generated sooner resulting in a better cash flow profile,
improved profitability and savings in interest on borrowings.
The savings in time arise in the following ways:
(a)
(b)
Tendering a direct negotiated contract removes the
need for the lengthy period required under the multiple
tender system for the preparation of tender documents,
for the submission of tenders by the contractors and for
tender adjudication;
Construction
-
a single negotiated contract allows the
contractor to overlap the design and construction phases,
thus enabling an immediate start to be made on preliminary
site work without the need to wait for all detailed design
work to be completed;
(c) Procurement
-
items of equipment which have a long lead
time can be identified in advance and orders placed before
the detailed design stage is completed.
FINANCE
A negotiated turnkey contract offers a client the best opportunity
for securing an effective and comprehensive financial package,
negotiated on the best available terms. There are three main
aspects to this:
(a) Contractual
-
a single contract covered by a single financial
package allows close harmonisation to be achieved between the
related contractual and financial agreements;
(b) Risk under a single contract, a client can avoid taking
responsibility for the risks, inherent in multiple contracts,
arising from the difficulty of phasing in items of equipment
supplied under separate and independent contracts. Placing
such a responsibility upon a single contractor also allows him
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