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I have only error seen the UTL_FILE.READ_ERROR as a result of improper configuration. It is an oracle package error. What is the RDBMS release running the MW tool?
This error is generated when the file permissions or owner are incorrect. I have logged a bug to have the entire 11i Pre-Upgrade Patching section removed. The patches being merged and applied are applied again later in the functional steps so that section is really not necessary.