Bulgarian Empire

Hearing Lancelot's words, Beishir Ivanov was about to break out in a cold sweat. There is no problem with cost accounting errors, but if the error exceeds 20%, the cause must be investigated. Now a If the gap of more than two times is confirmed, then this is a very serious administrative accident.

If it is an ordinary mistake, 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 was before winning the bid. If after winning the bid, the winning bidder can take this evaluation report to touch the porcelain, directly pay all the construction costs and management expenses, and let the Ministry of Communications help with the construction, it is estimated that the Ministry of Communications will be sacked. The pit is dead!

Of course, it is impossible for this kind of thing to happen in Bulgaria. After touching the porcelain of the government, you still want to live a good life?

What Beshear is worried about now is that these two companies have been scared away by the cost, and what will happen after that, he, the Minister of Transport, will be in big trouble!

After a moment of silence, Smith said: "Our Bulgarian road construction company has limited financial strength and cannot afford this investment of more than 120 billion levs!"

Then Howell also said: "Unfortunately, the investment of more than 120 billion levs is really too big. Even if it is divided into ten years, it will cost 12 billion levs per year. Our Bulgarian The highway group company does not have the strength to undertake this investment independently!"

Neither of them said they would withdraw, which is undoubtedly good news. Beshear knows that the behind-the-scenes shareholders of these two companies are the beneficiaries of this plan. As long as they can keep their capital, or even not lose too much, they will Will support this plan!

Beshear asked: "What ideas do you two have? Regarding the issue of cost accounting, our government and your company's technical staff can re-survey and determine the new project cost. It will take a certain amount of time.

However, if you want to continue to build this project, then the final investment cost will still be borne by you, but the government will give you some support according to the actual situation! "

Smith said with some hesitation: "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 problem. According to the government's plan this time, non-luxury vehicles cannot use gasoline to make huge profits. The real profit point for us is family cars.

According to Bulgaria's economic development, the project will be fully completed in ten years, and the number of cars in the country will be between 2 million and 3 million.

Then the annual revenue may not be enough to pay the interest of the bank. If the operating cost, maintenance cost, and time cost of funds are included, our annual loss will be as high as 5 billion to 8 billion levs.

Even after 20 years, our domestic car holdings have doubled, we are still in a state of loss, and we have to add interest on the interest owed in the previous 20 years. The economic experts of our group told me that the loss The numbers will be even bigger!

If this continues to accumulate, I doubt that this project will ever pay off the bank interest! Of course, banks probably wouldn't dare to lend without restrictions like this, 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 number of cars in the country reaches 20 million and the average fuel cost per car exceeds 1,500 levs, If we calculate based on the doubling of the 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 that Smith was pessimistic. Don't you think your statement is more pessimistic than Smith's?

Bulgaria has a population of just over 40 million and needs to own 20 million cars.

Doesn't this mean that all adults who can drive have a car?

Is this possible? Every household has a car. Historically, Americans had only 5.33 million cars in the country at the peak of the economy in 1929!

It was not until the 1990s that North America and Europe reached the standard of 500 cars per 1,000 people. It was not even feasible to popularize cars in this era!

Even if the car is given to the people for free, their income cannot support a car. Now the per capita annual income in Bulgaria is only more than 1,200 levs, so let them pay 1,500 levs for gas. Isn't it nonsense?

Beshear knows that today's negotiations cannot continue. Unless the cost can be reduced, or some road sections with less traffic volume can be deleted, there is no way to proceed with this plan!

"Okay, both of you! I understand what you mean, so let's postpone the meeting first, and wait for the final calculation of the cost to come out, and we can continue to discuss!

But before 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 replied without hesitation: "The bottom line of the company is the maximum total investment, which cannot exceed 65 billion leva!"

Howell thought for a while and said, "Our bottom line is similar to theirs, let's say it's 65 billion leva!

Of course, if the government’s final evaluation price comes down, and the construction cost is lower than 100 billion Levas, we are willing to invest and entrust the government to build it, and it will be calculated as 100 billion Levas! "

As soon as he finished speaking, the reporters below all applauded. These words were very domineering, almost announcing that the cost of this project could not be less than 100 billion levas!

As for whether the Bulgarian government will undertake the construction, everyone knows that this is impossible. Where will the extra funding gap come from?

This is not a small sum, but it is tens of billions of levs. Even if the Ministry of Finance has money, it is impossible to spend such a large sum of money just to fill a hole for the Ministry of Communications!

The meeting on the first day was abandoned halfway, and the following meetings were postponed indefinitely. Compared with Beshear's worries, the reporters were happy. This is undoubtedly big news!

Soon the eyes of the world will be on Bulgaria again, and if the government fails to handle this issue properly, it will become the biggest joke of the century!

After the meeting was over, Besir rushed to the palace with experts and materials. How could such a big incident happen without an explanation?

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, after a long time, people will become wild, and it will be difficult to lead against Wu!

So Ferdinand pretended not to know anything, and held a cabinet meeting in the palace when something happened, waiting for them to come and be criticized!

...

Ferdinand looked at the anxious crowd with a livid face. In fact, he was already happy in his heart. As a cabinet that has been in charge of the Bulgarian government for more than 20 years, his prestige has long been high, and now it is time to cool them down.

"Why don't you say anything? If no one wants to say something, then I will start asking?"

Everyone lowered their heads honestly, except for such a big mistake, what else could they say, even if the quotations of these two companies are watery, no matter how watery it is, it is impossible to make more than 60 billion yuan, right?

Especially the promise given by Howell later, we know that their cost budget must be well-founded, otherwise they would not dare to make promises!

Ferdinand glanced at everyone, and asked coldly: "Since you don't say anything, then I'll start asking? You have all read the cost budget of the bidding company, so who can tell me why there is a difference between the two?" How big is the gap?"

Although he didn’t name them, Beshear also knew that this was the main responsibility of the Ministry of Communications, so he could only bite the bullet and answer: “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 have not fully counted the increased cost of construction in harsh geological conditions and special climate areas, but this 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 in the calculation;

Fourth, we did not calculate the cost of building gas stations! "

Ferdinand sneered, and said: "You guys are doing such a good job, don't consider this, don't consider that, don't tell me that all the projects in the ten-year plan are planned like this!

So what to do now? Even if it only needs an investment of 60 billion levs, the average investment, the interest on bank funds is calculated at an annual interest rate of 5%, and on average, it is at least 1.5 billion levs per year, (formula: 600÷2×5% =15) After ten years, it will be more than 20 billion Levas! (Revolving interest requires accumulation and 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 this increased cost? "

Everyone fell into silence. The increased funds are not just a star. The Bulgarian government cannot afford this expenditure, and it is 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 the time cost of part of the funds?"

The chancellor of the exchequer, Kennedy, denied: "Impossible! This is equivalent to transferring the risk of this project to the bank. In fact, the risk of this project is out of control, and there is a great possibility that the loan will 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 high or low interest rates, but the project itself has huge risks. Once the project fails, the supply will be cut off. There are tens of billions or hundreds of billions of funds. 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 reduce the risk factor?"

Ferdinand nodded and continued to ask: "Specifically? What aspects can the government provide policy support to allow this project to continue?"

Chekov thought for a while and said: "For example: allow investors to delay the construction of roads in some areas to reduce their early financial pressure;

Another example: the government directly allocates some undeveloped gravel yards to this project to reduce the cost of raw materials;

It even exempts the tax of participating construction enterprises in this project, thereby reducing the construction cost of this project!

The government can also authorize road construction companies to build a series of facilities such as shops, restaurants, hotels, etc. while building gas stations on the roads, and also give them free treatment! "

Ferdinand shook his head and said: "The methods are all good methods, but in reality, none of these methods can be implemented!

Unlike gas stations, we can't exempt these shops, restaurants, and hotels forever, nor can they monopolize these industries on both sides of the road!

So in fact, the most we can do is to reduce the cost of some raw materials for this project, but this will save billions of funds at most, and it is simply unrealistic to increase the income of this project!

It is impossible for us to break the industrial chain of our entire society for this project, and we cannot even allocate material yards and exempt tax-paying enterprises. This will cause very bad social impact! "

Everyone's expressions dimmed again, just like Ferdinand said, the industrial chain of society cannot be destroyed. The preferential policies provided by the government must be carried out within the framework permitted by Bulgarian law.

Beshear thought for a while and said, "Can the government find a way to provide a group of free labor for this project?"

Ferdinand did not answer, but turned his attention to Constantine, obviously he was signaling the prime minister to answer.

After a moment of silence, Constantine said hesitantly: "The free labor in the hands of the government is composed of criminals. They all work in mines or on railways. If they are invested in this project , so what about our mines and railways?

It is impossible for us to affect other projects for the sake of the road project! Unless we find a way to add a batch of free laborers, this issue still needs the cooperation of the military! "

Although he didn't say it directly, everyone knew what Constantine's method was, but no one objected. Now it seems that this is undoubtedly the best method.

After all, in road construction in this era, labor costs almost accounted for more than half of the construction cost. If most of this fund can be saved, then the problem of excessive investment will basically be solved!

Ferdinand didn't make a statement, but his reaction was undoubtedly acquiescing to the government's decision. As for the consequences of this decision, it was out of his consideration, and he couldn't see it anyway!

...

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