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)
(b)
(c)
(a)
Chater Station and the line from Chater to Admiralty have not been included;
the Group propose to construct certain sections by cut-and- cover, rather than by bored tunnel as indicated by the Consulting Engineers;
the Group have based their estimates on construction methods which, in some cases, would require considerably more working room than that proposed by the Consulting Engineers; and
a number of minor cost items have been omitted.
The Group's price estimates include the costs of construction and equipment of Stages 1-4 and of project management and contract and credit insurance. Notional figures have also been included for contingencies. However, the estimates do not include provision for unforeseen circumstances and cost escalation. In addition, the civil engineering sub-group do not propose to undertake the detailed design of the civil works involved, but intend to leave this work to the client's Consulting Engineers.
(c) Provisions for price variations
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All prices would be subject to escalation in accordance with agreed formulae to be included in the contract. (The Group have proposed details of a formula for calculating cost escalation on E & M supplies, but have not yet done so in respect of civil works). Price adjustments would also be made in cases of 'force majeure' as defined in the FIDIC conditions of contract.
(d) Payment Terms
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The Group have provided estimates regarding the pattern of expenditure over the construction period.
Export Credits/Consortium Finance
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The Group have offered to provide export credits backed by the Export Credit Guarantee Department (ECGD), on the following terms:
(a)
(b)
(c)
Amount: equivalent to 100% of the value of UK goods and services supplied, estimated at about 62% of the total contract price.
Drawdown: spread over six years in accordance with the pattern of expenditure over the proposed construction period. Interest and charges: interest would be charged at 6% per annum. In addition, a commitment commission of 1% flat and a negotiation commission of 0.1% flat, both calculated on the total amount of the credit, would be payable once-for- all. A management commission of 0.05% per annum on the total amount of the credit would also be payable over the entire life of the credit.
(d) Repayment: in 24 consecutive semi-annual instalments
commencing six months after the completion of construction.
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/.... (e)