TNAG-1175-FCO40-1477-Proposed-replacement-airport-for-Hong-Kong-at-Deep-Bay-or-Ch-1982 — Page 77

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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