Episode 139: Montreal
However, additional consultations remained.
A fierce underwater battle was unfolding between Daese and Taeyang over how to implement the project.
Taeyang Group first proposed establishing a local branch in Jeddah, Saudi Arabia.
“Wouldn’t it be better to establish a separate corporation to dispatch management personnel from the head office and hire necessary personnel? If we set up a joint branch in Saudi Arabia, we can receive additional tax benefits. We can also promote administrative convenience, such as customs clearance procedures.”
Lee Chang-jin immediately objected to the suggestion.
“There’s no need for that. We have a branch in Dammam, so we can just move the office to Jeddah. Our legal representative, Tae-hoon, is well-versed in local tax laws and has a close cooperative relationship with local law firms, so they can cover most of it.”
“Well, that’s difficult. We are the lead manager, so it wouldn’t be right to reverse the order, would it? We believe that it is reasonable to integrate customs clearance and tax processing through a newly established joint venture. It’s a way to minimize project risks, so please cooperate.”
“Hmm. We also find it difficult to accept that condition. We are a partner, not a subcontractor. I think it’s a bit early to talk about that level of trust.”
If a representative corporation led by Taeyang Group was established locally, Taeyang Group would naturally control the construction cost and related expenses.
In that case, Lee Chang-jin would be reduced to the position of getting approval from Taeyang for every little thing, like a breadwinner whose salary account was confiscated by his strong wife.
From Daese’s point of view, such interference was absolutely unacceptable.
As the two sides were in a fierce confrontation, Lee Chang-jin proposed a compromise.
“Then let’s agree to have our own local branches instead of a joint branch. Instead, how about dividing the construction sections by company? In a shared implementation method. Dividing responsibilities and authority by company makes work easier and it is convenient to determine accountability.”
“Hmm. That’s not a bad idea. But how do you plan to set the construction boundaries?”
“Since you are the lead manager, why don’t you tell us if you have any thoughts?”
“Then how about this? We, Taeyang, will take care of the northwestern hilly area, and Daese Construction will take care of the southeast. It’s a bit of a difficult construction, but Daese has a lot of experience in mountain construction, including forest roads. It probably won’t be a bad proposal for you. We will compensate you for the cost by an additional 5%.”
“Good. Let’s do that.”
Lee Chang-jin readily nodded. It was decided that Daese Industries would be assigned the Abha area, and Taeyang Construction would take charge of the relatively low-lying hilly area, thus defining the boundary.
In fact, there was a reason why Taeyang made such a proposal. According to the results of the on-site investigation, the southeastern region was relatively high in altitude, and additional civil engineering work was required, so the construction cost was predicted to be at least 10% higher.
Looking at the immediate profits, Taeyang Construction seemed to have the upper hand, but Lee Chang-jin thought differently.
‘The construction may be difficult, but the view is better on our side. Surely, a premium will be attached when it is completed.’
Although the executives of Taeyang Group, who had not visited the site themselves, overlooked it, from the location Lee Chang-jin was assigned to, on a good day, the entire city of Jeddah, including the coast, could be seen.
Taeyang Group was outsmarted by their own scheme, but Lee Chang-jin pretended to be fooled.
There was no reason for Lee Chang-jin to refuse.
The remaining problem was the construction equipment. With the prospect of entering the Middle East, domestic construction companies had swept up the construction equipment that was on the market, making it difficult to obtain construction equipment.
“We have more than enough skilled workers to dispatch, but I think we’ll be short on equipment. We can manufacture and supply forklifts and excavators ourselves, but the time is tight to make the rest. It would be better to rent or purchase other heavy equipment separately.”
As Deputy Seo Yo-han said, in order to complete all the housing construction within the 30-month construction period, dozens of additional pieces of equipment were needed, including excavators, bulldozers, scrapers, and cranes, as well as equipment used in the Middle East.
The problem was that the overheating of the overseas construction market caused a severe backlog in the import and supply of heavy equipment. However, for Lee Chang-jin, this level of difficulty was already within the expected range.
“We don’t have to find the necessary quantity domestically, do we? We can bring it from abroad. Let’s go to Montreal, Canada.”
“Montreal? Why there all of a sudden?”
“Isn’t it obvious? There will be heavy equipment left over from the last Olympics in Canada.”
“Ah, the Montreal Olympics? But it’s been quite a while since the construction there was finished. Is the equipment still there?”
“Yes. I heard that the economy went downhill rapidly after the Olympics, and large-scale construction near the city came to a halt. The city’s finances are currently in a mess, and it doesn’t have the capacity to invest in SOC. This is something that Deputy Yoon personally went and checked.”
“Ah! I see.”
The construction company employees realized something at Lee Chang-jin’s words.
However, Goo Chang-dong, who was relatively ignorant, had a look on his face as if he had never heard of it.
“I don’t quite understand. Why don’t they just sell the used heavy equipment?”
“Well, in North America, it’s common to dispose of the equipment used in one construction project at the site when it’s finished. It is common practice to hand over the equipment that cannot be sold there to the client, or just leave it at the site.”
“No way, they just throw away perfectly good equipment?”
It was quite possible in North America, where labor costs were high.
Assistant Manager Kwak Do-hyun gave additional explanations to Goo Chang-dong, who did not understand.
“Haha, it’s a bit absurd, right? It’s surprising, but it’s true. In countries like the US and Canada, the land is vast, so transportation costs are expensive, and the repair costs incurred in the event of a breakdown are also quite high. Labor costs are so high. Considering work efficiency, it is much more advantageous to purchase new equipment.”
“But still, to throw away perfectly good things…”
“Haha, most of the construction projects carried out in North America already include the cost of purchasing equipment in the construction contract, so it doesn’t matter. From their point of view, it’s more convenient to use new equipment from the beginning than to waste time due to possible equipment failure.”
Lee Chang-jin smiled at Goo Chang-dong’s face as he finally agreed.
“The situation is urgent, so let’s hurry. You never know, other domestic companies might be thinking the same thing as me.”
Trudeau International Airport.
It was located about 20km from downtown Montreal.
As Lee Chang-jin got off the plane and came outside, Yoon Jeong-pil, who had been waiting in advance, came out and received his luggage.
“Thank you for coming all the way here, sir.”
“Ah, Deputy Yoon, it’s been a while. How have you been? You look good.”
Yoon Jeong-pil had gained weight as if he had eaten something.
“Haha, don’t even get me started. I went to Florida and came straight here, so I almost froze to death for a while. The daily temperature difference is so extreme… I would have frozen to death without long underwear and an electric heater.”
“Haha, it’s better than being stuck in the Middle East, isn’t it? It’s better than rolling around in hot water.”
“Haha. Manager Seo envied me. Everyone else is quite old, but I’m the only one who’s been left out, so I felt guilty on the way here.”
Before coming to Canada, Yoon Jeong-pil was put into Clark’s overseas training program and commanded the training camp.
It was called training camp, but since Clark planned the overall curriculum and provided convenience, there was not much for Yoon Jeong-pil to do when he went there.
Lee Chang-jin chuckled at the sight of Yoon Jeong-pil, who felt sorry for having enjoyed his vacation for a while.
“Don’t worry about him. He’s the type to complain while doing everything he needs to do. The Dammam side is finished once we deal with the construction cost settlement issue and the defect construction. The construction is complete, so there will be plenty of time. I heard he’s even started a new life in Saudi Arabia.”
Deputy Yoon, who was startled, asked back.
“Yes? Who’s the opponent?”
“You know who it is, Deputy Yoon. The one who was in charge of meals at our construction site cafeteria. Remember? The one who used to run a food stall.”
“Ah, are you talking about the tall one with good skin? You mean she wasn’t married yet?”
“Yeah. I didn’t know either, but she was a gold miss. She missed her chance to get married while working, and I guess they fell in love after seeing each other often.”
“Since when?”
“I heard it’s been over 8 months, didn’t you know?”
“Then you mean they were already in that kind of relationship before I went on a business trip? He always said he was lonely, but it was all a lie. He kept saying no, but he was secretly doing such a thing behind our backs.”
“Haha, so you don’t have to worry about him. More importantly, isn’t it time for you to start worrying about yourself, Deputy Yoon?”
“Haha. Well, I haven’t really dated much, so it’s a bit difficult.”
Yoon Jeong-pil scratched his head as if embarrassed.
Goo Chang-dong, who was looking at him with pitiful eyes, patted him on the shoulder and encouraged him.
“Bro, don’t say that. What’s wrong with you that you can’t meet a woman? If you need it, I can introduce you to someone.”
“Haha, have you guys eaten?”
“Not yet. How about you, Deputy Yoon?”
“Me neither. Then why don’t you take care of your hunger before going to the hotel? I have a reservation at a restaurant in Westmount. It’s famous for its lobster. Montreal is surrounded by sea, so the seafood is very delicious. It’s in season right now.”
“Oh, that makes my mouth water. Oh, by any chance, is there anyone here who is allergic to shellfish?”
“Of course not. We can’t get enough of lobster.”
“I love it too.”
Fortunately, everyone seemed positive.
“Then I’ll take you right away.”
The Westmount area in southwest Quebec was a densely populated area with restaurants and other shops.
The restaurant was located in the old town where Jacques Cartier Square is located.
Lee Chang-jin, who took off his coat, sat down first at the table where the table was set.
Goo Chang-dong, who sat down next to him, asked a question that had arisen while he was coming.
“But is this really the town where the Olympics were held? It’s quite desolate. I came here and saw that the roads were dented, and there were many places where the lanes were not repaired.”
It was a neighborhood full of gorgeous and wonderful buildings, worthy of its reputation as the ‘Paris of North America’, but for some reason, the old and stagnant feeling couldn’t be erased.
Many building entrances were blocked by chains or had rental signs on them.
Yoon Jeong-pil, who was tearing the pre-dinner bread, replied as if it were natural.
“Ah, that’s because of the Olympics two years ago.”
“What do you mean the Olympics are the problem?”
“The city of Montreal suffered huge losses because of the last Olympics. Due to the terrorist attacks at the previous Munich Olympics, the budget for security at the Games has increased 40-fold. Moreover, in order to meet the requirements of the IOC, most of the stadiums had to be newly built.”
“I don’t understand why they were so obsessed with the Olympics.”
Yoon Jeong-pil answered Goo Chang-dong’s question.
“Actually, it wasn’t a bad plan. From the city’s point of view, the intention was to boost the economy and revitalize the tourism industry through the Olympics. In fact, for several years during the construction, it did help revitalize the local economy. But unfortunately, the oil shock came after the Olympics, and the money that was invested with a lot of effort became a boomerang. I heard that the deficit is a whopping 1.23 billion dollars. It’s the highest ever in Olympic history.”
Deputy Goo, surprised by the enormous amount, clicked his tongue.
“1.23 billion dollars? They’re really irresponsible bastards. What kind of debt party did they have?”
“Exactly. Actually, the future is a bigger problem. Stadium maintenance and restoration costs will cost billions of won more every year. Thanks to this, the security situation is not good, and the economy is the worst. Local taxes have also increased tremendously, so these days people are moving to Toronto. It’s a vicious cycle.”
In fact, as a result of this incident, Montreal, which was the economic capital of Canada, was pushed back to the second city after Toronto, and it was not until the 2000s that all the debt was cleared.
It was as if they had only been paying off their debts for nearly 30 years, so it was an example of how a wrong policy could cause great damage to a region.
- To be continued in Episode 140 -
