Identify the tender sum that the contractor should submit for the project. This should be broken down into the following:
- Temporary works and site overheads.
- Costs of supervisory and managerial staff
- Costs of skilled labour
- Costs of unskilled labour
- Costs of construction plant
- Costs of materials procured locally
- Costs of imported materials and components
- Costs of imported equipment
- Contingencies
- Head office overhead costs
- Profit margin
The above costs should be broken down into a cash flow schedule for each month of the project commencing from the time when the contract was signed through to the date for commencement on site to the completion date and the date for final settlement.
The above should be compared with the expected cash inflow from the mobilization payment, interim certificates and final payment to form a cumulative cash flow schedule.
All the above should be presented in local currency. Current exchange rates can be computed as for Part II below.
Part II
Take account of the following economic changes and revised the expected profit margin and the cash flow schedule:
- Local inflation
- Devaluation of the local currency against other currencies
- Pound Sterling
- Euro
- US Dollar
- South African Rand
- World interest rates
- Time and cost escalation
The incidence of inflation, currency fluctuations, interest rates and time and cost escalation will be determined by random numbers. These will be provided in a table within the project brief and can be read off the row corresponding to the last two digits on the student’s matriculation number.
| Supervisory Staff | Skilled Labour | Unskilled Labour | Local Materials | Plant from USA | Components from France | Equipment from South Africa | ||
| £ Sterling | D Dalasi | D Dalasi | D Dalasi | $ Dollars | € Euros | R South Africa | ||
| 1 | Temporary works and site overheads. | DJF 306,000,000 | DJF 1,989,000,000 | DJF 306,000,000 | $1,815,600 | € 2,958,000 | ||
| 2 | Costs of supervisory and managerial staff | £30,600,000 | ||||||
| 3 | Construction of Quay and Jetties | DJF 982,500,000 | DJF 7,860,000,000 | DJF 6,877,500,000 | $34,977,000 | R 70,740,000 | ||
| 4 | Construction of Rail Links | DJF 642,600,000 | DJF 2,754,000,000 | DJF 3,488,400,000 | $16,340,400.00 | € 3,549,600 | R 39,657,600 | |
| 5 | Construction of Roads | DJF 150,000,000 | DJF 1,425,000,000 | DJF 1,312,500,000 | $4,450,000.00 | € 2,175,000 | R 18,900,000 | |
| 6 | Warehouses | DJF 112,500,000 | DJF 281,250,000 | DJF 506,250,000 | $667,500.00 | € 1,087,500 | R 4,050,000 | |
| 7 | Storm Culverts and River Diversions | DJF 112,500,000 | DJF 675,000,000 | DJF 1,012,500,000 | $3,204,000.00 | € 1,740,000 | ||
| 8 | Landscaping | DJF 114,750,000 | DJF 1,262,250,000 | DJF 459,000,000 | $4,085,100.00 | € 1,109,250 |
| Assumed Exchange rates for DJF (Part I of assignment) | Revised Exchange rates for DJF (Part 2 of assignment) | Inflation per annum | Interest Rates | Cost escalation (contract sum) | Time overrun | ||||||
| £Sterling | $US | € Euro | Rand | £Sterling | $US | € Euro | ZARand | % | % | % | weeks |
| 157 | 112 | 148 | 11.1 | 170 | 121 | 160 | 12.1 | 10.7 | 5.5 | 6.8 | 5 |
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