CONFIDENTIAL
21982
1
TO THE LOAN DISBURSEMENTS WHICH ARE PROPERLY COVERED
IN THE LOAN AGREEMENT.
1.20
PROVIDED THIS DOES NOT AFFECT THE FULL FORCE
OF THE QUALIFYING CERTIFICATE WE COULD AGREE TO THE
ENDORSEMENT BY THE BOC OF QUALIFYING CERTIFICATES IN
RESPECT OF LOAN FINANCE CHARGES AND OF DISBURSEMENT
CLAIMS FOR TERMINATION COSTS WHERE SUCH COSTS ARE
MUTUALLY AGREED. HOWEVER, THIS WOULD BE QUITE INAPPROPRIATE FOR ANY TERMINATION COSTS OR ANY OTHER
COSTS SETTLED BY ARBITRATION AWARD, WHERE THE
ARBITRATOR'S DECISION MUST REMAIN FINAL.
THE LOAN AGREEMENT SPECIFIES HOW INTEREST IS PAID AND
NO ADDITIONAL AUTHORISATION PROCEDURES ARE APPROPRIATE.
1. 3
WE UNDERSTAND THERE IS NO CONFLICT IN
PRINCIPLE BETWEEN GEC AND THE JVC.
BALANCE OF PLANT AND ELIGIBLE LOCAL COST PROCEDURES
2.2.1
A
(BALANCE OF PLANT) TO DEMONSTRATE OUR
FLEXIBILITY WE WOULD BE PREPARED TO DISPENSE WITH GEC'S
AGENCY ROLE AND THEIR HANDLING CHARGES. TO DO THIS,
AND ALSO TO APPROXIMATE TO THE FRENCH METHOD OF
OPERATION, ECGD WOULD BE PREPARED IF THE BANK OF CHINA
WISHED IT TO CONVERT THE LOAN FROM A SINGLE CONTRACT
BASIS TO A PROJECT LINE OF CREDIT, THUS PERMITTING
DIRECT FINANCING OF BOP CONTRACTS. THIS IS ON THE
UNDERSTANDING THAT, AS STATED IN ATTACHMENT 4 TO THE MOU
BETWEEN HMG AND BOC, 5 PER CENT OF THE CONTRACT PRICE OF
SUCH CONTRACTS WILL BE PAID INTO A TRUST ACCOUNT. THIS
WOULD INVOLVE SUBSTANTIAL CHANGES IN THE DRAFT
DOCUMENTATION ALREADY SHOWN TO THE BANK OF CHINA,
RESULTING IN A CONSIDERABLE INCREASE IN ADMINISTRATIVE
COST FOR THE MIDLAND BANK FOR WHICH IT WOULD BE REASONABLE
3
CONFIDENTIAL