Vol 5 Chapter 55: , Raise construction costs

As soon as the ten-year plan started, the Bulgarian government was busy again. The big outline plan has been finalized, and there are still a lot of sub-projects in it, which need to be discussed and set up.
What the cabinet is most worried about now is the highway construction bidding meeting, which involves tens of billions of levs of capital investment. The world's competent bidders are all single digits. It would be embarrassing if no one came.
Constantine asked concerned: "How's it going, how many consortia have signed up?"
Minister of Transport Beshir Ivanov thought for a while and said: "Up to now, there are only two consortia that have signed up!"
Hearing this result, Konstantin breathed a sigh of relief, as long as someone signed up. This kind of long-term investment is inherently less capable of investment.
After more than ten years of pure investment, there will be no hope of returning to the capital in the next 20 to 30 years. Capitalists are all chasing profits. How can they swarm?
Constantine asked: "Which two consortiums?"
Beshir Ivanov shook his head and said: "It is not an international consortium. Both of them are temporarily organized by our domestic capitalists. The leaders are Union Bank and Royal Bank. They came forward to pull a group of people. , Ready to participate in this bidding!"
Hearing that it is a group of domestic capitalists, Constantine can basically guess the result. Except for these two banks, other capitalists have no such appeal at all, let alone the financial power!
Although the National Bank is also known as one of the three major domestic banks, it is a pity that these two banks have been far behind in terms of financial strength.
Even if the government puts all its fiscal funds in the National Bank, it still cannot reverse their weak reserve capacity.
The Royal Bank has absorbed a large number of deposits from farmers, nobles, some workers, and capitalists, while United Bank has absorbed most of the deposits of capitalists and workers, while the country's positioning is somewhat blurred.
At the beginning, because of the service attitude, it was surpassed by the two new private banks. Although the service has been improved later, it will not have much effect!
Especially after the two major banks obtained the right to issue banknotes, this advantage became even more obvious. Although the National Bank has government endorsement, the two major banks also have hundreds of tons of gold placed there as a deposit, and the security is beyond doubt.
Before that, the government hadn’t made a bid for Bank Negara to take the lead and form a joint company to bid. Unfortunately, the investment quota was too large and the rate of return was too low. Few people were willing to participate, and the management of Bank Negara was also very resistant to this time. investment.
It can’t be said that their judgment was wrong. After all, from the perspective of return on investment, this project is difficult to make a profit. Even if it can make money, it will be thirty to fifty years later.
Constantine asked concerned: "Which companies are participating in the country?"
Bashir thought for a while and said: "Basically, they are domestic oil companies and automobile manufacturers, as well as related industries in these fields. I have read the tender reports they submitted.
They hope to expand the market and increase corporate profits by improving traffic. They are not very concerned about the profitability of the highway itself.
Judging from their plan, their expectations for this project are very low. They plan to achieve capital protection within 20 years and recover the investment within 50 years! "
Constantine rubbed his forehead and said, "Our road project won't be so bad, right? It will take 50 years to pay back?"
Beshir shook his head and said: "I don't know! In theory, the highest number of motor vehicles in our country after ten years can reach 10 million, of which the number of cars can reach two to three million. Vehicles.
Considering that the government is in order to protect agricultural production and the daily life of residents, the oil prices of agricultural vehicles, trucks, and buses will be restricted. It is almost impossible for them to make money from two or three million cars!
Even if the annual gas bill for each car is as high as 2,000 levs, they have half of the huge profits, and only a gross profit of two or three billion levs. After deducting road maintenance costs, gas station operating costs, and interest on funds After the cost, they are still at a loss! "
Constantine stopped talking. If this is the case, it is estimated that only these directly benefiting companies will invest. After all, once the road is built, their market will expand several times. Even if the investment is not profitable, it will be The lack of fields can be profitable.
Time passed in a hurry, and on December 12, 1921, the bidding meeting organized by the Ministry of Communications was grandly opened. Hundreds of media at home and abroad gathered together.
This bidding is extraordinary, and it is known as the "Million Kilometer Road" bid!
Yes, according to the plan of the Bulgarian government, the total number of roads in Bulgaria will exceed one million square kilometers within ten years, including 50,000 kilometers of expressways, 150,000 kilometers of secondary roads, and the rest are rural roads. .
At present, the total mileage of roads in Bulgaria is only more than 300,000 kilometers, and most of these roads are dirt roads, and the highway is only more than 10,000 kilometers, which requires extensive reconstruction.
This means that in the future, Bulgaria will begin to explode highways at a speed of 70,000 kilometers per year. Once this plan is completed, the total number of highway mileage in Bulgaria will exceed the current entire European continent in ten years.
The media all over the world have set their sights on this, and they are all waiting to see the results of this bidding. If it succeeds, it is estimated that it will have an intuitive impact on the transportation policies of the next countries.
After all, roads are not comparable to railways. Except for special sections, most areas do not require much construction technology. Even the current expressways do not have the high standards of later generations, and the construction is not difficult.
If the government can use the wealth of capitalists to improve the country's road system without investing a penny, but only by arranging land and policies, it is estimated that governments of all countries are willing to follow suit!
Out of the importance of this bidding meeting, the Minister of Transport Beshir Ivanov personally presided over the meeting. The threshold for this bidding meeting is very high. The bidding deposit of two billion levs must be paid first. It eliminated most of the investors who had no strength.
If you don’t really want to win the bid, it is estimated that no one will make a joke about 2 billion levs, even though it will be refunded after the bidding ends, the capital cost is also very high.
Of course, banks are very dominant in this regard. For example, Royal Bank and United Bank can write a check directly, and the Ministry of Transportation does not need to accept cash!
Consortiums abroad are very hurt and must bring in funds. Such a large sum of funds must first be exchanged internationally. The time cost alone is unacceptable.
The Chancellor of the Exchequer Kennedy brought a bad news: "Behill has a bad event. The three British consortiums and two French consortia that have registered in advance announced their withdrawal from this bidding. Now there are two bidding companies left!"
The Minister of Transport Beshir Ivanov said in disbelief: "What? How could they suddenly withdraw? Don't they want the bid bond?"
Kennedy said with a sullen expression: "Until now, our Treasury Department has not received the deposit from them. When they signed up, they requested an extension of the deposit payment on the grounds of international exchange. Considering their strength, we agreed.
We learned from the bank that these consortia did conduct exchange business with them, but they suddenly cancelled the bidding plan yesterday! "
Beshir's face suddenly became gloomy. As long as the two companies participated in the bidding, this bidding activity would undoubtedly make the Bulgarian government lose face.
...
On the other side, the Dougal Transportation Company is very fortunate. Yes, they are the temporary bidding company formed by the British Rothschild consortium. The top executives of the company are all senior executives of the consortium.
Three days ago, they completed a comprehensive survey of the planned route of the Bulgarian highway, which is not a survey, but a preliminary assessment of the terrain, construction difficulty, and estimated construction cost.
Then combined with Bulgaria's domestic economic development, a comprehensive assessment was carried out, and finally everyone came to a conclusion that this is a huge pit!
The information published by the Bulgarian government did not lie, but ignored a lot of things.
For example: Asia Minor, Syria, Iraq and other regions, many areas are now no-man’s land, all the purchase of materials, transportation and transportation need to spend a lot of money, this alone will increase the cost of billions of levs.
There is also some areas with harsh geological conditions and harsh weather conditions, which the government ignored when evaluating them. The pavement in these areas will definitely not work according to ordinary construction methods, and special treatment is required. How much cost will increase for these problems is still unknown.
In the end, the construction cost given by the experts of the Dougal Company was not more than 60 billion lev estimated by the Bulgarian government, but became a huge sum of nearly 100 billion lev.
As for Bulgaria's economic development evaluation, the data everyone has obtained is similar. The same income data, different cost forecasts, the final conclusion is naturally different!
After a comprehensive evaluation by Ferdinand’s consortium, it is finally believed that the cost will be recovered within 50 years at the latest. The most optimistic estimate is that the cost will be recovered within 35 years. Together with the benefits in other areas, this business can be done. .
The Rothschild consortium concluded that it was a huge loss, which increased the construction cost by two-thirds, and the interest cost of the capital could not be recovered. Once it fell into it, it would never get up again!
Several other consortia have also come to similar conclusions. It is estimated that they are now watching jokes to see which fool will jump in!
As a local snake, no one knows the road planning situation in Bulgaria better than Ferdinand. The main cost of building roads is manpower, sand and cement. In some areas, steel is needed to build bridges. You don’t need to consider the earthwork. The Bulgarian government will designate earth yards for free.
If it is an outsider, of course the raw materials can only be purchased at market prices. As a monopolistic consortium, these raw materials and machinery are produced in-house, which is nothing more than a problem of left-handedness.
If you have lost money on highway projects and made money on other projects, you can also use this list of losses to show the public a miserable price increase.
Even in terms of labor, there are very obvious advantages. The big deal is to cooperate with the military and let them be responsible for some cheap labor. Don't doubt their influence. You don't need Ferdinand to end the game. The people below can easily handle it.
These favorable conditions are calculated, and the increased costs are offset. With the advantage of local banks alone, the cost of international exchange is one or two points lower than that of foreign capital, which is one or two billion levs.
In the future gas station project, as long as the bank interest can be paid, Ferdinand is already making money, and ordinary people still don't know that this project has achieved profit!
...
No matter how many people participate in the bidding, this is the point anyway. Even if only one bidder is required to open the bid, the government's credibility cannot be lost anyway!
Considering the large number of media players, the bidding site was placed in the Congress Hall. Although there were fewer bidding companies, there were a lot of people present.
The two bidding units were very tacitly brought in a large group of people. The major media were all taking pictures frantically, and some people wanted to come forward to interview, but they were stopped by security personnel.
The Minister of Transport Beshir Ivanov stepped onto the rostrum and said directly: "This time the Bulgarian road construction bid, there are seven applicants, only two have submitted bid deposits, and the other five chose to give up.
Since they have given up, we don't care about them. The two companies participating in the bidding are Bulgarian Road Group and Bulgarian Road Construction Group.
This project includes 700,000 kilometers of new road construction and 300,000 kilometers of road maintenance and renovation projects. The detailed list has been sent to two representatives, and the Bulgarian government has also made public announcements. I believe that the two bidding companies have carried out detailed the study.
Now the bidding meeting has started. Since there are less than three bidding companies, according to the Bulgarian bidding law, this bidding is changed to a commercial negotiation mode, but the government has announced the requirements will not change.
May I ask the representatives of the two companies, do you have any objections? "
"No!"
"No!"
Bashir was already relieved that there is no best. What he fears most is that now these two companies have also withdrawn, then the Bulgarian government's bidding activities have failed!
"Well, now we have entered the formal bidding stage. After the Bulgarian government organized experts to conduct in-depth on-site surveys, the total mileage of the highway project was 1.0034 million kilometers and the total construction investment was 62.618 billion levs.
The details have already been listed in the list. Any comments from you? "
I saw Howell, the representative of the Bulgarian Road Group, said: "Our company believes that the list provided by the government is not accurate enough, and it is different from the results of our field survey. Here are the survey data we provided. Please review by the expert group!"
Without waiting for Beshir to speak, Smith, the representative of Bulgarian Highway Construction Group, also said: "Agree, our company has the same question. Here are the data of our engineers on site survey, please review by the expert group!"
Beshir-Ivanov knew that the trouble was serious. Once the bidding list was found to be seriously inconsistent with the actual situation on the spot, the Bulgarian government would have to bear full responsibility. Even if the two companies withdrew from the bidding on this ground, it is reasonable and legal!
However, Bashir remained unchanged and said: "The proposal is valid, and the expert team will conduct on-site deliberations!"
Due to too much information, the expert group can only look at a rough idea, but at first everyone's expressions are gloomy. The total cost given by the two companies is far from the total cost announced by the government.
They don't think that these data are falsified. They will know the results after organizing on-site surveys. Topography, landforms, and climate conditions, these natural factors cannot be falsified!
More than two hours later, the UU reading www.uukanshu.com expert group exchanged opinions. The chief expert Lancelot said:
Because the data provided by the bidder and the bidder in this bid are too far apart, on-site Survey can be confirmed!
At present, the total project cost given by the Bulgarian Road Group is 126.284 billion Lev; the total project cost given by the Bulgarian Road Construction Group is 126.328 billion Lev; the project cost given by the Ministry of Transport is 62.618 billion Lev.
The cost budget between the two parties is too far apart, and the project cost needs to be re-approved after field surveys. However, this bidding is different from the past. The bidders need to bear the full investment and realize the return on investment in the mode of gas station.
The result of this calculation does not affect the final bidding result. The two bidders can still continue bidding, or they can choose to give up. If it is finally determined that the data you provide is true and valid, you can file an administrative claim with the Ministry of Communications! "
Obviously, this is what Ferdinand learned from later generations and deliberately increased the cost. Like this kind of projects where bidders fully fund and are responsible for their own profits and losses, everyone's requirements for the amount of investment are not too strict.
The advantage is that, on the surface, the cost will not be recovered for a long time in the future, and the loss-making projects will naturally not cause people's jealousy.
If profits are realized soon, and the profits are still huge, then the investors who undertook the construction will soon become the target of public criticism, especially these projects that involve the national economy and the people's livelihood.
In order to avoid these unnecessary troubles, Ferdinand was prepared to make an astronomical investment from the beginning. It is very simple to control this.
For example: rising labor costs, rising material costs, rising capital interest costs, rising transportation costs, and harsh geological conditions have increased costs...
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