Unit 8 turn-key construction

(continued)

A.

TEXT

December 1, 20... Dear Sirs,

Thank you for the Draft Contract which we duly received from you.

Having thoroughly studied the document we have come to the conclu­sion that while on the whole we find it acceptable we cannot agree to the wording of some clauses.

In the first place we are sorry to remind you that in accordance with the agreement previously reached you were to have indicated' in the Draft Con­tract both the part of the Contract Price to be covered by the credit and its breakdown as well.

You will realize that unless you give us the breakdown ² we will not be prepared to discuss the above part of the Contract Price.

As to the amount of local costs we feel confident that the sum is overes­timated and this is based on our observation and experience of the local firms.

You are right in saying that your local expenses will be considerable since you will have to cover all costs and charges on employment of labour and staff, travelling expenses as well as those on transportation of equipment. But we cannot accept the indicated rates for work as they exceed the local ones by 10-25%.

On the matter of hard currency costs we are glad to state that we find the amount you allot for the equipment to be re-exported fully agreeable. However we would request you to reconsider the currency in which you propose to pay for the services of foreign subcontractors and the deprecia­tion charges on the equipment to be rented by them.

Regarding the queries raised in your previous letter we confirm that the Contract Price is a lump-sum one, excluding import and customs duties or

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any other charges which may be levied on the Contractor during the cofl tract life.³

Please study our comments and send your delegation for further detailed discussions.

Yours faithfully,

B.

Discussing terms of payment

Contractor: Now to the most important question, the terms of payment.^:'^!

Customer: Mr В., I already see certain problems. The amount of money you, want to be paid as an advance in local currency looks quite large.⁴

Contr.: Not if you consider the money we'll need to cover our starting ex-? penses, I mean initial work on the job site, expenses on transportation" and employment of local subcontractors, lots of things.

Cast.: Well, Mr В., your mobilization expenses are going to be heavy ⁵1 agree. Anyway, look into the matter, again and see if you can reduce on something. I think we'll come to terms about the advance.

Contr.: We'll try. And do you accept the idea of making current payments in local currency against a schedule of payments?

Cust.: You see, Mr В., we've never practised it. We believe that monthly payments should depend on the amount of work you actually do.

Contr.: Why, certainly, our schedule is drawn up on the basis of the sched­ule of construction and erection works.

Cust.: We do not doubt that, but you may fall behind.

Contr.: I see your point, Mr M. Anyway, if there is a delay, payments will be adjusted to the executed work.

Cust.: Good. Do you still want us to accept the method of payment of local expenses as shown in the draft?

Contr.: We do. We think it most convenient if you transfer the sums due to us to the special account of our company with your Central Bank.

Cust.: We'd like to think it over again. I presume we'll have to settle this before we go on with the reimbursement of the credit and payments in hard currency.

Contr.: That's fair enough. But in any case payments should not be over­due. Outstanding bills and delays in payments will be regarded as in­fringements.

Cust.: Agreed.

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С

DISCUSSING HARD CURRENCY EXPENSES

Contractor: And now let's move on to the hard currency expenses.

Customer: Well, we've been over the point before and we do believe that the contract must stipulate the exact amount of hard currency. The matter is we've got to apply⁶ to the government for hard currency, and they require the exact amount.

Contr.: We understand your position, but we haven't yet signed contracts with foreign subcontractors or contracts for deliveries from third coun­tries.

Cust.: Don't you have any offers?

Contr.: We do, but at the moment we can give you only a rough figure of our future hard currency expenses.

Cust.: What do you suggest then, Mr В.?

Contr.: We guarantee that we'll sign the contracts within six months of signing our contract. Right after that we'll be able to sign a protocol and indicate the exact amount of hard currency expenses.

Cust.: Well, if that's your promise we'll accept it.

Contr.: Glad to hear that, Mr M. Then we'll let you have the wording of the relevant contract clauses for approval without delay.

Cust.: Okay, Mr В., that covers payments, doesn't it?

Contr.: Not quite. Mr M., you promised to specify today the procedure of providing the performance bond.

Cust.: Oh, yes, Mr В., I've cleared the matter up with our financial depart­ment. The bond must cover our advance payment. Your letter of guar­antee to the sum of the advance should be given within 15 days from the date of signing the contract and it will be valid until the presentation of the final taking-over certificate.

Contr.: Thank you, Mr M.

Cust.: Any other outstanding points for today?

Contr: Yes, Mr M., one more thing. Will you object to it if we sell in your country building equipment, transport vehicles and unused materials? We may find it reasonable not to take them back home after we've com­pleted the work.

Cust.: Certainly not, you'll be free to dispose of the temporary importation equipment. Moreover we'd like to have the first option in purchasing your equipment, and all surplus materials.

Contr.: Glad to hear that, Mr M. You won't regret it!

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i*

NOTES

WRITTEN PATTERNS

VOCABULARY NOTES

1. you were to have indicated ... Вы должны были указать

2. unless you give us the breakdown

3. during the contract life

4. The amount of money you want to be paid as an advance in local currency looks quite large.

5. mobilization expenses are going to be heavy

6. we've got to apply

если вы не представите нам разбивку (цены)

в период действия контракта

Сумма, которую вы хотите полу­чить в качестве аванса в мест­ной валюте, кажется весьма большой.

мобилизационные расходы будут большими

нам приходится обращаться с просьбой