SECRET
XCS(73)8
8
Furthermore, one of the proposals (Annex C) comes reasonably close to being viable in that, despite relatively less favourable export credit terms, the cumulative debt by the year 2000 is comparatively small and should be liquidated within the year 2002.
Consideration of Approach to be Adopted
13
A decision has to be taken now on whether the single- contract approach or the multi-contract approach should be adopted. This question was discussed in paragraphs 21 - 27 of memorandum XCC(73)10 at Annex A, and the probable advantages and disadvantages of these two approaches, as seen at that stage and in general terms, may be summarised as follows:
Single-contract
Factor
Amount of export credit finance
Maximum possible
Export credit terms
Best possible
Likely price of the
project
Likely date of
commencement of construction
Overall period of
construction
Co-ordination and
management
required of
the Corporation
Probably higher
(because compe- tition would be limited)
Might be delayed
by as much as 12 months (because of the time required for concluding the contract)
Shortest possible
Multi-contract
Likely to be relatively
low
Could be less favourable (but depends on degree of fragmentation)
Probably the most
competitive
Earliest possible
Longer
Relatively less
Maximum
Flexibility
Very little
Maximum
14
This broad assessment of the two approaches remains generally valid, but it did not take into account two fundamental considerations which have now become clear. In the first place, the price-sensitivity of the system's financial viability, as described in paragraph 12 above, is such that there is a need to limit uncertainty as to the contract price and, to a lesser extent, the amount and terms of export credits. In fact, having regard to the cash-flow table at Annexes B E, the financial viability of the system would be assured only if the final contract price, after
C
SECRET