EXPORT CREDIT
7.1
The Letter of Intent with the Japanese Consortium referred to financial arrangements comprising approximately 57% of the contract value with interest at 7% p.a., a repayment period of 18 to 19 years and part capitalisation of interest over the same repayment period. These terms were never realised but nonetheless were used in the original calculation demonstrating the viabi- lity of the proposed initial system, and the likelihood that the Japanese Consortium would have been unable to realise their indicated financial terms is of little consolation.
7.2
7.3
7.4
For the purpose of calculating viability of the proposed modified initial system, it has been accepted that financial terms now available will certainly be less advantageous than formerly. Finance comprising 40% of the total contract price has been assumed with a repayment period of 7 years from completion and interest at 8% - the balance other than the equity contribution being raised in the international finance markets.
International contractors generally are tending to be short of work at the present time following the slow-down in investment over the last twelve
months or so. This more competitive position might allow more advantageous terms than anti- cipated, but it will be possible to obtain firmer indications of the finance that will be available before any contracts are placed in mid 75.
This
It is likely that a multi-contract arrangements will result in financial terms marginally inferior to those available for a single contract. disadvantage does not offset the greater advantage of the anticipated earlier completion under a multi-contract arrangement, particularly as there are many substantial contracts available as part of this arrangement which will themselves attract financial terms as good as are available at the present time.
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