Sawood Civil Engineering (SCE) is a listed construction company. Its head office is in the capital city, Vaasa, of the country of Nogoland. Nogoland has two neighbouring countries, Alpha and Omega. The countryside in both Alpha and Nogoland is generally flat. In Omega, there is a large range of mountains (the Tamoah mountains) which separates its Eastern region from the rest of the country. All three countries use the same currency, the called eco ($).

The board of SCE comprises 50% executive directors and 50% independent non-executive directors. The senior board members are:

Chairman

Chief executive

Senior non-executive director

Joe Taliba JonBuston Amos Law

SCE’s core business is to provide support services, such as upgrade of electricity networks and road renewal and maint nance, in all three countries. However, it has also undertaken road construction projects of increasing size and complexity. Initially, SCE carried out most of its major construction projects in Nogogland, its biggest project there being a ring road around the city of Vaasa. SCE has also started to develop a portfolio in Alpha, the biggest development there being a road between Bank City and Motown, which was completed in 20X0.

To date, SCE has not carried out any road construction projects in Omega. However, an opportunity has arisen for SCE to tender for construction of a major road in Omega, which would be the biggest project which SCE has undertaken to date. The following exhibits provide information relevant to SCE:

Exhibit 1: Extracts from the most recent annual report of SCE.

Exhibit 2: Press release of the announcement of the new road in Omega.

Exhibit 3: Forecast revenues and costs for the construction of the new road in Omega.

Exhibit 4:Outline contents of the project initiation document (PID) and a summary of the operational issues section of the PID.

Exhibit 5: Transcript of an emergency meeting at SCE’s head office.

The case requirements are as follows and you will be told which role you are taking in each task.

1 You are Amos Law, the senior non-executive director of SCE.

SCE has been invited to tender for the contract for the construction of the new road in Omega, as the preferred partner of Omega’s government. SCE’s finance team has drawn up financial forecasts for the project. However, you have doubts about the contract and you want it to be discussed thoroughly at SCE’s next board meeting. You are particularly concerned with whether SCE will be able to fulfil the criteria stated by Omega’s transport minister.

Required:

Prepare a report for the board meeting, which:

(a) Examinesthe financial and non-financial issues which will affect the final decision of whether to accept the contract to build the road in Omega. The report should also discuss the difficulties SCE may face in fulfilling the criteria stated by Desmond Otieno, the transport minister of Omega

(26 marks)

Professional skills marks are available for demonstrating analysis skills in identifying information which is relevant to the decision and also commercial acumen in identifying difficulties for SCEarising from the criteria .stated by the transport minister