0003160 G.F. 316
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(b) Coverage of price estimates
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The estimates are based largely on the Consulting Engineers' design, but differ from it to the extent that:
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(a) air-conditioning at stations has not been provided;
(b)
(c)
the consortium propose to construct the Prince Edward/ Argyle and Argyle/Prince Edward sections by cut-and-cover, rather than by bored tunnel as indicated by the Consulting Engineers; (however, if ground conditions were favourable, the consortium could construct these sections by bored tunnel at approximately the same cost);
in some cases, the consortium propose to use an alternative cut-and-cover method to that indicated by the Consulting Engineers; (this alternative method would involve providing a lesser standard of temporary support for the foundations of adjacent buildings); and
(a) a number of minor cost items have been omitted.
The consortium's price estimates include the costs of the detailed design, construction and equipment of Stages 1-4 and of project management and contract insurance. They do not include contingencies (except for a small amount in the E & M estimates), unforeseen circumstances and cost escalation.
(c)
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Provisions for price variations
All unit rates and prices would be subject to remeasurement.
In addition, the consortium have:
(a) suggested detailed formulae, involving the use of a series
of price indices to be mutually agreed and written into the contract, for calculating cost escalation; and
(b)
assumed that price adjustments would be made in cases of 'force majeure' (e.g. Acts of God, change of status of the client's country, sudden economic changes, etc) to be defined in the contract.
(d) Payment terms
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Bills would be presented monthly for settlement in respect of work completed or expenses incurred in manufacture. Payments, once made, would not be subject to further escalation. (Estimates regarding the pattern of expenditure over the construction period have been provided).
Export Credits/Consortium Finance
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The consortium have offered to provide credit finance on the following terms:
(a)
Amount: estimated at $2,157 mn (or 65.9% of the estimated contract price of $3,270 mn, see paragraph 6 above). The percentage figure would be maintained to cover cost escalation.
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/.... (b)