Decision-making And Working Procedure For International Engineering Project With Export Buyer’s Credit

Participating EPC projects with contractors’ financing support is popular in international engineering market, among which with contractors’ export buyer’s credit is one of the important modes. It has been proven in practice that Chinese engineering enterprises are capable of carrying out such kind of projects. However, there is no custom operating procedure nor guideline has been documented which Chinese enterprises can follow. This has some negative impact on operating efficiency and strategic expectation of engineering enterprises in contracting such projects. Therefore, this thesis, from the perspective of Chinese engineering enterprises, studies the decision-making and working procedures involved. It is hoped to give some guidelines and instructions to Chinese enterprises in doing such kind of business.Firstly, the thesis summarized, compared and analyzed three main different methods and their features related to contractors’ export buyer’s credit projects. Based on review on literature and usual business operating practices of Chinese enterprises involved in contractors’ export buyer’s credit project, the thesis divides the decision-making procedures into six stages of development planning, tendering, contract negotiating, financing, constructing and transferring. These stages form directly and naturally the whole decision-making procedures of Chinese enterprises operating export buyer’s credit projects.Then, the thesis focuses mainly on the first four of the above-mentioned six stages and studies the details of decision-making and working procedure, and illustrates them in the form of operation process diagrams. Key points include that the reliability of project information source should be investigated, the political, ecnomic, legal and natural situation, etc. of project host country should be learned, so that the contractor can aim at the project information and have feasibility analysis and preliminary risk identification; The contractor should study bidding documents in detail during tendering, and make decisions whether entering a bid or not timely, based on the process analysis of bidding preparation /profession discussion /whole programme optimization stages; The contractor should take different strategies during different contract negotiating phases for signning succesfully; The contractor or Owner need to apply, be investigated and surveyed, be accepted, negotiate and sign during operating the export buyer’s credit and credit insurance business.Following on the above, the thesis analyzes and studies further the critical issues during each stages on doing export buyer’s credit international projects and summarizes some useful conclusions, for example, the financing plan should be considered in time during contract negotiating; the contractor should study the interrelation of the effective date, contract cost and expiring date between business contract and financing plan; All kinds of relevant export buyer’s credit policy should be unscrambled and applied effectively, in order that engineering enterprises can accomplish their development planning goal; The interrelation of each participant involved in export buyer’s credit business should be analyzed in detail, so that the contractor can have widespread support in doing such kind of international projects.Finally, the thesis applies the above conclusions in a real project implemented by the T Company and it is shown that the decision-making and working procedures listed above are reasonable and could be used as guides to practical operation and also as reference to relevant foreign trade and investment projects.