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MR BLAKE: I WOULD LIKE TO ASK A QUESTION IN CHINESE.
NOW THE BID OF
E ANGLO-JAPANESE IS $7.144 BILLION COMPARED WITH $4.71 BILLION IT IS MUCH HIGHER, SO ARE WE PAYING A HIGH PRICE FOR THE SAME THING? THIS IS THE FIRST QUESTION.
MR YEUNG: CAN YOU STOP FOR A MOMENT - WE CAN'T REMEMBER ALL THE QUESTIONS.
THE QUESTIONS SHOULD BE SINGLE-BARRELLED ONES BECAUSE IF YOU DON'T, YOU ARE DEPRIVING ALL YOUR COLLEAGUES OF A CHANCE TO ASK QUESTIONS, AND SECONDLY, WE MAY MISS YOUR SECOND OR THIRD BARRELS. NOW THE ANSWER TO THAT QUESTION IS, NO. ALTHOUGH THERE IS A DIFFERENCE BETWEEN THE $4.71 BILLION TENDER AND THE $7.144 BILLION TENDER IT'S QUITE SUBSTANTIAL AS YOU SAID, THE DIFFERENCE IS $2.3 BILLION WE ARE NOT TALKING ABOUT THE SAME QUALITY NOR ARE WE TALKING ABOUT THE SAME LIKELIHOOD OF DELIVERY ON TIME. THAT IS THE SHORT ANSWER TO THE QUESTION.
Q: MR YEUNG, COULD YOU JUST ELABORATE A BIT ABOUT THIS DIFFERENCE IN QUALITY THAT YOU MENTIONED?
MR YEUNG: I WILL ASK MR BLAKE TO DO SO, BUT IT HAS A LOT TO DO WITH THE LIKELIHOOD OF COMPLETION ON TIME.
MR BLAKE: YES, INDEED, THE OVERALL BID FROM HYUNDAI WAS LOW COMPARED WITH OUR OWN ESTIMATE AND ALSO COMPARED WITH BOTH ANGLO-JAPANESE AND THE HIC GROUP. ANGLO-JAPANESE AND HIC ARE VERY
ARE VERY EXPERIENCED, THEREFORE THERE BID MARKER SHOULD BE CONSIDERED IN THAT LIGHT. IN TERMS OF DELIVERY, THE LOW BID FROM HYUNDAI WAS EXAMINED BY THE TECHNICAL ASSESSMENT TEAM IN GREAT DETAIL. WE UNDERSTAND THAT THEY HAVE PUT, TO BID TOGETHER, A LOW BID IN A WAY WHICH WHILST IT ENABLES THEM TO COMPLETE THE WORKS WOULD UNDULY RISK COMPLETION IN TERMS OF TIME, AND IF THERE IS PRESSURE BROUGHT TO BEAR, DURING THE CONTRACT, ON COMPLETION, ASPECTS OF THEIR WORK COULD WELL BEGIN TO BE UNDER UNDUE PRESSURE AND THEREFORE QUALITY WOULD BE AT RISK. SO AS THE SECRETARY FOR TREASURY HAS SAID, ONE MUST AT ALL TIMES KEEP IN BALANCE THIS COST, TIME
TIME AND QUALITY ASPECT. IF THE BALANCE GOES TOWARDS PRICE, THEN OTHER ELEMENTS TIME AND QUALITY - WILL SUFFER.
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Q: IF I COULD ASK YOU TO GO BACK FOR A MOMENT TO THE SUBJECT OF HYUNDAI'S SHORTFALL. IN THE INTERESTS OF TRANSPARENCY, COULD YOU SAVE A LOT OF PEOPLE HERE A LOT OF TIME BY TELLING US THE EXTENT, IN TERMS OF PERCENTAGE, THAT HYUNDAI FELL SHORT IN TERMS OF CAPITAL, IN TERMS OF THE WORKING AND ENLARGED CAPITAL THRESHOLDS?
MR YEUNG: YES, WE CAN. MR BLAKE IS LOOKING FOR THE FIGURES NOW. BASICALLY, THE FINANCIAL CRITERION WE REQUIRE OF A CONTRACT AS LARGE AS THIS IS THAT THE CAPITALISATION SHOULD BE NO LESS THAN SIX PERCENT OF THE AGGREGATE VALUE OF ALL CONTRACTS IN HAND.
MR BLAKE: THE CALCULATIONS THAT WE DID, INDICATED THAT THERE WAS, TAKING INTO ACCOUNT THE POSSIBLE INCOME FROM VARIOUS TRANSACTIONS PUT FORWARD BY HYUNDAI, AND VARIOUS RECOVERABLES, AT THE END OF THE TIME THERE WAS STILL A SHORTFALL IN WORKING CAPITAL OF US$303 DOLLARS, AND EMPLOYED CAPITAL OF US$90 MILLION.
Q: HOW MUCH IS THAT PERCENTAGE-WISE, FROM THE TOTAL THAT WAS REQUIRED OF THEM? IS $303 MILLION A LOT IN THIS CONTEXT?
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