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Unformatted text preview: project and be sure that the costs will not vary during the project. The disadvantages of this fixed costs are that the project may not be completed if they begin lose money and this represent expensive cost reimbursable contract. In consequence, the price to build de power plan will increase due to the risk. In this specific case, after the second bidding process, the Indian government accepted the French offer lower than the first offer, but still the project costs continued increasing. The geographical situation and the dispute in the territory make the project difficult to conduct smoothly. That’s why the article from the book says: "in order to offset the expenses of the project, the cost of the power by the plant has raise by over 500%” and they still don't have a completion date....
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This note was uploaded on 02/28/2012 for the course ECON EC311 taught by Professor Zahid during the Spring '12 term at ITT Tech San Dimas.
- Spring '12