Traveling through the sword to engage in military industry

#321 - Compromise

After the resumption of the meeting, Sheng Huai'ren reiterated his conditions.

"What? If you can't get a controlling stake, you'd rather introduce internal combustion locomotives?" Williams frowned.

"Mr. Sheng, and gentlemen, you should be aware that your country is currently oil-poor. Diesel fuel is already in short supply. One ton of coal costs 15 yuan, while one ton of diesel fuel costs at least 70 or 80 yuan. Can you afford this cost?"

Williams said to the four people.

"Although the fuel cost will increase, the speed will also increase. In terms of overall ton-kilometer or passenger-kilometer cost, the cost of internal combustion locomotives is only slightly higher."

Sheng Huai'ren was confident, obviously having studied both options. He was familiar with the cost differences between the two.

"If domestic internal combustion locomotives become mature, large-scale production will greatly reduce the cost of this internal combustion locomotive."

"Moreover, the maintenance cost of internal combustion locomotives is far lower than that of steam locomotives. In the long run, I believe the cost will be close. If we can't agree on the equity ratio, we'd rather endure the initial cost increase."

Williams stared at Sheng Huai'ren's face, as if trying to discern whether this was merely a threat or his true intention.

Sheng Huai'ren's face was calm, as if nothing had been said.

"Mr. Sheng, we are discussing a $30 million deal, not a childish game," Williams said. "Perhaps you can use E5, but why not choose E5 directly from the beginning?"

Williams couldn't see through him. "Perhaps we need to compromise. 50:50 is a good idea, isn't it? Neither of us loses out."

Half for each party seems fair, but from a business perspective, it is quite terrible. Many times, indecision can lead to internal friction.

After all, there are too many times when opinions differ in business.

Sheng Huai'ren also gave up a little bit of profit. After all, the early cost of steam locomotives is indeed less than that of internal combustion locomotives. Each locomotive costs hundreds of thousands more per year.

This money is much higher than the one percent dividend given to Williams.

Williams seemed disappointed that he couldn't get control.

However, at this time, he really had no good tricks.

Now is different from before. Foreigners used to have advantages in the country, but now there are many areas where foreigners have restricted lists. The fact that local railways can still be opened up is only because the infrastructure is too weak and requires a lot of investment to boost it.

In addition, although railways allow private capital to participate in operation, the arrangement of train services and freight pricing are all unified management, and local railway companies have no say in the matter. Applications can be made for opening train services, but the approval is in the hands of the Railway Committee.

After arduous negotiations, the four major families and Elco finally reached an agreement.

In addition to the 50-50 split, Williams also added a supplementary agreement that the annual profit dividend should not be less than 60%. For him, entering this market was to make money. Investment must have returns, and it cannot be too late.

In addition, in terms of loans, Williams could not accept domestic bank interest rates and required all foreign loans to be used. In China, a one-time investment was adopted, and then everyone would repay the foreign loans together, because under the current conditions in Rogue Eagle, the interest rate on commercial loans was less than 3%! The interest rate on long-term foreign government bonds was only 2.1%.

Such a huge interest rate difference made Williams unable to accept the 25% loan interest rate.

Sheng Huai'ren and the others gladly accepted this condition, after all, this was a win-win situation for both parties, which was equivalent to saving about 20 million yuan per year in interest.

Everyone was more confident in the profitability of this project.

In order to start as soon as possible, the five parties decided to invest 120 million in the first year, dividing the railway construction into multiple sections and starting construction at the same time, striving to shorten the three-year construction period to two years!

Of course, under this premise, the imported Big Boy steam locomotive factory was also set up in Jeju to start construction, striving to produce the locomotive as soon as possible, and completing the production of 20 locomotives as early as the second year when the railway construction was successful.

Considering that the locomotives still had to undergo necessary tests, they also spared no effort in factory investment, and also prepared to carry out multiple parallel expansions, fully launching production factory construction, equipment procurement, worker recruitment, and other tasks.

The latest novel is first published on Liu Jiu Shu Ba!

Although this would cause some waste of costs, at this time, they hoped to seize more time to open up and make money as soon as possible.

Qilu Steel suddenly received such a large order for track steel, and suddenly ate up more than 10,000 tons of new production capacity. The newly built 300,000-ton annual production capacity was almost all sold out. Railway construction, bridge construction, and large-scale factory construction, all kinds of steel are now in short supply.

Ren Zhong's original plan of 10 million tons of production capacity has now been realized as scheduled. For this steel production capacity that I didn't even dare to think about before, everyone is even more surprised that there is not much idle capacity. The launch of large-scale construction, the whole country seems to be a big construction site, swallowing the huge steel production capacity in one gulp!

This is only steel. The production of cement, asphalt, cables, and other materials has also expanded its scale, and a large amount of it is also consumed in infrastructure construction.

If only GDP is calculated, then there is no doubt that it is a rapid and leap-forward development!

The shipyard went from building 4 Dawn-class ships at the same time to 8 ships, to 12 ships. The time span was only a few months! The new slipway will be reduced well, and then put into the increasingly mature Dawn-class ro-ro cargo ship.

Not only is Asian shipping and global shipping booming, but domestic coastal shipping is also extremely busy. From Lingnan to the ports of the Liaodong Peninsula, there are almost all kinds of transport ships coming in and out every day. Although the Dawn class is also mixed in, the current number is still small, but the fast and reliable reputation is fermenting with the continuous increase of the Dawn class.

If it develops at this rate, the end of the First Five-Year Plan will definitely create an amazing miracle!

However, something that was destined to happen happened in advance when Ren Zhong was completely unprepared!

Second update, asking for monthly tickets