Meeting summaries

After Easter week we are back and able to sum up some of the meetings and the information we gave and the questions we answered.

We'll begin with certain issues surrounding delays.

1. Force Majeure (FM)

At Tecnicil we are comfortable with the issues surrounding FM. Bear in mind that FM is NOT necessarily an acto of God, as many people seem to believe. FM is ANY loss to production produced by something beyond ones control.

The sand supply issue that many people seem to trivialise or suggest was easy to fix was very problematic. We had an agreement to use the sand on Sal Island and this agreement was broken. However, we did not then just nip out to the nearest building supply company to buy some more.

First of all we tried to sit down and renegotiate the agreement because we had sand stockpiled. These negotiations took a long long time and we were not successful. So we then had to begin the purchase process again. This can take time in and of itself. Once purchased it has to be imported again. And meanwhile we then have to reprogram the building works on site.

Anyway, all of this notwithstanding, we were aware that there was a lot of negative feeling amongst our client base because of our invoking FM so we decided to try and find a middle ground solution.

With Phase I communities the FN would have given us a delivery date of March 30th, 2009 and without FM we would have an outside date of Decemebr 31st, 2008. So we talked this through with the different client lawyers and agreed upon the date in the middle of this to use as a cut off point. So from February 15th 2009 all Phase I clients began accruing compensation.

For Phase II communities the cut off point WITH FM would have been September 30th 2009 and without FM it would be June 30th 2009. So once again we took the middle position and started the compensation for delays on August 15th 2009.

I hope this makes sense and would encourage you to contact us via info@tecnicil.com if you have questions or doubts after reading this.

2. Compensation levels

The compensation for delays is paid according to the European tracker rate known as Euribor. Euribor is currently at just under 1% and we apply Euribor at 6 months (For full information on Euribor please look here: http://www.euribor-rates.eu/

Also in the spirit of compromise we had applied the compensation rates in a slightly different way for the first 45 days.

For Phase I clients the compensation is calculated as follows:

1. February 15th to March 31st. All amounts paid to us so far at Euribor +5%
2. April 1st until 28 days after notification for deeds at Euribor +10%

For Phase I clients, please bear in mind that this does only run until 28 days after your notification for deeds which may have happened some months ago. So if you have not gone to deeds yet it does not mean you are still accumulating compensation.

For Phase II clients the compensation is as follows:

1. August 15th to September 30th: Euribor +5%
2. October 1st to 28 days after notification for deeds: Euribor +10%

Compensation for delays on Phase II is currently running therefore at Euribor +10% on the payment made to date.

To provide some examples. For investments to date of:

For 25,000 Euros you receive 229,16 Euros a month
For 50,000 Euros you receive 458.33 Euros a month
For 75,000 Euros you receive 687.50 Euros a month
For 100,000 Euros you receive 916.67 Euros a month

This compensation will be deducted from your final payment.

3. Water and electricity

There are now NO further issues with water and electricity on the site. There are many clients now who have organised this. It should be underlined that this needs to be done now by yourselves or via your representatives. We would recommend the use of a third party company such as the snagging companies as they only charge around 50 Euros plus the connection fees themselves. However, we are trying to solve the issue with Electra surrounding the necessity or not of a power of attorney for this.

Please allow me to insist one more time, Tecnicil have resolved all issues now with Electra but the actual contract, ie the connection of the system to YOUR apartment can only be made by yourselves or your representatives.

4. Completion dates

Many of you have seen the photos on the Picasa photo album we have (http://picasaweb.google.com/VilaVerdeSantaMaria) and you can see that we are in the final stretch now for Phase I. The final community for Phase I will be Ficus and that is set for June.

Phase II, which is only 4 communities, remember, will be totally finished by September / October 2010. You will be completing before the end of 2010.

Snagging will begin on Phase II units by the end of the summer. Please look at the photos and you should be able to see the different advances we are making.