The construction costs should not be vulnerable to inflation-based increases; the engineering, procurement and construction (EPC) contract price, financing costs, and most advisers' costs should all be fixed.
They spoke of pricing, finance, and doing business within the collaboration model, assuming that the innovation would automatically generate financial capital.
Despite the reduction in available money brought about by the decline in bond prices, financing is still sufficient for the plan to work, the document said.
At those sort of prices, financing is not an issue – you either have several million euros or you don't – but lower down the scale, many buyers still find it necessary to borrow.
This estimates the revenues and cost over the life of a project including factors such as energy prices, financing costs, depreciation, and tax considerations.
As the authors of that paper concluded: "While real activity and consumer prices were stable, asset prices, financing flows and balance sheets were manifestly not.
Unlike many Japanese real estate moguls, the brothers avoided buying during the bubble when, on top of zooming prices, financing costs were around 8%.
Although developing countries have been somewhat immune to tightened credit conditions since they have lower interest rates and competitive exports and commodity prices, financing troubles in some emerging markets have already scrapped several infrastructure projects, Caterpillar said.
Last month chicken producer Pilgrim's Pride, reeling from inflated grain prices, financed $180.0 million in equity by selling 7.5 million shares of its outstanding stock to pay off its debts.
Western buyers, instead of squeezing factory owners on price, should finance better safety standards.
