Document:

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                                                                  Exhibit 10.1.b

                              BASIC TOLL AGREEMENT

                                     BETWEEN

                          EMPRESA ELECTRICA PANGUE S.A.

                                       AND

                 COMPANIA NACIONAL DE TRANSMISION ELECTRICA S.A.
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In Santiago de Chile, on October 23, 2000, between EMPRESA ELECTRICA PANGUE
S.A., hereinafter, without distinction PANGUE, represented by its General
Manager, Mr. Rodrigo Naranjo Martorell, both with domicile in Santiago, Santa
Rosa 76, floor 14, and COMPANIA NACIONAL DE TRANSMISION ELECTRICA S.A.,
hereinafter and without distinction TRANSELEC, represented by its General
Manager, Mr. Guillermo Espinosa Ihnen, both with domicile in Santiago, Santa
Rosa No 76, floor 9, the following has been agreed:

ONE: PURPOSE.

This contract has the purpose of agreeing as the annual basic toll payments that
PANGUE is to pay TRANSELEC for its PANGUE Power Station (power rating 467.0 MW)
hereinafter PANGUE Station, as of October 23, 2000.

The payment of the basic annual toll payments shall give PANGUE the right to
upload up to the maximum power and energy production capacity of the PANGUE
Power Station, which capacities are detailed in the preceding paragraph, to
transmit it, and to download energy and power from the facilities, which are
part of its area of influence. PANGUE must exercise this right in accordance
with such provisions as the Economic Load Dispatch Center of the Central
Interconnected System (ELDC-CIS/CDEC-SIC) may impart for such purpose.

Likewise, such downloads without supplementary payments as Pangue may make in
its area of influence and at all junctions from which, under normal operating
conditions of the system, net physical transmissions occur toward said area of
influence, once it has paid the basic toll, are limited to:

a)    The firm power of the power plant, plus such power as may have been
      contracted with third parties that have paid the basic and supplementary
      tolls necessary for reaching the point of download;

b)    The total capacity of the transmission system involved, without the
      existence of any priority or order of preference in this respect among all
      the power plants that pay the basic toll.

c)    At such limits as the CDEC-SIC may establish, in consideration of that
      provided for in Article 198 of the Regulations for the General Electrical
      Services Law approved by Supreme Decree No. 327 of the Ministry of Mining,
      dated December 12, 1997, hereinafter the Electricity Regulations.

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Contrato Peaje Basico PANGUE - TRANSELEC                                       1
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TWO: AREA OF INFLUENCE.

The parties agree that the area of influence of the PANGUE Power Station is
comprised of the segments that connect the upload buses of said Station, which,
for the purposes of this Contract, correspond to Charrua 220 kV, to the basic
energy substation of the Central Interconnected System, CIS. As of the date of
signing of the present Contract, the basic energy substation referred to
corresponds to TRANSELEC's Quillota substation, according to the selection of
basic energy substation contained in the semi-annual setting of junction prices
of April, 2000.

In the event that, in future settings of junction prices, the basic energy
substation is selected at another junction of the system, the extent of the area
of influence of the PANGUE Station shall be modified accordingly. Such
modification shall govern from the same month of the setting of junction prices
as the one when a change in the location of the basic energy substation takes
place.

Consistently with the preceding paragraph, the parties agree that as of October
23, 2000, the area of influence of the PANGUE Station is to be comprised by the
segments detailed in Annex No 1 of this Contract.

THREE AVNR + CO&M.

The parties agree that, during the period between October 23, 2000 and March 31,
2002, the values of the Annual Payment for New Replacement Values plus the Costs
of Operation and Maintenance (the AVNR + CO&M) of the above mentioned facilities
that belong to the area of influence of the PANGUE Station, are those presented
in Annex No 1 to this Contract, expressed in thousands of United States dollars
of January 1, 1999.

FOUR: PRO-RATA AMOUNTS

The parties agree that the pro-rata amounts for the PANGUE Station for the
period October 23, 2000 to March 31, 2002 are those detailed in Annex No 2 to
this Contract.

FIVE: DEFINITION OF THE NEW REPLACEMENT VALUE

For the purposes of this Contract, the New Replacement Value for the
transmission facilities, hereinafter, without distinction, VNR, shall be
understood to mean the cost of renewing all works, facilities, and physical
assets for the transmission of electricity.

Renewal is understood to mean the replacement of works, facilities and physical
assets presently in service by others that are equal. In the event that they are
not available on the market, the respective cost is to be that of the works,
facilities and physical assets of state-of-the-art technology, and actual cost,
meant to fulfill the same function with the same levels of service quality. In
the case of the transmission lines, those existing are considered with respect
to the topographical layout, structures, voltage, number of circuits, and
electrical transmission capacity. In the case of the substations, consideration
is given, in addition to the primary control and protection equipment, to the
auxiliary equipment, including that of

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Contrato Peaje Basico PANGUE - TRANSELEC                                       2
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the auxiliary services, battery banks and emergency equipment, buildings that
house the equipment, land and general works.

The costs associated with the VNR's for the transmission lines and for the
substations which constitute the area of influence of the PANGUE Station include
the following items, which are set forth solely as examples, this listing not
being exhaustive: engineering and design, construction management and
inspection, easements and indemnities, supply of imported and domestic equipment
and materials including their respective import tariffs, port charges and
domestic and international freight, construction and assembly of works and
equipment, other financial and administrative costs such as staggered interest,
overhead and operating capital.

For purposes of the valuation of the lines, the original copper conductor is
replaced by one of aluminum with equivalent characteristics. In the valuation of
substations, the switches for large volumes of oil, for compressed air, and for
large volumes of SF6 gas have been valued as switches for small SF6 gas volumes.
The synchronous condensers are valued as static condensers.

SIX: OPERATING AND MAINTENANCE COSTS

The operaing and maintenance costs (CO&M) include all of costs requiresd for the
adequate maintenance of the facilities and their proper decentralized operation
subordinate to the Zone Operation Centers (COZ) and to a Centralized
Transmission Dispatch.

The CO&M's take into consideration the operating expenses that cover the
planning, execution and control of operation and maintenance activities, whether
the latter are preventative, programmed or non-programmed corrective, as well as
the expenses and insurance for accidents to buildings and facilities

In addition, the CO&M's include the costs of capital, of operation, and of
maintenance of vehicles, maintenance equipment, telecommunication systems, tools
and instruments required for operation and maintenance, including the remote
terminal units (URT), Zone Operation Centers (COZ), and Centralized Transmission
Dispatch. In addition, the CO&M's include the costs of capital, operation, and
maintenance for of land and buildings, such as workshops, offices, and
warehouses, which house operation and maintenance activities

SEVEN: ANNUAL BASIC TOLL PAYMENTS UP TO MARCH 31, 2002

The parties agree that as of October 23, 2000, to March 31, 2002, under the
heading basic AVNR + CO&M for its power station, PANGUE shall pay TRANSELEC such
amount as results from multiplying the sum of the annual payment of the new
replacement value (AVNR) and the operating and maintenance costs (CO&M) for each
one of the facilities of the area of influence of the said power station by the
pro-rata amount corresponding to this power station.

As a result of foregoing facts, the parties agree that the annual basic toll
payments for the PANGUE Power Station of the period October 23, 2000 to March
31, 2002, net of VAT, which PANGUE is to pay TRANSELEC, are those of the
following Table No 1. These annual payments, the calculation of which is
detailed in Annex No 3 to this Contract, are expressed in United States dollars
of January 1, 1999.

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Contrato Peaje Basico PANGUE - TRANSELEC                                       3
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                                   Table No 1
                 AVNR + CO&M PANGUE Station (basic AVNR + CO&M)
                        Basic Energy Substation: Quillota
                 Period from October 23, 2000, to March 31, 2002
                Values in thousands of US $ as of January 1, 1999

      ---------------------------------------------------------------------
              Station                                PERIOD
                                  -----------------------------------------
                                  October 23, 2000 to      April 1, 2001 to
                                  March 31, 2001           March 31, 2002
      ---------------------------------------------------------------------
      PANGUE                                11,580.93            11,209.82

      ---------------------------------------------------------------------

      ---------------------------------------------------------------------
                     TOTAL                  11,580.93            11,209.82
      ---------------------------------------------------------------------

The values contained in Table No. 1 take into consideration that as of October
23, 2000, the area of influence of the PANGUE Station extends from the download
bus of the power plant up to TRANSELEC's Quillota substation.

EIGHT: ANNUAL BASIC TOLL PAYMENTS AS OF APRIL 1, 2002

Starting from April 1, 2002, and until the date when a modification of the
present basic toll agreement maycome into effect, as a result of the provisions
contained in Clause TWELVE, the amount of the basic toll that PANGUE shall pay
TRANSELEC shall be calculated as follows:

a)    The facilities which comprise the area of influence thereof established by
      the Board of Directors of the ELDC-CIS/CDEC - SIC in accordance with
      letter b) of Article 176 of the Electricity Regulations.

b)    The values of basic tolls per unit of firm power for each segment
      calculated by the Div. Tolls Administration of the ELDC-CIS/CDEC - SIC, in
      accordance with that provided for in letter h) of Article 182 of the
      Electricity Regulations. For such purposes the VNR's and CO&M's indicated
      in letter d) below, shall be taken into consideration.

c)    The firm power calculated by the Operations Department of the
      ELDC-CIS/CDEC - SIC in accordance with letter f) of Article 181 of the
      Electricity Regulations.

      In the event that the ELDC-CIS/CDEC - SIC has not calculated the firm
      power of the CIS power plants, the most recent values of firm power of the
      PANGUE station in force on such date shall be employed in a provisional
      manner.

d)    The New Replacement Values (VNR's) and the Operating and Maintenance Costs
      (CO&M's) published by TRANSELEC in the book of that same title, edition of
      July, 1999, duly indexed according to the formulas contained in that
      publication.

e)    The calculation of the basic toll for pangue shall be made annually and
      the new value shall take effect between the months of April of each year
      and March of the next year.

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Contrato Peaje Basico PANGUE - TRANSELEC                                       4
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NINE. METHOD OF PAYMENT.

The basic AVNR + CO&M's shall be paid in twelve monthly installments upon
accrual each month, equivalent to multiplying the value of the basic AVNR + CO&M
indicated for each period and power plant of Table No 1 above, or the basic
tolls resulting from applying that provided for in Clause EIGHT, duly indexed
according to that provided for in Clause TEN by the factor of 0.07974 (seven
thousand nine hundred seventy-four one-hundred-thousandths) and converted to
pesos of domestic currency employing the exchange rate corresponding to the
"observed dollar" referred to in the first paragraph of No 6 of Chapter I,
Title I, of the Compendium of International Currency Exchange Rules published by
the Central Bank of Chile, or such as may replace it in the future, at the
average for the month corresponding to payment. The monthly payment thus
stipulated must contain a separate VAT charge.

TRANSELEC shall send the invoice within the first five (5) working days of the
month that follows the month to which the charge pertains. PANGUE binds itself
to pay such invoice to the treasury of TRANSELEC in Santiago, in cash, by
uncrossed check, within the banking region of Santiago, or bank order payable at
sight, at the latest before noon of the sixteenth day of each month subsequent
to the month to which the charge pertains. If such day is a Saturday, Sunday or
holiday, the time due shall extend up to noon of the next working day.

Nevertheless, the parties may agree to a different method of payment, which may
be a bank transfer of funds or deposits into any of TRANSELEC's current
accounts. In such case PANGUE must inform TRANSELEC in writing as to the date,
amount, current account number, and bank through which the payment or deposit
has been made, as well as the number of the invoice or invoices that it has
paid.

In the case of default or simple delay in payment, interest shall accrue at the
maximum contractual rate for non-indexed transactions of less than or more than
ninety (90) days, as the case may be, from the date when the default or simple
delay took place and up to the date of the effective payment thereof.

In the event that TRANSELEC sends the invoice late, PANGUE shall be able to
postpone its payment by one day for each day of delay and such postponement
shall not be construed as default or simple delay for the purposes of charging
the interest referred to in the preceding paragraph.

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Contrato Peaje Basico PANGUE - TRANSELEC                                       5
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TEN: INDEXATION.

The parties agree that the monthly payments pertaining to the annual basic tolls
for the PANGUE Power Station are to be indexed semi-annually on January 1 and on
July 1 of each year, multiplying the monthly payment in force the previous month
by such factor as may result from applying the formula for indexing tolls
detailed in Annez No 4 to the present document. For these purposes, the said
indexing factor shall be rounded off to the fifth decimal.

The first indexing shall take place on July 1, 2000 and shall cover the period
between January 1, 1999 and June 30, 2000. The parties agree that the indexing
factors corresponding to the first and second semi-annual periods of 1999 and to
the first semi-annual period of 2000 are 0.95896, 0.94468 and 1.04100,
respectively.

Whenever a semi-annual indexing of tolls is applicable, TRANSELEC shall prepare
and shall send PANGUE a memorandum of calculation containing, in a detailed and
documented manner, the value of the new monthly payment. The dispatch of this
document must take place five (5) working days in advance of the date of
dispatch of the invoices corresponding to the months of January and July of each
year.

ELEVEN SETTLEMENT OF VIRTs.

The parties agree that they shall settle every month, between themselves, the
valuation of the uploads and downloads per segment (VIRT's) of each one of the
segments indicated in Clause TWO, resulting from the balances of uploads and
downloads made by the ELDC-CIS/CDEC - SIC for each one of the said segments.
This settlement shall take place during the month after the month to which the
settlement pertains, once TRANSELEC has actually received such amounts from the
rest of the members of the ELDC-CIS/CDEC - SIC. In the event that the
ELDC-CIS/CDEC - SIC has not determined the VIRT's or in the event that TRANSELEC
has not received all or part of the VIRT's from the rest of the members of the
ELDC-CIS/CDEC - SIC, the parties may agree on provisional settlements under this
heading, on account against final payment.

The amount to be paid for the settlement of the VIRT's shall be equal to the
VIRT of each segment multiplied by the pro-rata amount of PANGUE for such
segment. If the amount of the settlement corresponding to the entirety of the
segments indicated in Clause TWO proves to be greater than zero, TRANSELEC shall
pay such amount to PANGUE plus VAT and, to the contrary, if the amount of the
total settlement proves to be less than zero, PANGUE shall pay TRANSELEC the
absolute value of such amount, plus VAT. For purposes of these settlements, if
appropriate, the same interest rate as that employed by the ELDC-CIS/CDEC - SIC
shall be used.

If in the period after March 30, 2002, such basic tolls as PANGUE may pay
TRANSELEC take into account the discount applied to the tariff revenues
estimated by the Div. Administration of Tolls of the ELDC-CIS/CDEC - SIC, the
latter shall be settled by readjustment between the parties in a monthly manner
by applying that provided for in this Clause, but with respect to the discounted
tariff revenue values.

TWELVE: PERIOD OF EFFECTIVENESS.

The present agreement shall have an unlimited period of effectiveness as of
October 23, 2000.

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Contrato Peaje Basico PANGUE - TRANSELEC                                       6
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Regardless of the provisions of the previous paragraph, as of January 1, 2006,
either one party may request from the other party in writing, a partial or total
revision of the Contract.

Revision of this Contract must be made earlier if legal amendments arise in the
Decree Law (Mining) (DFL - M) No 1/82, Articles 51, 51A to 51F, in such manner
as to adapt the agreement to such legal changes. Revision of the agreement for
this reason may be requested by either party and shall take effect once the
legal modifications come into force.

Likewise, if the parties do not reach an agreement on the modifications to the
present Contract arising from such general or partial revision as either of the
parties may request as of January 1, 2006, within a term of six months from the
date of receipt of such request, the parties agree to submit the difference to
the arbitration panel provided for in Clause EIGHTEEN. The Contract shall be
amended under the terms decided by such arbitration panel.

In no case shall a pause arise in the PANGUE's payments to TRANSELEC. In the
event that methodological or regulatory gaps exist as the result of legal
amendments, the monthly payments shall continue to be made provisionally based
on this Contract , subject to an adjusted settlement until such time as the
issue is solved by mutual agreement between the parties or in accordance with
the procedure established in Clause EIGHTEEN.

The respective modification of the basic toll, whether arising by agreement of
the parties or by decision of the arbitration panel, shall govern from the time
when the event causing such revision arises or comes into force, giving rise to
such readjusted monthly settlements as may pertain. The differences shall be
paid, if appropriate, by the debtor party, with the interest current for
non-indexed transactions of more than or less than 90 days, as may pertain,
within a maximum term of 30 days after the time when the agreement has been
reached or the arbitration award becomes executory.

THIRTEEN: REVISIONS OF THE BASIC TOLL

The parties agree that, during the period prior to March 31, 2002, the value of
the basic toll under this Contract can solely and exclusively be revised to
incorporate the effects caused by:

a)    The connection of new power plants to the CIS which are not included in
      the Works Program considered for the calculation of the toll.
b)    Change in the direction of the flow toward the basic energy substation of
      the CIS under typical operating conditions.
c)    Failure to materialize, lags and leads of projects considered in the Works
      Program, based on which tolls are calculated.
d)    Capacity increase of the PANGUE station.
e)    Changes in the capacity of the existing power plants.
f)    Disconnection, in the event of the conditions detailed in Article 167 of
      the Electricity Regulations, or a change in the point of connection of the
      existing power plants.
g)    Modifications of the facilities within the area of influence of PANGUE's
      station resulting from addition or removal of TRANSELEC facilities.
h)    Lags or leads of the transmission works envisioned in the calculated basic
      toll.

For purposes of that provided for in this Clause, reference is to be made to the
conditions employed in the application of the between ENDESA / TRANSELEC -
COLBUN arbitration award

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Contrato Peaje Basico PANGUE - TRANSELEC                                       7
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dated January 20, 1999, detailed in Annex No 1 to the report on the agreement
between TRANSELEC and COLBUN, approved by that Arbitral Tribunal on April 15,
1999.

Revision because of any of these reasons shall be initiated by the dispatch by
the interested party to the other party of a written report containing the
underlying technical and economic reasons. The addressee party of the report
shall have a maximum term of 30 consecutive days to analyze and answer the
report.

In the event that said report is rejected, whether expressly or due to the
passage of the term of 30 days without the issuance of a response, it shall be
deemed that a disagreement exists with respect to the modification proposed. In
such case the parties shall seek to resolve their differences directly. If
another 30 days pass and an agreement has not been reached, either of the
contracting parties shall be able to resort to the arbitration panel provided
for in Clause EIGHTEEN in order to resolve the dispute.

The modification of the basic toll, whether arising from the agreement of the
parties or from a decision of the Arbitral Tribunal, shall govern from the time
when the event causing such revision arises or comes into force, giving rise to
such monthly settlement readjustments as may pertain. The differences shall be
paid if appropriate, by the debtor party, with the interest current for
non-indexed transactions at more or less than 90 days, as may pertain, within a
maximum term of 30 days after the agreement or the arbitration award becomes
executory.

In no case shall a pause arise in the tolls that PANGUE pays TRANSELEC. In the
event of methodological or regulatory gaps resulting from legal amendments, the
monthly payments shall continue to be made based on this Contract, in a
provisional manner, subject to be adjusted as soon as the issue is solved by
mutual agreement between the parties or in accordance with the procedure set
forth in Clause EIGHTEEN.

Any modification of the facilities which comprise the area of influence or the
pro-rata amounts of PANGUE's station, resulting from a revision of the toll
provided for in this Clause shall give rise to the modification detailed in
Annexes No 1, No 2 or No 3, as may be appropriate.

The parties agree that the procedure for revising the value of the basic toll
which they have agreed to in this Clause, shall apply in serious cases involving
significant imbalances in the commutativity of the Contract, that is, it shall
only be applied in instances where it is ascertained that the economic effect of
one or more of the causes defined in letters a) to h) above, represents an
increase or decrease of at least 10% (ten percent) of the value of the annual
basic toll payment in force when the cause or causes giving rise to such
revision took place. In order to determine the percentage of the increase or
decrease in the annual payment, the number of power plants and their diversity
in terms of geographical location must be taken into account.

Regardless of that set forth in this Clause, in the event that in future
settings of junction prices, selection is made of a basic energy substation at
another junction of the system, the extent of the area of influence for the
PANGUE station shall be modified accordingly, pursuant to that provided for in
Clause TWO of this Contract. .

FOURTEEN: LIABILITIES.

The liabilities of the contracting parties shall correspond to those defined in
Decree Law No 1 of 1982 of the Ministry of Mining, hereinafter the Electricity
Law, the Electricity Regulations, the

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Contrato Peaje Basico PANGUE - TRANSELEC                                       8
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manuals and procedures of the ELDC-CIS/CDEC - SIC, and the amendments or changes
of the afore mentioned legal sources.

TRANSELEC shall at no time be liable for such damages or losses as PANGUE may
suffer due to a total or partial lack of supply of electrical energy and power,
excessive variations in voltage or frequency, or others, caused by technical
failures which may affect the facilities of the Transmission System of TRANSELEC
(SIT), or due to any other event that may interrupt, paralyze, or disturb
transmissions of energy or power at the facilities of the area of influence of
the PANGUE Station caused by an act of God or force majeure and, the listing
which follows not being exhaustive, the following: damage caused by natural
phenomena, telluric phenomena, lightning, storms, falling trees, floods, and
alluvia, among others.

On its part, PANGUE shall in no case be liable for such losses as TRANSELEC may
suffer due to technical failures or any other event which may interrupt,
paralyze, or disturb the generating or transmission of energy and power at the
PANGUE station by an act of God or force majeure. Among others, an act of God or
force majeure shall be deemed to be the occurrence of a prolonged drought that
prevents normal generation of energy.

FIFTEEN: SUSPENSION OF SERVICE

TRANSELEC may suspend the transmission of energy and power for the purpose of
scheduled modification or programmed maintenance. Such suspensions shall be
programmed and scheduled by TRANSELEC upon hearing the opinions on this subject
matter from the various generators affected by the this interruption of supply.
TRANSELEC must inform PANGUE in writing about such suspensions at least sixty
(60) days in advance.

The suspensions of service shall be governed by the Electricity Law, by the
Electricity Regulations, and by the rules and regulations of the ELDC-CIS/CDEC -
SIC.

TRANSELEC may also suspend the transmission of energy and power for emergency
repairs. Such suspensions shall take place after notifying PANGUE as far in
advance as the circumstances permit.

SIXTEEN: INFORMATION ON OPERATION.

TRANSELEC commits itself to send PANGUE, whenever events come to pass that
affect the normal operation of the transmission facilities of PANGUE's area of
influence, a report in which it shall set forth the irregularities and/or the
interruptions in service occurring at such facilities, before 12:00 a.m. of the
day before the occurrence of the event. That report shall inform about the
duration of the interruptions that may have arisen at the facilities in PANGUE's
area of influence and an estimate of the outage, the day and the time it
occurred. This same report or another supplementary report shall explain the
causes of the irregularities.

SEVENTEEN: AVAILABILITY OF THE SYSTEM.

TRANSELEC commits itself to comply with such service quality standards as may be
established by the Electricity Law, the Electricity Regulations, the manuals and
procedures of the ELDC-CIS/CDEC - SIC, and the amendments or modifications of
these texts, which in no event shall lie under the historical standards existing
as of the date of this Contract, measured as the average of

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Contrato Peaje Basico PANGUE - TRANSELEC                                       9
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the Equivalent Interruption Time (TEI) ascribed to Internal Causes registered
during the period 1995 to 1999, as specified in TRANSELEC's annual report of
fiscal year 1999. The mean TEI from Internal Causes is 15.9 minutes.

In the event that a failure to comply with this index is detected for two
consecutive years, TRANSELEC shall contract an external technical auditor, who
designated by mutual agreement between the parties, shall present a diagnose and
recommendations on TRANSELEC's operational and maintenance practices. The
auditor's recommendations must necessarily be implemented by TRANSELEC.

EIGHTEEN: ARBITRATION.

Any difficulty that may arise between the parties relating to the purport,
fulfilment or breach, application, or termination of this Contract shall be
resolved by the Arbitral Tribunal constituted in accordance with Article 51 G of
Decree Law No. 1 of 1982 of the Ministry of Mining.

It is expressly established that if one of the parties refuses to designate or
delays the designation of the arbitrator whom it is responsible for appointing,
the other party may resort to the regular courts to proceed with the appointment
thereof. It shall be understood that a refusal or delay exists when the term of
twenty (20) days indicated in the third paragraph of above mentioned Article 51
G has passed and the party has not made such designation.

Likewise, the parties set forth that if the arbitrators do not agree on the
designation of the third arbitrator within the above mentioned term, such
designation shall be made by the Regular Courts of Justice of Santiago, in which
case the appointment must necessarily fall upon an attorney at law who has been
a member of the Supreme Court or the Court of Appeals of Santiago or Dean or
Director of the School of Legal and Social Sciences of the University of Chile
or of the Pontifical Catholic University of Chile.

Once arbitration is convened, the arbitrator must decide, as the first measure,
within a term of less than sixty days, the amount that must continue to be paid
provisionally, if appropriate, by PANGUE to TRANSELEC until such time as the
issue is ultimately resolved.

NINETEEN: LEGAL CAPACITIES.

The legal capacity of Mr. Rodrigo Naranjo Martorell to represent PANGUE is set
forth in the recorded public document dated June 7, 2000, drawn up before Mr.
Fernando Opazo Larrain, notary public of Santiago.

The legal capacity of Mr. Guillermo Espinosa Ihnen to represent TRANSELEC is set
forth in the recorded public document dated August 18, 1997, drawn up before Mr.
Ismael Ibarra Leniz, acting notary public of Santiago.

TWENTY: ANNEXES.

The Annexes to this Contract, four (4) in total, duly signed by the appearing
parties, are an integral part of this document for all contractual and legal
purposes.

TWENTY-ONE: NUMBER OF COPIES.

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Contrato Peaje Basico PANGUE - TRANSELEC                                      10
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This Contract is signed in four (4) original copies, two (2) of which are left
in the possession of each one of the parties.

         s/                                          s/

     Rodrigo Naranjo Martorell             Guillermo Espinosa Ihnen
          GENERAL MANAGER                       GENERAL MANAGER
              PANGUE                               TRANSELEC

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Contrato Peaje Basico PANGUE - TRANSELEC                                      11<PAGE>

                                                                  Exhibit 10.1.c

                              BASIC TOLL AGREEMENT
                                     BETWEEN
                        EMPRESA ELECTRICA PEHUENCHE S.A.
                                       AND
                 COMPANIA NACIONAL DE TRANSMISION ELECTRICA S.A.

In Santiago, Chile, on October 23, 2000, between EMPRESA ELECTRICA PEHUENCHE
S.A., hereinafter and indistinctly, PEHUENCHE, represented by its General
Manager, Mr. Lucio Castro Marquez, both domiciled in Santiago at Calle Santa
Rosa No. 76, Floor 15, and COMPANIA NACIONAL DE TRANSMISION ELECTRICA S.A.,
hereinafter and indistinctly referred to as TRANSELEC, represented by its
General Manager, Mr. Guillermo Espinosa Ihnen, both domiciled in Santiago at
Calle Santa Rosa No. 76, Floor 9, the following has been agreed:

ONE: PURPOSE.

The purpose of the present contract is to agree as to the basic toll annual
payments that PEHUENCHE is to pay to TRANSELEC for its power plants Pehuenche
(nominal power of 500.0 MW) and Loma Alta (nominal power of 38.0 MW),
hereinafter PEHUENCHE Power Plants, commencing from October 23, 2000.

The basic toll annual payments will entitle PEHUENCHE to upload up to the
maximum power and energy production capacity of the PEHUENCHE Power Plants,
which capacities are indicated in the preceding paragraph, to transmit it, and
to download energy and power by means of the facilities which form part of its
area of influence. PEHUENCHE shall exercise this right in accordance with such
provisions as the Economic Load Dispatch Center of the Central Interconnected
System (the CDEC-SIC) may impart for such purpose.

Likewise, such downloads without supplementary payments as PEHUENCHE may make in
the area of influence of each one of its power plants and at all of the
junctions from which, under normal operating conditions of the system, net
physical transmissions occur toward such area of influence, once it has paid the
basic toll, are limited to:

a)    The firm power of the power plant, plus such power as may have been
      contracted with third parties that have paid the basic and supplementary
      tolls necessary for reaching the point of download;

b)    The total capacity of the transmission system involved, without the
      existence of any priority or order of preference in this respect among all
      the power plants that pay the basic toll.

c)    At such limits as the CDEC-SIC may establish, in consideration of that
      provided for in Article 198 of the Regulations for the General Electrical
      Services Law approved by Supreme Decree No. 327 of the Ministry of Mining,
      dated December 12, 1997, hereinafter the Electricity Regulations.

TWO: THE AREA OF INFLUENCE

The parties agree that the area of influence of the PEHUENCHE Power Plants is
comprised of the segments that connect the upload buses of such power plants,
which, for the purposes of the present contract, correspond to Ancoa 220 kW,
with the basic energy sub-station of the Central Interconnected System, SIC. As
of the date of signing of the present contract, the basic energy sub-station
referred to corresponds to the Quillota sub-station of TRANSELEC, according to
the selection of basic energy sub-station contained in the setting of
semi-annual junction prices of April, 2000.

PEHUENCHE - TRANSELEC Basic Toll Contract                                      1
<PAGE>

In the event that, in future settings of junction prices, the basic energy
sub-station is selected at another junction of the system, the extent of the
area of influence of the PEHUENCHE Power Plants will be modified accordingly.
Such modification will govern commencing from the same month of the setting of
junction prices as the one when a change in the location of the basic energy
sub-station takes place.

Consistently with that indicated in the preceding paragraph, the parties agree
that, commencing from October 23, 2000, the area of influence of the PEHUENCHE
Power Plants is to be comprised of the segments indicated in Exhibit No. 1 of
the present contract .

THREE: ANRV + OMC

The parties agree that, during the period between October 23, 2000 and March 31,
2002, the values of the Annual Payment for New Replacement Values plus the Costs
of Operation and Maintenance (the ANRV + OMC ) for the facilities referred to
above, belonging to the area of influence of the PEHUENCHE Power Plants, are
those presented in Exhibit No. 1 to the present contract, expressed in thousands
of dollars of the United States of America on the date of January 1, 1999.

FOUR: PRO-RATA AMOUNTS

The parties agree that the pro-rata amounts for the PEHUENCHE Power Plants for
the period from October 23, 2000 to March 31, 2002 are those indicated in
Exhibit No. 2 to the present contract .

FIVE: DEFINITION OF THE NEW REPLACEMENT VALUE

For the purposes of the present contract , the New Replacement Value for the
transmission facilities, hereinafter, without distinction, NRV, will be
understood to mean the cost of renewing all of the works, facilities and
physical assets intended for the function of the transmission of electricity.

Renewal is understood to mean the activity of replacing the works, facilities
and physical assets presently in service with others that are equal. In the
event that they do not exist on the market, the respective cost is to be that of
the works, facilities and physical assets of modern technology, and current
cost, meant to fulfill the same function with the same standards of quality of
service. In the case of the transmission lines, those existing are considered
with respect to the topographical layout, structures, voltage, numbers of
circuits, and electrical transmission capacity. In the case of the sub-stations,
consideration is given, in addition to the primary control and protection
equipment, to the auxiliary equipment, including that of the auxiliary services,
battery banks and emergency equipment, buildings meant to house the equipment
indicated, pieces of land, and general works.

The costs associated with the NRV's for the transmission lines and for the
sub-stations which constitute the area of influence of the PEHUENCHE Power
Plants include the following items, which are set forth solely as examples, this
listing not being exhaustive: engineering and design, construction management
and inspection, easements and compensations, supply of imported and domestic
equipment and materials with the respective entry tariffs, port charges and
domestic and international freight, construction and assembly of works and
equipment, other financial and administrative costs such as staggered interest,
overhead expenses, and operating capital.

For purposes of the valuation of the lines, the original copper wire is replaced
by one of aluminum with equivalent characteristics. In the valuation of the
sub-stations, the switches for large volumes of oil, for compressed air, and for
large volumes of SF6 gas have been valuated as switches for small volumes of SF6
gas. The synchronous condensers are valuated as if they were static condensers.

PEHUENCHE - TRANSELEC Basic Toll Contract                                      2
<PAGE>

SIX: COSTS OF OPERATION AND MAINTENANCE

The costs of operation and maintenance (OMC) take into consideration all of the
costs necessary for the adequate maintenance of the facilities and their proper
decentralized operation subordinate to the Zone Operation Centers (ZOC) and to a
Centralized Transmission Dispatch.

The OMC's take into consideration the operating expenses intended for the
planning, execution and control of the activities of operation and maintenance,
whether the latter are preventative, scheduled corrective, or unscheduled
corrective, and the expenses and insurance for accidents to buildings and
facilities.

In addition, the OMC's include the costs of capital, of operation, and of
maintenance for the vehicles, for the maintenance equipment, for the
telecommunications systems, for the tools and for instruments necessary for
carrying out the activities of operation and maintenance, including the remote
terminal units (RTU), the Zone Operation Centers (ZOC), and the Centralized
Transmission Dispatch. Likewise, the OMC's include the costs of capital, of
operation, and of maintenance for the pieces of land and buildings, such as
workshops, offices, and warehouses meant for operation and maintenance.

SEVEN: BASIC TOLL ANNUAL PAYMENTS UP TO MARCH 31, 2002

The parties agree that, commencing on October 23, 2000, and up to March 31,
2002, under the category of the basic ANRV + OMC for its power plants, PEHUENCHE
will pay to TRANSELEC such amount as results from multiplying the sum of the
annual payment for the new replacement value (ANRV) and the costs of operation
and maintenance (OMC) for each one of the facilities of the area of influence of
the said power plants by the pro-rata amount corresponding to said power plants.

As a result of that indicated above, the parties agree that the basic toll
annual payments for the PEHUENCHE Power Plants for the period from October 23,
2000, and up to March 31, 2002, net of the value-added tax, which PEHUENCHE is
to pay to TRANSELEC, are those indicated in Table No. 1 below. These annual
payments, the calculation of which is indicated in Exhibit No. 3 to the present
contract , are expressed in dollars of the United States of America as of
January 1, 1999.

                                   Table No. 1
          ANRV + OMC for the PEHUENCHE Power Plants (basic ANRV + OMC )
                        Basic Energy Substation: Quillota
                 Period from October 23, 2000, to March 31, 2002
                Values in thousands of US $ as of January 1, 1999

     ---------------------------------------------------------------------------
         Power Plant                              PERIOD
     ---------------------------------------------------------------------------
                       October 23, 2000 up to March    April 1, 2001 up to March
                                 31, 2001                      31, 2002
     ---------------------------------------------------------------------------
     Pehuenche                   9,626.08                      9,564.34
     ---------------------------------------------------------------------------
     Loma Alta                     572.46                        578.31
     ---------------------------------------------------------------------------
                 TOTAL:         10,198.54                     10,142.65
     ---------------------------------------------------------------------------

The values contained in Table No. 1 above take into consideration that,
commencing from October 23, 2000 the area of influence of the PEHUENCHE Power
Plants extends from the download bus of the power plant up to the Quillota
sub-station of TRANSELEC.

PEHUENCHE - TRANSELEC Basic Toll Contract                                      3
<PAGE>

EIGHT: BASIC TOLL ANNUAL PAYMENTS COMMENCING FROM APRIL 1, 2002

Starting from April 1, 2002, and until the date when a modification of the
present basic toll contract may start to govern, arising as indicated in Article
TWELVE, the amount of the basic toll that PEHUENCHE will pay to TRANSELEC will
be calculated by considering the following for each one of the power plants
thereof:

a)    The facilities which comprise the area of influence thereof established by
      the Board of Directors of the CDEC - SIC in accordance with letter b) of
      Article 176 of the Electricity Regulations.

b)    The values of basic tolls per unit of firm power for each segment
      calculated by the Tolls Administration of the CDEC - SIC, in accordance
      with that provided for in letter h) of Article 182 of the Electricity
      Regulations. For such purposes the NRV's and OMC 's indicated in letter
      d), below, will be taken into consideration.

c)    The firm power calculated by the Operations Department of the CDEC - SIC
      in accordance with that indicated in letter f) of Article 181 of the
      Electricity Regulations.

      In the event that the CDEC - SIC has not calculated the firm power of the
      power plants of the SIC, the most recent values of firm power of the
      PEHUENCHE power plants which were in force on such date will be employed
      in a provisional manner.

d)    The New Replacement Values (NRV's) and the Costs of Operation and
      Maintenance (OMC's) published by TRANSELEC in the book of that name,
      edition of July, 1999, duly indexed according to the formulas contained in
      that publication.

e)    The calculation of the basic toll for PEHUENCHE will be made annually and
      the new value will take effect between the months of April of each year
      and March of the next year.

NINE: PAYMENT MODALITY.

The basic ANRV + OMC's will be paid in twelve monthly installments upon each
month due, equivalent to multiplying the value of the basic ANRV + OMC indicated
for each period and power plant in Table No. 1 above, or the basic tolls
resulting from applying that provided for in Article EIGHT, duly indexed
according to that provided for in Article TEN by the factor of 0.07974 (seven
thousand nine hundred seventy-four one-hundred-thousandths) and converted to
pesos of domestic currency employing the exchange rate corresponding to the
"observed dollar" referred to in the first paragraph of No. 6 of Chapter I,
Title I, of the Compendium of International Currency Exchange Rules published by
the Central Bank of Chile, or such as may replace it in the future, at the
average for the month corresponding to payment. The monthly payment thus
stipulated must contain a separate surcharge for the value-added tax, the V.A.T.

TRANSELEC will send the invoice within the first five (5) business days of the
month subsequent to the month to which the charge pertains. PEHUENCHE undertakes
to pay such invoice to the treasury of TRANSELEC in Santiago, in cash, by check,
not crossed, within the banking region of Santiago, or bank site draft, at
latest prior to noon on the sixteenth day of each month subsequent to the month
to which the charge pertains. If such day is a Saturday, Sunday or holiday, the
time due will extend up to noon on the subsequent business day.

Nevertheless, the parties may agree to a different method of payment, which may
be by a bank transfer of funds or deposits into any of the checking accounts of
TRANSELEC. In such case PEHUENCHE must inform TRANSELEC in writing as to the
date, amount, checking account

PEHUENCHE - TRANSELEC Basic Toll Contract                                      4
<PAGE>

number, and bank through which the payment or deposit has been made, as well as
the number of the invoice or invoices that it has paid.

In the case of default or simple delay in payment, interest will accrue at the
maximum contractual rate for transactions that are not adjustable of less than
or more than ninety (90) days, as the case may be, from the date when the
default or simple delay took place and up to the date of the actual payment
thereof.

In the event that TRANSELEC sends the invoice late, PEHUENCHE will be able to
postpone its payment by one day for each day of delay and such postponement will
not be deemed to be a default or simple delay for the purposes of charging the
interest referred to in the preceding paragraph.

TEN: INDEXING

The parties agree that the monthly payments pertaining to the basic toll annual
amounts for the PEHUENCHE Power Plants are to be indexed semi-annually on
January 1 and on July 1 of each year, multiplying the monthly payment in force
for the prior month by such factor as may result from applying the formula for
indexing tolls detailed in Exhibit No. 4 to the present document. For these
purposes, the said indexing factor will be deemed to be rounded off to the fifth
decimal.

The first indexing will take place on July 1, 2000 and will cover the period
between January 1, 1999 and June 30, 2000. The parties agree that the indexing
factors corresponding to the first and second semi-annual periods of 1999 and to
the first semi-annual period of 2000 are 0.95896, 0.94468 and 1.04100,
respectively.

Whenever a semi-annual indexing of tolls is applicable, TRANSELEC will prepare
and will send to PEHUENCHE a memorandum of calculation containing, in a detailed
and documented manner, the value of the new monthly payment. The sending of this
document must take place five (5) business days in advance of the date of
sending of the invoices corresponding to the months of January and July of each
year.

ELEVEN: SETTLEMENT OF THE VIRT's

The parties agree that they will carry out a monthly settlement, between
themselves, of the valuation of the uploads and downloads per segment (VIRT's)
for each one of the segments indicated in Article TWO generated by the balances
of uploads and downloads made by the CDEC - SIC for each one of the said
segments. The settlement indicated will be carried out during the month
subsequent to the month to which the settlement pertains, once TRANSELEC has
actually received such amounts from the rest of the members of the CDEC - SIC.
In the event that the CDEC - SIC has not determined the VIRT's or in the event
that TRANSELEC has not received all or part of the VIRT's from the rest of the
members of the CDEC - SIC, the parties may agree on provisional settlements
under this category, on account against final payment.

The amount to be paid for the settlement of the VIRT's will be equal to the VIRT
of each segment multiplied by the pro-rata amount for PEHUENCHE for such
segment. If the amount of the settlement corresponding to the entirety of the
segments indicated in Clause TWO proves to be greater than zero, TRANSELEC will
pay such amount to PEHUENCHE plus the value-added tax and, to the contrary, if
the amount of the total settlement proves to be less than zero, PEHUENCHE will
pay the absolute value of such amount, plus the value-added tax, to TRANSELEC.
For purposes of these settlements, if appropriate, the same interest rate as
that employed by the CDEC - SIC will be used.

PEHUENCHE - TRANSELEC Basic Toll Contract                                      5
<PAGE>

If in the period subsequent to March 30, 2002, such basic tolls as PEHUENCHE may
pay to TRANSELEC take consideration of the discount of the rate revenues
estimated by the Administration of Tolls of the CDEC - SIC, the latter will be
settled by readjustment between the parties in a monthly manner by applying that
provided for in the present article, but relating to the discounted rate
revenues values.

TWELVE: PERIOD OF EFFECTIVENESS

The present contract will have an unlimited period of effectiveness commencing
from October 23, 2000.

Notwithstanding that provided for in the previous paragraph, either of the
parties may request from the other party in writing, commencing from January 1,
2006, a partial or total revision of the contract.

Revision of the present contract must be anticipated if legal changes arise in
the Decree with Force of Law (Mining) (DFL - M) No. 1/82, at Articles 51, 51A to
51F thereof, in such manner as to adapt the contract to such legal changes.
Revision of the contract for this reason may be requested by either of the
parties and will take effect once the legal modifications enter into force.

Likewise, if the parties do not reach an agreement on the modifications to the
present contract arising from such general or partial revision as either of the
parties may request commencing from January 1, 2006, within a term of six months
from the date of receipt of such request, the parties agree to submit the
difference to the arbitration panel provided for in Article EIGHTEEN. The
contract will be modified under the terms decided by such arbitration panel.

In no case will a gap arise in the payments that PEHUENCHE makes to TRANSELEC.
In the event that methodological or regulatory absences of definition exist
deriving from legal modifications, the monthly payments will continue to be made
on the basis of the present contract in a provisional manner subject to adjusted
settlement until such time as such absences of definitions are resolved by
mutual agreement between the parties or in accordance with the procedure
established in Article EIGHTEEN.

The respective modification of the basic toll, whether arising by agreement of
the parties or by decision of the arbitration panel, will govern from the time
when the event causing such revision arises or enters into force, giving rise to
such monthly settlement readjustments as may pertain. The differences will be
paid, if appropriate, by such party as proves to be the debtor, with the
interest current for transactions that are not adjustable of more than or less
than 90 days, as may pertain, within a maximum term of 30 days subsequent to the
time when the contract arises or the arbitration award becomes executory.

THIRTEEN: REVISIONS OF THE BASIC TOLL

The parties agree that, in the period prior to March 31, 2002, the value of the
basic toll under the present contract can solely and exclusively be revised to
incorporate the effects caused by:

a)    The connection of new power plants to the SIC which are not included in
      the Work Plan considered for the calculation of the toll.
b)    Change in the direction of the flow toward the basic energy sub-station of
      the SIC under typical operating conditions.
c)    A failure to materialize, delays or accelerations in projects contemplated
      in the Work Plan considered in the calculation of the toll.
d)    An increase in the capacity of any of the PEHUENCHE Power Plants.
e)    Changes in the capacity of the existing power plants.

PEHUENCHE - TRANSELEC Basic Toll Contract                                      6
<PAGE>

f)    Disconnection, under the conditions indicated in Article 167 of the
      Electricity Regulations, or a change in the point of connection of the
      existing power plants.
g)    Modifications of the facilities of the area of influence of the PEHUENCHE
      Power Plants caused by addition or removal of TRANSELEC facilities.
h)    Acceleration or delay in the transmission works envisioned in the basic
      toll calculated.

For purposes of that provided for in the present article, reference is to be
made to the conditions employed in the application of the arbitration award
between PEHUENCHE / TRANSELEC - COLBUN dated January 20, 1999, contained in
Exhibit No. 1 to the report on the contract between TRANSELEC and COLBUN,
approved by that Court of Arbitration on the date of April 15, 1999. Exception
is made of the basic toll for the Taltal power plant, the calculation of which
has been done by employing the bases which are included in Exhibit No. 5 to the
present contract .

Revision because of any of the reasons indicated will commence by means of the
sending by the interested party to the other party of a written report
containing the technical and economic reasons justifying it. The addressee party
of the report will have a maximum term of 30 consecutive days to analyze and
respond to the report.

In the event that the indicated report is rejected, whether expressly or due to
the passage of the term of 30 days without the issuance of a response, it will
be deemed that a disagreement exists with respect to the modification proposed.
In such case the parties will seek to resolve the differences directly. If
another 30 days pass and an contract has not been reached, either of the parties
will be able to resort to the arbitration panel provided for in Article EIGHTEEN
in order to resolve the dispute.

The respective modification of the basic toll, whether arising from the contract
of the parties or from a decision of the Court of Arbitration, will govern from
the time when the event causing such revision arises or enters into force,
giving rise to such monthly settlement readjustments as may pertain. The
differences will be paid if appropriate, by such party as proves to be the
debtor, with the interest current for transactions that are not adjustable of
more than or less than 90 days, as may pertain, within a maximum term of 30 days
subsequent to the time when the contract arises or the arbitration award becomes
executory.

In no case will a gap arise in the payments that PEHUENCHE makes to TRANSELEC.
In the event that methodological or regulatory absences of definition exist
deriving from legal modifications, the monthly payments will continue to be made
on the basis of the present contract in a provisional manner subject to adjusted
settlement until such time as such absences of definitions are resolved by
mutual agreement between the parties or in accordance with the procedure
established in Article EIGHTEEN.

Any modification of the facilities which comprise the area of influence or the
pro-rata amounts of the PEHUENCHE Power Plants arising from a revision of the
toll provided for in the present article will, as a result, give rise to the
modification of Exhibit No. 1, Exhibit No. 2, or Exhibit No. 3, as may be
appropriate.

The parties agree that the procedure for revising the value of the basic toll
which they have agreed to in the present article will apply in serious cases
involving significant imbalances in the susceptibility of the contract to
commutation, that is, it will only be applied in instances where it is
ascertained that the economic effect of one or more of the causes defined in
letters a) to h) above, represents an increase or decrease of at least 5% (five
percent) of the value of the basic toll annual payment in force at the time when
the cause or causes giving rise to such revision took place. In order to
determine the percentage of the increase or decrease in the annual payment
indicated, the number of power plants and their diversity in terms of
geographical location have been taken into account.

PEHUENCHE - TRANSELEC Basic Toll Contract                                      7
<PAGE>

That set forth in the present article notwithstanding, in the event that, in
future settings of junction prices, selection is made of a basic energy
sub-station at another junction of the system, the extent of the area of
influence for the PEHUENCHE Power Plants will be modified accordingly, pursuant
to that provided for in Article TWO of the present contract .

FORTEEN: LIABILITIES

The liabilities of the contracting parties will correspond to those defined in
Decree with Force of Law No. 1 of 1982 of the Ministry of Mining, hereinafter
the Electricity Law, the Electricity Regulations, the manuals and procedures of
the CDEC - SIC, and the modifications or changes of the mentioned legal sources.

TRANSELEC will at no time be liable for such damages or losses as PEHUENCHE may
suffer due to a total or partial lack of supply of electrical energy and power,
excessive variations in voltage or frequency, or others, caused by technical
failures which may affect the facilities of the Transmission System of TRANSELEC
(SIT), or due to any other event that may interrupt, paralyze, or disturb
transmissions of energy or power at the facilities of the area of influence of
the PEHUENCHE Power Plants caused by an act of God or force majeure and, the
listing which follows not being exhaustive, the following: damage caused by
natural phenomena, telluric phenomena, lightning, storms, falling trees, floods,
and inundations, among others.

On its part, PEHUENCHE will in no case be liable for such losses as TRANSELEC
may suffer due to technical failures or any other event which may interrupt,
paralyze, or disturb the generating or transmission of energy and power at the
PEHUENCHE Power Plants caused by an act of God or force majeure. Among other
things, an act of God or force majeure will be deemed to be the occurrence of a
prolonged drought that impedes the normal generating of energy.

FIFTEEN: SUSPENSION OF SERVICE

TRANSELEC may suspend the transmission of energy and power for purposes of
scheduled modification or maintenance work. Such suspensions will be planned and
scheduled by TRANSELEC upon hearing the opinions on this subject from the
various generating companies affected by such interruption in supply. Such
suspensions must be communicated by TRANSELEC to PEHUENCHE in writing at least
sixty (60) days in advance.

The suspensions of service will be governed by the Electricity Law, by the
Electricity Regulations, and by the rules and regulations of the CDEC - SIC.

TRANSELEC may also suspend the transmission of energy and power for purposes of
emergency repairs. Such suspensions will take place with the giving of notice to
PEHUENCHE as far in advance as the circumstances permit.

SIXTEEN: INFORMATION ON OPERATION

TRANSELEC undertakes to send to PEHUENCHE, each time that events occur affecting
the normal functioning of the transmission facilities of the area of influence
of the PEHUENCHE Power Plants, a report in which it will set forth the
irregularities and/or the interruptions in service occurring at such facilities,
prior to 12:00 a.m. on the day subsequent to the occurrence of the event. In the
mentioned report there will be indication of the durations of the interruptions
that may have arisen at the facilities in the area of influence of the PEHUENCHE
Power Plants and an estimate of the energy interrupted through such facilities,
the day and the time when it occurred. In this same report or in another
supplementary report the causes of the irregularities will be indicated.

SEVENTEEN: AVAILABILITY OF THE SYSTEM

PEHUENCHE - TRANSELEC Basic Toll Contract                                      8
<PAGE>

TRANSELEC undertakes to comply with such service quality standards as may be
established by the Electricity Law, the Electricity Regulations, the manuals and
procedures of the CDEC - SIC, and the modifications or changes in the mentioned
texts, which in no event will be lower than the historical standards existing as
of the date of this contract , measured as the average of the Equivalent
Interruption Time (TEI) from Internal Causes registered for the years 1995 to
1999 as specified in the annual report from TRANSELEC pertaining to the year
1999. Such average TEI from Internal Causes amounts to 15.9 minutes.

In the event that a failure to comply with this index is detected for two
consecutive years, TRANSELEC undertakes to hire an outside technical auditor
designated by mutual agreement between the parties, which will make a diagnosis
and recommendations on the operational and maintenance practices followed by
TRANSELEC. The recommendations issued by the auditor must necessarily be
implemented by TRANSELEC.

EIGHTEEN: ARBITRATION

Any problem that may arise between the parties relating to the interpretation,
performance or breach, application, or termination of the present contract will
be resolved by the Court of Arbitration constituted in accordance with that
indicated in Article 51 G of Decree with Force of Law No. 1 of 1982 of the
Ministry of Mining.

It is expressly established that, if one of the parties refuses to designate or
delays in the designation of the arbitrator whom it is responsible for
appointing, the other party may resort to the regular courts to proceed with the
appointment thereof. It will be understood that a refusal or delay exists when
the term of twenty (20) days indicated in the third paragraph of the mentioned
Article 51 G has passed and the party has not made such designation.

Likewise, the parties set forth that if the arbitrators do not agree on the
designation of the third arbitrator within the same term as that referred to
above, such designation will be made by the Regular Court of Justice of the
Borough of Santiago, in which case the appointment shall necessarily fall upon
an attorney at law who has been a member of the Supreme Court or the Court of
Appeals of Santiago or Dean or Director of the School of Law of the University
of Chile or of the Catholic University of Chile.

Once arbitration is convened, the arbitrator must decide, as the first remedy,
within a term less than sixty days, the amount that must continue to be paid, if
appropriate, by PEHUENCHE to TRANSELEC provisionally, until such time as the
dispute is finally resolved.

NINETEEN: LEGAL CAPACITIES

The legal capacity of Mr. Lucio Castro Marquez to represent PEHUENCHE is set
forth in the public deed dated November 2, 1999 executed before the Notary
Public for Santiago Mr. Fernando Opazo Larrain.

The legal capacity of Mr. Guillermo Espinosa Ihnen to represent TRANSELEC is set
forth in the public deed dated August 18, 1997 executed before the acting notary
public for Santiago Mr. Ismael Ibarra Leniz.

TWENTY: EXHIBITS

The exhibits to this contract , four (4) in total, duly signed by the appearing
parties, form an integral part of this document for all contractual and legal
purposes.

PEHUENCHE - TRANSELEC Basic Toll Contract                                      9
<PAGE>

TWENTY-ONE: NUMBER OF COUNTERPARTS

The present contract is signed in four (4) counterparts, two (2) of which are
left in the possession of each one of the parties.

s/                                        s/
Lucio Castro Marquez                      Guillermo Espinosa Ihnen
GENERAL MANAGER                           GENERAL MANAGER
PEHUENCHE                                 TRANSELEC

PEHUENCHE - TRANSELEC Basic Toll Contract                                     10

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