The road was blocked, so Pengcheng changed the subject.
"Let's set this issue aside for now. Based on your company's operations in Shanmei, your annual revenue from garbage recycling, liquefied gas production, organic fertilizer, and recycled materials must be quite substantial..."
Jiang Hailin cut him off. "We can't agree with that assessment. The by-products of garbage recycling are the result of our company investing significant manpower and resources in research and development. They involve a great deal of intellectual property..."
"Besides, the gas and organic fertilizer companies both have operating costs. Our profits would barely cover them. No one is willing to run a business at a loss."
The negotiations were tense from the start. Suiren Company refused to yield and began laying out its own terms.
These included the land for the recycling plant, staff housing, vehicle permits, gas operating rights, and the details of the city sanitation work.
After a morning of negotiations, the two sides still hadn't reached an agreement. Several major issues remained.
One was the sanitation contract. Suiren Company demanded a twenty-year operating concession, an annual contract fee of five billion, and payment in advance each year.
The other issues were just as contentious.
For example, there was the wastewater treatment plant. Pengcheng Water Group, a joint venture between Pengcheng and the Gallic Veolia Company, was involved, but Suiren Company didn't intend to supply the purified water it treated to Pengcheng Water Group. Instead, it wanted to set up a bottled purified water company.
The gas operating rights were another issue that left Pengcheng's representatives in an exceptionally difficult position.
It was destined to be a difficult negotiation.
After three consecutive days of talks, the two sides still couldn't reach an agreement. In the end, they had no choice but to suspend negotiations and return home to revise their proposed terms.
Suiren Company, however, had no intention of backing down.
Just as the two sides reached an impasse,
a special delegation from Hui City Special Administrative Region arrived in Shanmei's urban district.
They moved quickly. After leading the delegation to inspect Guizhuling Industrial Park, Gao Jianwei took a close look at the wastewater treatment and advanced recycling facilities. He realized he had made the right trip.
He immediately went to pay a visit to Suiren Company's headquarters.
When they arrived at the entrance, they saw the row of plaques and only then realized that the company's backing was stronger than they'd expected.
Lin Baijie, who happened to be at headquarters, received Gao Jianwei and his delegation.
After more than ten minutes of mutual compliments, Gao Jianwei explained why they had come: he hoped Suiren Company would invest in Hui City Special Administrative Region and establish a factory there.
Jiang Hailin, who was attending the meeting, took out a standard cooperation agreement. Using Hui City Special Administrative Region's permanent population of 5.14 million as a reference, it demanded an annual sanitation contract fee of 514 million.
The standard cooperation agreement was intended for cities that weren't first-tier cities. It used a special fee schedule:
For first-tier cities, at least 200 yuan per person per year; for second-tier cities, 100 yuan per person per year; for third-tier cities, 80 yuan per person per year; for fourth-tier cities and below, 50 yuan per person per year.
Gao Jianwei and the others found the fee hard to accept. It was simply too high. Although Hui City was a special administrative region, that was mostly in name; it was nowhere near comparable to Pengcheng.
The proposed annual fee of 514 million was clearly beyond their expectations.
Apparently sensing what they were thinking, Jiang Hailin took out another contract. "Actually, there's room to negotiate this contract price."
Gao Jianwei took the new contract and looked it over. The sanitation contract fee was still the same. When he turned to the next page, Suiren Company's real intentions became clear.
It required Hui City Special Administrative Region to hand over the city's water company and wastewater treatment plant to Suiren Company to make up the difference in the sanitation contract fee.
It also required the authorities to grant Hailu Gas Company an exclusive gas operating concession in Hui City.
Gao Jianwei was now torn. He couldn't make a decision on the spot, so he had no choice but to return to Hui City with the two cooperation agreements.
Watching Gao Jianwei and his delegation leave,
Lin Baijie and Jiang Hailin showed no sign of backing down. Suiren Company could make a profit under either contract.
If it took over the water company, Hui City's annual tap water consumption was around 300 million cubic meters. At an average price of 2.6 yuan per cubic meter—1.6 yuan for water and 1 yuan for sewage treatment—the company's annual revenue would be around 800 million.
It was a high-quality asset. All they had to do was reform its internal operations and fix the unreasonable practices, such as redundant staffing, falsified accounts, and accelerated depreciation.
With proper management and Suiren Company's technology, annual profits of 500 or 600 million wouldn't be a problem.
Add liquefied gas, organic fertilizer, recycled materials, and factory pollution management to the mix, and it was practically a business guaranteed to prosper in any conditions.
September 6.
Huang Xiuyuan took a brief look at the international financial markets. His Huang's International company in Xiangjiang had already hired several professional managers.
After several months of short selling, the company's total assets there had reached 420 million US dollars.
He told the managers to keep an eye on the US financial markets, especially Lehman Brothers. Huang Xiuyuan was very cautious, however, and wouldn't allow the investment company to use leverage exceeding two times, lest Wall Street take advantage of them.
Meanwhile,
Pengcheng still hadn't made a decision.
Hui City, on the other hand, showed sincerity. Gao Jianwei once again led a delegation to Shanmei's urban district.
At Shiguang Information's headquarters, in the seventh-floor conference room, Gao Jianwei, Hui City's plenipotentiary representative, sat down at the negotiating table once more with Lin Baijie and Jiang Hailin.
"Mr. Lin, Team Leader Jiang, these are our terms."
After carefully reviewing Hui City's proposed terms, the Hui City authorities, who lacked substantial funds, chose the second cooperation plan.
"Your side can retain 80% of the water company's shares, and we can agree to that. But I have some objections regarding management rights," Jiang Hailin said.
He demanded full management authority throughout the thirty-year operating concession.
He also demanded an additional contract stipulating that all profits from Hui City Water Affairs Company during the concession period would offset the sanitation contract and wastewater treatment costs. If that contract were voided, the sanitation contract would be voided as well.
There were other issues too, such as ensuring that water prices wouldn't exceed official government rates, maintaining a stable supply of water to residents, and meeting water quality standards.
After some back-and-forth, the two sides finally reached an agreement three days later.
The final cooperation plan
was for Suiren Company to receive a thirty-year sanitation contract in Hui City at an annual fee of 514 million.
Under the additional terms, Suiren Company would purchase 20% of Hui City's water company, including its wastewater treatment plant, for five million, and receive full management rights under a thirty-year operating concession.
The water company's profits would offset the sanitation contract fee, with any difference settled by refund or additional payment.
The various other terms included an exclusive gas operating concession, a 500-mu industrial plot priced at 100,000 yuan per mu, and a 100-mu residential plot priced at 1.3 million yuan per mu.
The news couldn't be kept under wraps once the cooperation agreement was signed. Pengcheng, which had been agonizing over its decision all along, found itself in an even more passive position.
Suiren Company moved quickly, immediately sending people to Hui City to establish a branch. Lin Baijie then brought three hundred million in funds to Hui City to oversee the branch's operations in person.
After securing the industrial plot, the construction company that had worked with them before landed the first phase of the project.
Ever since working with Suiren Company, that company had found the partnership exceptionally rewarding. Compared with clients who dragged their feet, Suiren Company was strict with its requirements but never delayed payments for construction work.
So as soon as it heard about the new project, it immediately headed to Hui City with its crew and threw itself into construction.
Meanwhile, Lin Baijie also began taking over Hui City Water Affairs Company. As soon as he secured the company, he immediately began auditing its accounts and sorting out all its operations.
Thanks to all my dear readers for your support, and thanks to the readers "Qingtianyi" and "ZACK Yang" for the tips (ω｀)
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