Vol 5 Chapter 56: ,beat

After listening to Lancelot, Beshir Ivanov’s cold sweat was coming out. There is no problem with cost accounting errors, but if the error exceeds 20%, we must investigate the cause. If the gap of multiple times is confirmed, then this is a very serious administrative accident.
If it is an ordinary time and a mistake occurs, as long as it is corrected in time, it is not a big deal. But this time is different. Who will fill the huge pit with a difference of more than 60 billion?
Fortunately, this is before winning the bid. If after winning the bid, the winning bidder can use this evaluation report to touch the porcelain, and directly pay all the construction costs and management expenses, and let the Ministry of Transport help the construction. It is estimated that the Ministry of Transport will be It's dead!
Of course, this kind of thing cannot happen in Bulgaria. After touching the government's porcelain, still want to have a good life?
What Bashir worries now is that these two companies are scared off by this cost. What should be done later? He, the Minister of Transportation, is in big trouble!
After a moment of silence, Smith said: "Our Bulgarian Highway Construction Company has limited financial strength and cannot afford this investment of more than 120 billion lev!"
Following Howell, he also said: "It is a pity that the investment of more than 120 billion lev is too big. Even if it is divided into ten years, it will cost 12 billion lev every year. We Bulgaria The Highway Group Company does not have the strength to independently undertake this investment!"
The two of them didn’t even say to quit. This is undoubtedly good news. Bessier knows that the shareholders behind the two companies are all beneficiaries of this plan. Will support this plan!
Beshir asked, "I think you two have any ideas. Regarding the issue of cost accounting, our government and your company's technicians can re-survey and determine the new project cost. It will take some time.
However, if you want to continue to build this project, you will still be responsible for the final investment cost, but the government will give you some support based on the actual situation! "
Smith hesitated and said: "I'm sorry, Mr. Beshir's investment of more than 120 billion levs has far exceeded our budget, and the Bulgarian highway alone cannot support this expenditure.
At the same time, the issue of profitability is also a trouble. According to the government's plan this time, non-luxury vehicles can't make huge profits from using oil. What really belongs to our profit point is family cars.
According to Bulgaria's economic development, the project will be fully completed in ten years, and the country's car ownership will be between 2 million and 3 million.
Then the annual revenue may not be enough to pay the bank's interest. If we include operating costs, maintenance costs, and capital time costs, our annual loss will be as high as 5 billion to 8 billion levs.
Even after 20 years, our domestic car holdings have doubled, and we are still at a loss, and we have to add the interest owed in the previous 20 years. The economic experts of our group told me that we are losing money. The number will be even bigger!
This continues to accumulate, and I doubt that this project has any days to pay off the bank interest! Of course, banks do not dare to lend such unlimited loans, they also have to consider the safety of depositors' funds! "
Howell immediately retorted: "No! Mr. Smith, you are too pessimistic. In theory, as long as the country's car ownership reaches 20 million, and the average fuel cost per car exceeds 1,500 levs, If we calculate on the basis of a doubled oil price, then there will be a gross profit of 1.5 billion levs, which can basically achieve a balance of payments!
Of course, the prerequisite is to reach this standard within 20 years, otherwise the accumulated capital cost will exceed our imagination! "
After hearing Howell's explanation, everyone shook their heads speechlessly, thinking they still said that Smith was pessimistic, don't you think your statement is more pessimistic than Smith?
Bulgaria has a population of just over 40 million and needs to own 20 million cars. Doesn't this mean that everyone who can drive a car is a car?
Is this possible? Every household has a car. In history, when the Americans reached the peak of the economy in 1929, the country's car ownership was only 5.33 million!
It was not until the 1990s that North America and Europe reached the standard of 500 cars per 1,000 people. In this era, the popularization of cars is simply not feasible!
Even if the car is given to the people for free, their income cannot afford to support a car. The average annual income of Bulgaria is only more than 1,200 levs. Let them pay 1,500 levs for gas. Isn't it nonsense?
Bashir knew that today’s negotiations could not continue. Unless the cost can be lowered, or some sections with low traffic volume can be deleted, the plan will simply not proceed!
"Okay, two! I understand what you mean, so we will postpone the meeting first, and we will continue to negotiate when the final cost is calculated!
But before I once again I want to ask you a question, what is the highest construction cost you can afford? This is related to our next negotiation, please answer carefully! "
Smith answered without hesitation: "The bottom line of the company is the maximum total investment, which cannot exceed 65 billion lev!"
Howell thought for a while and said: "Our bottom line is similar to them, even if it is 65 billion Levs!
Of course, if the government's final assessment price is lower than 100 billion levs, we are willing to invest in the commission to build it, and it will be calculated at 100 billion lev! "
As soon as he finished speaking, the reporters below all applauded. These words are very domineering, almost announcing the cost of this project, which cannot be less than 100 billion lev!
As for whether the Bulgarian government will undertake the construction, everyone knows that this is impossible. Where does the extra funding gap come from?
This is not a small number, but it is tens of billions of levs. Even if the Ministry of Finance has money, it is impossible for the Ministry of Transport to use such a large sum of money to fill the hole!
The first day of the meeting was so abandoned, and the subsequent meetings were postponed indefinitely. Compared with Beshir's worries, the reporters are happy. This is undoubtedly big news!
Soon the eyes of the world will turn to Bulgaria again. If the government fails to properly handle this issue, it will become the biggest joke of the century!
At the end of the meeting, Bashir hurried to the palace with the experts and materials. What if such a big incident happened without giving an account?
Although Ferdinand knew that this problem would happen, he still didn't come out to stop it. It is also very necessary to take the opportunity to beat the cabinet, otherwise it will be difficult to bring the team together after a long time and people become ambitious!
So Ferdinand pretended not to know anything, and waited for the cabinet meeting to be held in the palace, waiting for them to come and be criticized!
...
Ferdinand looked at the restless people with a green face. In fact, he was already happy. As a cabinet in charge of the Bulgarian government for more than 20 years, his prestige has long been high in the sky, and now it is just right to cool them down.
"Why don't you say anything? If no one wants to say something, then I start asking?"
Everyone bowed their heads honestly. Apart from such a big omission, what can they say, even if the quotations of these two companies have moisture, no matter how much the water is, it is impossible to get more than 60 billion yuan?
Especially after the promise given by Howell, they knew that their cost budget was definitely based, otherwise they would not dare to make a promise!
Ferdinand glanced at the crowd and asked coldly: "Since you didn't say anything, then I started to ask? You have seen the cost budget of the bidding company, so who tells me why is the difference between the two? Will the gap be so big?"
Although there was no name, Bashir knew that this was the main responsibility of the Ministry of Transportation. He could only bite the bullet and replied: "There are four main reasons:
First, we did not consider the time cost of funds. The first few years of project investment belonged to the pure investment stage, and we did not calculate the interest of the invested funds. This is the most important error;
Second, we do not have complete statistics on the increased cost of construction in severe geological conditions and special climate areas, but this still needs to be verified;
Third, the price of raw materials and labor costs have risen. This expenditure is unknown and we have not included it;
Fourth, we did not calculate the cost of building a gas station! "
Ferdinand sneered and said: "You are doing a great job. I don't think about it, and don't think about it. Don't tell me that all the projects in the ten-year plan are planned like this!
So what should I do now? Even if it only requires an investment of 60 billion levs, the average investment, the interest of bank funds is calculated at 5% per annum, and the average annual rate is at least 1.5 billion levs, (formula: 600÷2×5% =15) In ten years, that would be more than 20 billion lev! (Rolling interest, need to be accumulated, compound interest calculation.)
In fact, this number will only be bigger. I think you all passed the math, right? So who will tell me, who will pay for the additional costs? "
Everyone fell into silence. The additional funds were not a small amount. The Bulgarian government could not afford this expenditure, and it was also impossible for enterprises to bear this expenditure for no reason!
Constantine hesitated and said: "Can we ask the National Bank to provide a low-interest loan for this project to offset part of the time cost of capital?"
The Chancellor of the Exchequer Kennedy denied: "Impossible! This is equivalent to passing the risk of this project to the bank. In fact, the risk of this project is no longer controllable, and it is very likely that the loan will not be repaid in the future!
Once the bank gets too deep in this project, if the project fails in the future, the bank may go bankrupt, and we cannot bear the consequences! "
Constantine stopped talking. This is no longer a question of interest rates, but the project itself has huge risks. Once the project fails, the supply will be cut off. There are tens of billions of funds, and no bank can afford this. risk!
Chekov thought for a while and said: "Can our government provide them with better conditions, increase their profit margins, and lower the risk factor?"
Ferdinand nodded, and continued to ask: "What's more? What kind of policy support can the government provide to continue the project?
Chekov thought for a while and said: "For example, allow investors to delay road construction in some areas to reduce their initial funding pressure;
Another example: the government directly allocates part of the undeveloped sand and gravel yard to this project to reduce the cost of raw materials;
It is even exempt from taxation of participating construction companies in this project, thereby reducing the construction cost of this project!
The government can also authorize road construction companies to build gas stations on the roads, and at the same time authorize them to build a series of facilities such as shops, restaurants, hotels, etc., and they are also given free treatment! "
Ferdinand shook his head and said: "The methods are all good methods, but in fact these methods are impossible to implement!
Unlike gas stations, we cannot exempt these shops, restaurants, and hotels forever, nor can we allow them to monopolize these industries on both sides of the road!
So in fact, the most we can do is to reduce part of the raw material cost of this project, but this will save billions of funds at most~EbookFREE.me~ and it is simply not realistic to increase the income of this project!
It is impossible for us to break the industrial chain of our entire society for this project, even the allocation of stock yards and tax exemptions for participating enterprises, which will cause very bad social impact! "
Everyone looked dimmed again, as Ferdinand said, the industry chain of society cannot be destroyed. The preferential policies provided by the government must be carried out within the framework permitted by Bulgarian law.
Bashir thought for a while and said: "Can the government find a way to provide a batch of free labor for this project?"
Ferdinand did not answer, but instead turned his gaze to Constantine, obviously he was beckoning the Prime Minister to answer.
After a moment of silence, Constantine hesitated and said: "The free labor in the hands of the government is made up of criminals. They are all working in mines or on railways. If they are invested in this project , Then what about our mines and railways?
It is impossible for us to affect other projects for the sake of highway projects! Unless we find a way to increase a batch of free labor, this issue still needs the cooperation of the military! "
Although there is no direct statement, everyone knows what Constantine's method is, but everyone has no objection. Now it seems that this is undoubtedly the best method.
After all, in the highway construction of this era, labor costs accounted for almost half of the construction cost. If most of this fund can be saved, then the problem of excessive investment will basically be solved!
Ferdinand did not express his position, but his response was undoubtedly tacitly acquiescing to the government's decision. As for the consequences of this decision, it is not within his scope of consideration. He can't see it anyway!
...
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