Traveling through the sword to engage in military industry

#320 - Everyone wants to be the boss

Shanghai.

The four great families of Sheng, Zhou, Liu, and Kang gathered together.

Around a large round table sat the heads of the four families and two foreigners with blue eyes and white skin.

It runs through the main coal and iron producing areas of Shandong, and the volume of freight transported is considerable.

However, the government's resources are now invested in the construction of main lines, and the construction of local railways is basically completed through local self-financing.

Due to the promotion of capital, the Railway Construction Committee, after listening to Ren Zhong's opinions and suggestions, conditionally opened the construction and operation of local railways to domestic and foreign capital.

In terms of price, the currently approved national unified price is 4 cents per kilometer per person for passenger transport; the freight price is 1 cent per ton-kilometer.

The Sheng, Zhou, Liu, and Kang families have considerable influence in Shanghai. The Jimin Railway Company, jointly established by them, injected 10 million yuan of original capital from each of the four families. After some efforts, they obtained the operating rights of the planned local railway line of Linji Railway.

However, relying solely on the four families was, to be honest, a bit overwhelming. After all, the construction of a railway and the preparation of locomotives were not small sums.

Therefore, the four families contacted foreign capital early on, Elco Company, which was selling steam locomotives all over the world, looking for investment opportunities. The two sides actually seemed to hit it off.

However, once they sat at the negotiating table, the two sides were no longer so harmonious.

“No, we must obtain 51% of the controlling stake. Otherwise, we will not accept a second option,” Williams said loudly, slamming the table, his face flushed.

When it comes to discussing interests, they will not budge an inch.

When Williams talked about equity distribution, he actually wanted to obtain control.

This was completely unacceptable to the four families.

“No, Mr. Williams, I think you have misunderstood a major premise. The basis of our cooperation is that we maintain the controlling stake. Only on this basis can we have the necessity to discuss further,” Sheng HuaiRen also refused to budge.

In the eyes of these prominent figures in Shanghai, if they could not obtain the controlling stake, everything would be equivalent to being led by the nose. For them, this was equally unacceptable.

Such a large investment would be a strain on the four families to raise together. However, this railway was too high-quality, and the freight volume along the way was very large, with several large coal and iron mines.

According to the Big Boy steam locomotive heads currently introduced, in terms of passenger transport, it can run at a speed of 75 kilometers per hour with 8 passenger cars; and in terms of freight, the maximum load of freight trains carrying coal and ore can reach 3,600 tons! The train speed can also reach 50 to 60 kilometers per hour.

The total designed mileage of the Linji Railway is 250 kilometers. Theoretically, the full fare for a fully loaded passenger train is 10 yuan, and 8 cars have a quota of 1024 seats.

Therefore, if a passenger trip has an occupancy rate of 80%, one trip will generate a gross income of 8,000 yuan. Running back and forth once a day will generate approximately 16,000 to 20,000 yuan in income.

In terms of freight, calculated based on a fully loaded train of 3,600 tons, running 10 hours a day will generate an income of 18,000 yuan per day. Investing in 20 steam locomotive heads, 2 for passenger transport and 18 for freight, can generate a gross freight revenue of approximately 350,000 yuan per day under ideal conditions, exceeding 10 million yuan per month.

In terms of investment, 20 locomotive heads plus train cars will cost approximately 80 million yuan. According to the current construction estimate of 400,000 yuan per kilometer for railway construction, the investment will be 100 million yuan.

As a major infrastructure project, the loan ratio they can obtain will not exceed 50%, which means they need to invest at least 90 million yuan in capital to build the railway and prepare the trains.

This is just the hardware condition. The railway maintenance and train service, as well as a large number of workers such as loaders, unloaders, and sales service personnel, will not be small. Seven or eight down, at least two or three thousand people. Although the wages in this era are cheap, averaging only a few tens of yuan a month, the cost also exceeds 100,000 yuan.

In terms of coal consumption, each train consumes approximately 18 tons of coal per day. Calculated according to the allocation coal price of 15 yuan/ton at this time, the coal cost will be over 160,000 yuan.

If you add water and the daily operation and maintenance of steam locomotives, it will cost at least 200,000 yuan more per month.

However, these are small money. The big head is the financial cost. The bank loan interest rate during this period is as high as 25% or more. The interest on a 90 million yuan loan will be 22.5 million yuan a year, totaling 1.875 million yuan per month. Adding capital depreciation, it will be a little less than 1 million yuan a month, so the hard cost of 3.5 million yuan per month is required.

The gross profit can reach nearly 6.5 million yuan. After deducting taxes, the net profit can reach 4 million yuan.

This is the ideal profit under full load transportation conditions. According to this calculation, there is hope to recover the cost in 5 years, and earn him 15 years during the 20-year operating period.

Of course, this calculation is quite rough. The construction of such a 250-kilometer-long railway will take more than 2 years to complete. The interest on the loans invested during this construction period must also be calculated. A 50 million yuan railway construction loan will have an interest of 25 million yuan in 2 years!

At least half a year under full-load transportation conditions can earn it back!

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So, to calculate more conservatively, there is still hope to recover the cost in more than 6 years.

This is already a very good business.

Therefore, in terms of equity, the first formal negotiation of the 4+1 meeting quickly fell into a stalemate.

Sheng HuaiRen announced a recess after insisting on the meeting for 2 hours without getting the other party to let go.

Allowing both parties to have time to calm down again.

At the same time, time was set aside for discussion.

“Lao Sheng, this foreign devil is not easy to deal with,” Liu ZhongWu, with a small mustache, said to Sheng HuaiRen with a solemn expression.

“More than not easy to deal with, I think he is sure to eat us,” Zhou LinQiang, the oldest next to him, also sighed.

“I think we should change our strategy,” Kang Qi, the contemporary head of the Kang family, blinked his small eyes, “The Liming Power Research Institute is introducing internal combustion locomotives. We might as well use this to put pressure on Williams, the foreign devil, and tell him that if we are forced, we will use internal combustion locomotives instead of their steam locomotives.”

“I think it’s feasible, Lao Kang’s idea is reliable!” As soon as Kang Qi’s opinion was put forward, it was immediately responded to by everyone.

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