TNAG-0424-FCO40-470-Construction-of-an-underground-railway-system-in-Hong-Kong-1973 — Page 234

CONFIDENTIAL

XCC(73) 10

25

16

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Assessments made by various proposers or by the storia Consulting Engineers have indicated that the proportion of export

credit finance likely to be available for the first four stages would be as follows:

% of total cost

covered by

export credit finance

Single contract

68%

About 15 large contracts About 60 small contracts

53%

46%

Assuming that:

(a)

(b)

(c)

the additional finance required over and above export credits would cost 2,5% more in interest per annum;

on small contracts (but not on large ones) the cost of export credits would be 0.5% more per annum than that payable by consortia;

the extra cost of hiring good project managers would be no more than 1. 5% of the total capital cost of the project,

the margin required to equate the overall price under the multi-contract approach with that charged by a consortium would be as follows (expressed as a percentage of the estimated capital cost of approximately $3,500 million for the first four stages):

(i)

Assuming 2.5% additional interest annually on 15% of total capital costs (in the case of large contracts) or on 22% of total capital costs (in the case of small contracts)

Assuming an extra 0.5%

For Large For Small

Contracts

Contracts

3.75%

5.25%

(ii)

p. a. interest on export

credits for small

contracts

Nil

1.75%

(iii)

Estimated cost of project management

1.50%

1.50%

Total

5.25%

8.50%

CONFIDENTIAL

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密