XN000022-1990-10-05 — Page 4

3

ليها

FRIDAY, OCTOBER 5, 1990

OF

"THE CONSTRUCTION CONTRACT APPROACH PROVIDES CERTAINTY IN TERMS TO PLANNING, COMPLETION AND OPERATION, AND FURTHERMORE ALLOWS

AHEAD OF A BUILD-OPERATE-

CONSTRUCTION SIX START TRANSFER OPTION."

TO NINE MONTHS

CONSORTIA HAD

SIR DAVID SAID THAT A NUMBER OF INTERNATIONAL

DESPITE THIS, THE GOVERNMENT EXPRESSED INTEREST IN THE BOT OPTION.

BECAUSE IT HAD DECIDED TO OPT FOR A CONSTRUCTION CONTRACT APPROACH REPRESENTED BETTER VALUE FOR MONEY AND, BY AVOIDING NEGOTIATIONS LIKELY OVER A BOT TENDER, WOULD ENABLE AN EARLIER START.

THE PROTRACTED

CONSIDERABLE "HAVING STUDIED ALL ASPECTS VERY CAREFULLY OVER A PERIOD, WE HAVE CONCLUDED THAT THERE IS A GREATER ADVANTAGE IN FUNDING THE PROJECT OURSELVES. BUT CLEARLY WE WOULD ALSO WISH TO CONSIDER TENDER FINANCIAL PACKAGES PUT FORWARD IN RESPONSE TO THE CONSTRUCTION EXERCISE.

"WE HAVE NO DOUBT THAT THE TENDER WILL ATTRACT A LARGER OF WELL-QUALIFIED CONTRACTORS, AND THAT THE ADDED RESULT IN A VERY KEEN PRICE FOR THE BRIDGE."

COMPETITION

NUMBER WILL

SIR DAVID SAID THE CONSTRUCTION CONTRACT APPROACH ALSO OPENS UP STAGE, ANOTHER ATTRACTIVE OPTION FOR FINANCING THE PROJECT AT A LATER THAT IS TO CALL FOR COMPETITIVE BIDS FOR THE FRANCHISE TO OPERATE BRIDGE AFTER IT IS COMPLETED.

THE

THE

"OUR VIEW IS THAT SUCH A FRANCHISE WOULD BE ATTRACTIVE AND

COST OF PROCEEDS FROM THE TENDER EXERCISE COULD AT LEAST MATCH THE CONSTRUCTION.

"WE HAVE TOTAL CONFIDENCE

IN

THE

PROJECT'S

LONG-TERM

VIABILITY.

SIR DAVID EXPLAINED THAT IF THE PROJECT WERE TO BE TENDERED A BOT BASIS, THE BIDDERS WOULD BASE THEIR JUDGEMENT OF ITS ON THREE MAIN FACTORS: THE COST OF CONSTRUCTION, THE REVENUE WHICH

TOLLS, AND THE TURN DEPENDS ON TRAFFIC FORECASTS AND THE LEVEL OF PERCEIVED RISKS INVOLVED.

ON

VIABILITY

IN

OF CERTAINTY "WE ARE ADVISED THAT THERE CAN BE A HIGH DEGREE

NOT OVER THE COST OF CONSTRUCTION, BUT THAT PROSPECTIVE BIDDERS MIGHT

ΤΟ THE OTHER TWO HAVE THE SAME DEGREE OF CONFIDENCE WITH REGARD FACTORS.

"THE CONTINUING CRISIS IN THE GULF AND SITUATION HAVE NOT HELPED THE COMMERCIAL CLIMATE.

THE WORLD ECONOMIC

WORD "DESPITE THESE PERCEIVED UNCERTAINTIES, AND I STRESS THE

UNFOUNDED, WE *PERCEIVED BECAUSE WE BELIEVE THAT SOME OF THEM ARE HAVE NO DOUBT THAT THERE WOULD HAVE BEEN A SUBSTANTIAL RESPONSE TO OUR CALL FOR BOT BIDS.

"BUT THE COMMERCIAL WORLD WORKS ON THE PRINCIPLE OF 'THE HIGHER RESULT THAT THE THE RISK THE GREATER THE REWARD' WITH THE LIKELY

SUPPORT PROJECT WOULD HAVE BECOME MORE COSTLY IN TERMS OF GOVERNMENT THAN WE BELIEVE TO BE JUSTIFIED.

/"IT WOULD