in properly secured rack arrangements in accordance with
recognized standards (see Recommendation 05-03-08).

05-03-06 Provision of Automatic Fire Suppression in the RK1/2 Central

Electronic Equipment Room

There is no automatic fire suppression system installed in the RK1/2 central

electronic equipment room. This represents a critical fire and business
interruption exposure. In the event of a cable fire there is a likely
conflagration exposure owing to the presence of a moderate grouped cable
fire load and wood floor panels. In addition to this the sensitivity of electronic
equipment to smoke damage is severe, which represents a likely complete
loss in this area under fire contingencies. To manage this critical fire and
business interruption exposure, it is recommended that an automatic very
early smoke/fire detection/suppression system be installed in the room in
accordance with recognized fire protection standards (eg. NFPA2001-
Standard on Clean Agent Fire Extinguishing Systems, NFPA75 – Standard
for the Protection of Electronic Computer/Data Processing Equipment,
NFPA72 – National Fire Alarm Code, FM5-32 – Electronic Data Processing
Systems, FM5-48 – Automatic Fire Detection).

05-03-07 Provision of Automatic Sprinkler Protection for the Main Substation

Transformers and Cable Basement

There is no automatic active fire protection installed in the main substation

transformer and cable basement. This represents a critical fire and business
interruption exposure. In the event of a transformer fire or cable basement
fire there is a likely conflagration exposure owing to the presence of
transformer oils and a grouped cable fire load (see photograph and also
Recommendation 99-11-06). To manage this critical fire and business
interruption exposure, it is recommended that automatic sprinkler protection
be provided for the transformers (10mm/min design density) and the cable
basement (5-7.5mm/min design desity) (see FM5-4 Transformers, FM5-31
Cables and Bus Bars). The sprinkler protection should be designed and
installed in accordance with a recognized standard (eg. NFPA13 Standard
for the Installation of Sprinkler Systems).

05-03-08 Development and Implementation of Recognised Engineering

Standards for Cable Reticulation Systems

AIG SOUTH AFRICA IS AN AUTHORISED FINANCIAL SERVICES PROVIDER LICENSED IN SOUTH

AFRICA FSP: 15805. REGISTERED ADDRESS: 77 DE KORTE ST, BRAAMFONTEIN,
JOHANNESBURG, SOUTH AFRICA

A Member of American International Group Inc.

Bamburi Cement Ltd Date of Survey: 24th March 2005
Malindi Rd, Mombasa
KENYA Page 9

There are no consistent engineering standards governing the installation of

cable reticulation systems. This has resulted in the haphazard arrangement
and grouping of cables, significantly increasing the fire load and risk of these
installations, which is a critical fire and business interruption exposure. To
manage this exposure it is recommended that a recognized engineering
standard be adopted and a strategy developed to implement that standard
(see Recommendation FM5-31 Cables and Bus Bars, NFPA70/ANSI C1
National Electrical Code).

05-03-09 Provision of Automatic Sprinkler Protection for Cable Tunnels

There is no fixed, active fire protection installed in the cable tunnels. This
represents a critical fire and business interruption exposure. In the event of
a cable tunnel fire there is a likely conflagration exposure owing to the
presence of a grouped cable fire load and the general inaccessibility of the
area for manual intervention. To manage this critical fire and business
interruption exposure, it is recommended that automatic sprinkler protection
be provided for the cable tunnels (5mm/min design density over 216m2 or
30m linear distance, see FM5-31 Cables and Bus Bars). The sprinkler
protection should be designed and installed in accordance with a recognized
standard (eg. NFPA13 Standard for the Installation of Sprinkler Systems).

05-03-10 Provision of Automatic Fire Detection Alarm Systems in Critical Fire

Exposure Areas

There are no automatic fire detection alarm systems installed in the critical
fire exposure areas (eg. Main Substation’s and other substations’ switch
panel rooms). In the absence of these protections the early warning of fire is
improbable, increasing the likelihood of conflagration and interruption to
business. To ensure early warning of fire in key areas it is recommended
that this protection be installed in these unprotected areas. The protection
should be provided in the sensitive administration areas, engineering
stores/offices, electrical substation/generator rooms and any other areas that
are not continuously occupied by personnel and where there is the
probability for the unacceptable spread of fire and disruption to business
operations. The alarms should be liked to a continuously occupied central
control station for monitoring and emergency response. See FM5-48
Standard on Automatic Fire Detection, NFPA72 National Fire Alarm Code.

AIG SOUTH AFRICA IS AN AUTHORISED FINANCIAL SERVICES PROVIDER LICENSED IN SOUTH

AFRICA FSP: 15805. REGISTERED ADDRESS: 77 DE KORTE ST, BRAAMFONTEIN,
JOHANNESBURG, SOUTH AFRICA

A Member of American International Group Inc.

Bamburi Cement Ltd Date of Survey: 24th March 2005
Malindi Rd, Mombasa
KENYA Page 10

SUMMARY

A survey of the Bamburi Cement Ltd manufacturing facility in Mombasa was carried out
on 24th March 2005 at the request of AIG Kenya. The objective of the survey was to
update underwriting information, review loss estimates, determine progress of previous
recommendations and provide direction on new risk management recommendations.
The survey was liaised through the Bamburi Cement Nairobi head office, however owing
to a communication breakdown, the Mombasa factory Management was not advised of
the visit, preventing Management planning and limiting the depth of the survey. This
was a second visit to the cement factory.

The Bamburi Cement facility in Mombasa is an established (1967, 1976) cement factory,
producing portland cement for the building construction industry (AIU Occupancy,
Cement, 3241, Hazard Grade 6 and Quarrying, 1422, Hazard Grade 1). The facility
produces about ??kt/annum of cement in a two-in-parallel kiln/mill (1200t/d, 1950t/d) line
operation. The cement is produced from on-site quarried deposits of coral stone, off-site
quarried (by contractor) deposits of shale and imported gypsum, bauxite and iron ore
from sources abroad.

The presence of large rotating equipment items (crushers, mills, rotary kilns) represents
an obvious exposure to machinery breakdowns. The arrangement, however, of the
production facility in two-in-parallel kiln/mill lines with spare redundant capacity in some
areas (eg. cement mills), represents a positive feature mitigating business interruption
exposures to machinery breakdowns. This is further managed through a preventative
maintenance philosophy incorporating time scheduled and predictive reliability centred
components using on/off-line condition monitoring. Infra-red imaging, vibration and oil
analyses are routinely programmed on electrical distribution equipment, bearings and
transformers. The maintenance programme is well managed and administrated through
a computerised system (MAXIMA) incorporating work order planning, documented work
instructions, history and other management reporting tools.

The key utility is electricity, which is purchased from a dual redundant Kenya Power and
Lighting Company (KPLC) 33kV supply. A critical business interruption exposure
associated with the supply is the presence of a single 23MVA, 33kV/11kV, KPLC power
transformer in the incoming switchyard. A service level agreement with KPLC specifies
the availability of a spare unit within a 7day lead time (?).

The Bamburi Cement production facility is established in a sparsely developed coastal

district, about 10-20kilometres north of the city of Mombasa in Kenya. The facility is
developed on abundant ground in the flat coastal shelf area of Mombasa’s north coast,
about 1-2kilometres from the coastline. The site is enclosed within low to moderate
security grade wall and fence, bordered by public roads, forestry land and low density
developed commercial properties. There are no unusual or peculiar natural or man-
made features exposing the property.

The Bamburi Cement facility is a multiple building complex, established on a very large
boundary plan. The main production buildings are lofty single and multiple storey
structures, constructed of concrete/steel frame, brick/steel sheeting walls, concrete deck
and concrete/steel sheeting roof (Construction Class AA/B). Internally the buildings
AIG SOUTH AFRICA IS AN AUTHORISED FINANCIAL SERVICES PROVIDER LICENSED IN SOUTH
AFRICA FSP: 15805. REGISTERED ADDRESS: 77 DE KORTE ST, BRAAMFONTEIN,
JOHANNESBURG, SOUTH AFRICA

A Member of American International Group Inc.

Bamburi Cement Ltd Date of Survey: 24th March 2005
Malindi Rd, Mombasa
KENYA Page 11

communicate horizontally and vertically throughout, although there is generally a low fire
load and continuity of combustibles representing an improbable/negligible conflagration
exposure.

The primary hazards of the occupancy are those associated with the operation of heavy
production equipment, large HT electrical infrastructure, fired (pulverised coal) kilns and
the handling of combustible coal dusts. The fire/explosion hazards are considered
moderate in extent, which are restricted to localised areas, such as the kiln, electrostatic
precipitator/bag filters, electrical transformer/switch substations, cable tunnel areas,
conveyer belts, fuel storage and engineering stores. The combustible dust hazards and
explosion risks are managed through the provision of explosion venting and automatic
CO2 explosion suppression protection, although the integrity of these protections is
compromised by the absence of inspection, testing and maintenance programmes and
routine specialist hazard reviews. Peculiar business interruption exposures to fire are
the presence of an unprotected central electronic control equipment room, a
communicating oil filled transformer substation below this room and the absence of
recognised engineering standards governing the installation of grouped cables in the
cable tunnels and other substation areas.

The general fire protection is based on a manual philosophy incorporating hand fire
extinguishers for incipient stage fire defence and a hydrant main system for
secondary/developed fires. The hydrant main system is supplied from a private,
elevated tank, which head is inadequate for the hydrant demand and compromises the
integrity of this protection. The emergency management is developed under an
appointed command and fire response team structure, governed by documented
emergency procedures. Fire drills are exercised quarterly to test the co-ordination and
effectiveness of the emergency response. Public protection is provided by the Mombasa
fire brigade, a professional, full-time municipal service, located about 10-15minutes
away.

IMPORTANT CHANGES SINCE LAST SURVEY

The kilns’ fines dust management has been upgraded through the installation of
electrostatic precipitators and bag filters, which has reduced general dust fouling of the
plant and the environment. A control system upgrade has centralised the electronic
control equipment in the old control room above and in direct communication with the
Kiln #2 transformer substation, representing a critical business interruption exposure to
fire.

LOSS HISTORY

On ?? ?? 2005, a failure of the control system on Kiln #? resulted in the release of

hot/incandescent klinker onto the product conveyer belt (rubber) which caught alight.
The fire was extinguished by the site fire team and the Mombasa fire brigade after
several hours. The property gross loss is estimated KSh ??. The rubber conveyer belt
will be replaced with a steel belt to prevent a recurrence of a fire in this area.

AIG SOUTH AFRICA IS AN AUTHORISED FINANCIAL SERVICES PROVIDER LICENSED IN SOUTH

AFRICA FSP: 15805. REGISTERED ADDRESS: 77 DE KORTE ST, BRAAMFONTEIN,
JOHANNESBURG, SOUTH AFRICA

A Member of American International Group Inc.

Bamburi Cement Ltd Date of Survey: 24th March 2005
Malindi Rd, Mombasa
KENYA Page 12

GENERAL COMMENTS

PHOTOGRAPHS

Aerial view of factory showing extent of site and surrounds

Hydrant test at full bore flow conditions

AIG SOUTH AFRICA IS AN AUTHORISED FINANCIAL SERVICES PROVIDER LICENSED IN SOUTH

AFRICA FSP: 15805. REGISTERED ADDRESS: 77 DE KORTE ST, BRAAMFONTEIN,
JOHANNESBURG, SOUTH AFRICA

A Member of American International Group Inc.

Bamburi Cement Ltd Date of Survey: 24th March 2005
Malindi Rd, Mombasa
KENYA Page 13

View of new electrostatic precipitator and bag filters and good condition of facilities

View of Crane Hall and good road access features

AIG SOUTH AFRICA IS AN AUTHORISED FINANCIAL SERVICES PROVIDER LICENSED IN SOUTH

AFRICA FSP: 15805. REGISTERED ADDRESS: 77 DE KORTE ST, BRAAMFONTEIN,
JOHANNESBURG, SOUTH AFRICA

A Member of American International Group Inc.

Bamburi Cement Ltd Date of Survey: 24th March 2005
Malindi Rd, Mombasa
KENYA Page 14

Main Substation cable basement showing unprotected wall penetrations

Cable basement showing grouped cable arrangement and communication with cable
tunnel

AIG SOUTH AFRICA IS AN AUTHORISED FINANCIAL SERVICES PROVIDER LICENSED IN SOUTH

AFRICA FSP: 15805. REGISTERED ADDRESS: 77 DE KORTE ST, BRAAMFONTEIN,
JOHANNESBURG, SOUTH AFRICA

A Member of American International Group Inc.

Bamburi Cement Ltd Date of Survey: 24th March 2005
Malindi Rd, Mombasa
KENYA Page 15

Main Substation cable basement showing grouped cable arrangement feature

Main substation transformer enclosure showing communication with switch room

enclosure via ventilation screen

AIG SOUTH AFRICA IS AN AUTHORISED FINANCIAL SERVICES PROVIDER LICENSED IN SOUTH

AFRICA FSP: 15805. REGISTERED ADDRESS: 77 DE KORTE ST, BRAAMFONTEIN,
JOHANNESBURG, SOUTH AFRICA

A Member of American International Group Inc.

Bamburi Cement Ltd Date of Survey: 24th March 2005
Malindi Rd, Mombasa
KENYA Page 16

View of ventilation screen opening from switch room showing communication with
transformer enclosure

View of unprotected cable penetrations from transformer enclosure showing

communication with Main Substation cable basement

AIG SOUTH AFRICA IS AN AUTHORISED FINANCIAL SERVICES PROVIDER LICENSED IN SOUTH

AFRICA FSP: 15805. REGISTERED ADDRESS: 77 DE KORTE ST, BRAAMFONTEIN,
JOHANNESBURG, SOUTH AFRICA

A Member of American International Group Inc.

Bamburi Cement Ltd Date of Survey: 24th March 2005
Malindi Rd, Mombasa
KENYA Page 17

View of accumulation of combustible waste materials in RK2 transformer substation

below the electronic equipment room

View of unprotected cable penetrations in RK2 transformer substation showing

communication with electronic equipment room above

AIG SOUTH AFRICA IS AN AUTHORISED FINANCIAL SERVICES PROVIDER LICENSED IN SOUTH

AFRICA FSP: 15805. REGISTERED ADDRESS: 77 DE KORTE ST, BRAAMFONTEIN,
JOHANNESBURG, SOUTH AFRICA

A Member of American International Group Inc.

Bamburi Cement Ltd Date of Survey: 24th March 2005
Malindi Rd, Mombasa
KENYA Page 18

View of unprotected cable penetrations in RK2 transformer substation showing

communication with electronic equipment room above

View of unprotected cable tunnel opening and grouped cable installation features in RK2
transformer substation

AIG SOUTH AFRICA IS AN AUTHORISED FINANCIAL SERVICES PROVIDER LICENSED IN SOUTH

AFRICA FSP: 15805. REGISTERED ADDRESS: 77 DE KORTE ST, BRAAMFONTEIN,
JOHANNESBURG, SOUTH AFRICA

A Member of American International Group Inc.

Bamburi Cement Ltd Date of Survey: 24th March 2005
Malindi Rd, Mombasa
KENYA Page 19

View of cable floor void feature in central electronic equipment room

AIG SOUTH AFRICA IS AN AUTHORISED FINANCIAL SERVICES PROVIDER LICENSED IN SOUTH

AFRICA FSP: 15805. REGISTERED ADDRESS: 77 DE KORTE ST, BRAAMFONTEIN,
JOHANNESBURG, SOUTH AFRICA

A Member of American International Group Inc.

Bamburi Cement Ltd Date of Survey: 24th March 2005
Malindi Rd, Mombasa
KENYA Page 20

SITE PLAN

AIG SOUTH AFRICA IS AN AUTHORISED FINANCIAL SERVICES PROVIDER LICENSED IN SOUTH

AFRICA FSP: 15805. REGISTERED ADDRESS: 77 DE KORTE ST, BRAAMFONTEIN,
JOHANNESBURG, SOUTH AFRICA

A Member of American International Group Inc.

Bamburi Cement Ltd Date of Survey: 24th March 2005
Malindi Rd, Mombasa
KENYA Page 21

SUPPORTING DOCUMENTS

Identify Hard Copy information, or files that support this Report.

Sketch/Drawing Yes No
Insured’s Brochure Yes No
Others (listed below) Yes No

• Site Plan
• Hot Work Permit & Procedure

Risk Engineer Andrew Coxon

Telephone 27-11-408 6882
E-mail Address [email protected]

AIG SOUTH AFRICA IS AN AUTHORISED FINANCIAL SERVICES PROVIDER LICENSED IN SOUTH

AFRICA FSP: 15805. REGISTERED ADDRESS: 77 DE KORTE ST, BRAAMFONTEIN,
JOHANNESBURG, SOUTH AFRICA

A Member of American International Group Inc.