Foreign Purchase - Rahem

7/28/2019 Foreign Purchase - Rahem

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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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Foreign Purchase - Rahem

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