foreign purchase - rahem
TRANSCRIPT
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Al -bar io Engineer ing Pvt L td
HCPC, Quetta Site
Presenter: Rahem Khan
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For the smooth and safe operation of plant equipments we needto purchase / hire the parts and services from International /
Foreign market and this is a general policy of WTO (World Trade
Organization) and IPPPs (Independent Power Procedures
Policies) that the contractor involve in any kind of EPC Contract
binds him self to procure the installed package parts from OEM
(Original Equipment Manufacturer) for a specific period of
contract, these periods are named ofYRW (Year Run Warranty)
TQM (Total Quality Management (Parts Supplies & Services
Clause) ) LTSA (Long Term Service Agreement) and some
times the reasons of foreign purchases are to be of critical and
sensitive parts non-availability in the local market or quality
concerns and some others as per agreed contract.
Definition:
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Co-Operation Process Structure
Inter-Department
Suppliers Banks
Customs Officials
Project Owners (HCPC)
Clearing Agents
International Transportation
authorities
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Procedures:Requisitions(Initial Purchase Document with a specified data)
Inquiries(Direct to OEM or OEMs International authorized agent)
Quotation(Prices in an International Currency with their companys
standard terms and condition for the job like Ex-works, FOB, CIF and C&F)SEE NEXT SLIDE FOR COMPLETE DETAIL OF INCO TERMS (SLIDE NO:05)
Purchase Order(A correct purchase order complying all with suppliersstandard terms and condition)
Payment Procedures(LC (Letter of Credit) or TT (Telegraphic Transfer)
If the business comes with advance payment procedures, If not then after 30
days of invoice receipt as per buyers policy)
Consignment Delivery / Customs Clearances(Consignment need to be
cleared for permanent installation or storage on facility from Govt customs
house completing all the Pakistan Govt Import Trade Procedures)
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Terms Description
EXW Ex Work (Named Place)
FCA Free Carrier (Named Place)
FAS Free Alongside Ship ( Named Port Of Shipment)
FOB Free On Board (Named Port Of Shipment)
CFR Cost And Freight (Named Port Of Destination)
CIF Cost Insurance And Freight ( Named Port Of Destination)
CPT Carrier Paid To (Named Point Of Destination)
CIP Carriage And Insurance Paid To (Named Point Of
Destination)
DAF Delivered At Frontier (Named Point)
DES Delivered Ex Ship (Named Port Of Destination)
DEQ Delivered Ex Quay Duty Paid (Named Port Of Destination)
DDU Delivered Duty Unpaid ( Named Point Of Destination)
DDP Delivered Duty Paid (Named Point)
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General Cost Center
Statistics for Years
2001 -2002(Parts for major
equipments /
systems)
Equipments Year 2001 (Rs) Year 2002 (Rs)
Gas Turbine 4500000 16500000
S-Turbine 10000 7000
Gas Comp 626000 6000000
Air Comp 15000 18000
Demin Plant 120000 480000
Generators 5000 1500
DCS Systems 858000 133000
Vibration
System
00000 00000
BSD 3000 10000
HRSG 00000 00000
All Others 400000 450000
TOTAL COST 6537000 23599500
Note: these prices are
exclusive of any
importation taxes or
duties
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Year 2001-2003 Cost for Foreign Purchase
(Equipment wise )
-2,000,000.00
0.00
2,000,000.00
4,000,000.00
6,000,000.00
8,000,000.00
10,000,000.00
12,000,000.00
14,000,000.00
16,000,000.00
18,000,000.00
GT GC DCS ST Demin
Year 2001
Year 2002
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Orders flow chart to the Countries for major orders (%)
USAItaly
Singapore
Mideast
USA = 30% - Italy = 40%
Singapore = 70% - Mideast = 20%
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Activity Risk
Assessment Risk War Risk Currency Risk
Transportation Risk Wrong Delivery Risk Market Risk
Legal Risk Acceptance Risk Indemnity Clauses
Environmental Risk Insurance Risk Damaged Delivery Risk
Direct Credit Financing Risk Applicable Policy Risk
Quality Risk Quantity Risk Warranty / Guarantee Risk
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