Engineering Procurement Construction (EPC) fee

  The leaders of the Hanhua factory also saw the prosperity of the service company with joy. At the factory affairs meeting, Jiang Manqing proudly announced that this year's year-end bonus had been settled, and each worker could get up to 50 yuan at most. This money was all saved by the service company turning losses into profits for the factory. The 50-yuan bonus was not a small sum in those years, especially for dual-income families, who suddenly got 100 yuan. What a prosperous year it would be!

  "I'd like to clarify that Kobayashi's attitude towards the service company was very upright. The service company used equipment and materials from the factory, and Kobayashi settled all of these with the factory at cost price. What's more, even when their workers took away scrap iron from the factory's waste heap, they paid the factory the purchase price for it. I think it's quite rare to be able to do things this way," said Jiang Manqing.

  "This is indeed not easy." Factory director Chen Weiguo said, "Originally, we set up a labor service company just to solve the employment problem of young people waiting for work. They took some materials from the factory and used some equipment, which was normal and allowed. But Xiao Lin can do this, in a big way, it's just public-private distinction, maintaining national interests. Our factory is a state-owned enterprise, while the labor service company is considered a large collective. Strictly speaking, the large collective enterprises occupy the property of state-owned enterprises, which is also considered to be digging at the foot of the country."

  Party Secretary Zou Shicheng also nodded and said, "Being able to do this is really not easy, which shows that Xiao Lin's ideological awareness is very high and can be fully trusted."

  "This issue is not that simple. I've discussed this with Xiao Lin before, so I know his thoughts are not just about this one point."

  "What else does he have in mind?" Chen Weiguo asked.

  "He's now settling accounts with the factory so clearly, it's as if he's treating them like his own brothers, making sure everything is accounted for. He's not taking advantage of the factory now, and in the future, the factory shouldn't think about taking advantage of him either. This young man is really good at calculating accounts."

  Chen Weiguo disagreed: "This is just Xiao Lin thinking too much, after all, he's still young. With such a big factory, would we still calculate the money of these few unemployed youths? They don't want to take advantage of the factory, I think it's already somewhat embarrassing. How much money has the Labor Service Company made so far?"

  Jiang Manqing replied: "The profit is over 50,000 yuan. After deducting salaries and other expenses, there's still a profit of over 20,000 yuan."

  "Look, look." Chen Weiguo said, "It's just a profit of over 200,000 yuan, our factory has an annual output value of at least over 20 million yuan, who cares about his 200,000 yuan?"

  "Everyone should remember that the service company was in Xiao Lin's hands for less than half a year. Originally, it couldn't even make a penny, but now it has already made an output value of 700,000 to 800,000 yuan, with a pure profit of over 200,000 yuan. I think, at this development speed, in two or three years, making tens of millions of output value per year is also possible, and by then the profit will be at least 800,000 yuan."

  "Will there be such a big profit?" Zou Shicheng was somewhat surprised. A profit of 100,000 is not something to be taken lightly.

  "Didn't Kobayashi and the factory sign a contract at first, which stated that he would get a share of the profits?" Liang Guangping thought of something and couldn't help but ask.

  Jiang Manqing said: "It was like this. The agreement signed at the time stated that his contracted target was to make the labor service company self-sufficient and profitable. If he failed to achieve this, all his bonuses in the factory would be cancelled. If there were profits, for the part within 200,000 yuan, he wouldn't get a single cent. For the part exceeding 200,000 yuan, he would take 50% as contract fees."

  "Such a high proportion?" asked Zou Shicheng.

  "This will also be passed by the factory meeting." Zhu Tiejun said, "The main thing is that when signing this agreement, no one would think that the service company can still make a profit. At that time, it was thought that being able to break even was already very good. Who would have thought that Xiao Lin actually had some tricks up his sleeve and could make such a huge profit?"

  Zou Shicheng counted on his fingers: "He has made a profit of over 200,000 yuan in just half a year. Next year, he will make at least 400,000 yuan in profit, and by the end of the year, he will have taken out 100,000 yuan in management fees alone. Doesn't this go against policy?"

  Li Guangping said, "This is also what we agreed to with others at the beginning. The country is also encouraging some people to get rich first. In rural areas, contracting and paying enough to the state and leaving enough for the collective, the rest belongs to individuals. Our factory should be the same. I think if Xiaolin really becomes a ten-thousand-yuan household, we should feel happy."

  When Liang Guangping spoke up for Lin Zhenhua, everyone was no longer surprised. When Lin Zhenhua first returned to the factory, Liang Guangping had the most objections to him, but over this period of time, his attitude has made a 180-degree turn. As for the reason, everyone also tacitly understood that since Lin Zhenhua got acquainted with that wealthy friend, he would often receive some rare industrial products from some inexplicable channels, and each time he would give a share to each factory leader. Liang Guangping had always been one to take things from others, so after getting benefits from Lin Zhenhua, speaking up for him was normal.

  Jiang Manqing said: "Actually, there's no need to wait until next year. The end of the year is approaching soon, and this year's contract fee should be settled now. Xiao Lin promised an annual profit of 20,000 yuan, so for half a year, it should be calculated as 10,000 yuan. The service company's profit is over 20,000 yuan, after deducting 10,000 yuan, the remaining amount should also let Xiao Lin take half as the contract fee, which is reasonable."

  "That's five thousand yuan?" asked Zou Shicheng.

  "Not just 5,000, but around 7,000." Zhu Tiejun interjected, he had always been very concerned about Lin Zhenhua's dynamics, so he understood the profit of the service company relatively clearly.

  "Are you really going to let him take away 7,000 yuan?" Chen Weiguo said, "This is too blatant, isn't it? Even if the authorities don't ask questions, the masses won't agree."

  "I'm also worried about this," said Jiang Manqing. "Fortunately, Little Lin hasn't mentioned this matter yet, and I don't know what he's thinking."

  Zhu Tiejun said: "Xiao Lin's idea, he discussed with me, he said that he wouldn't take a single cent of this money."

  "Is this really happening?" Liang Guangping couldn't believe it, 7,000 yuan was a staggering amount, even for someone like him who earned over 80,000 yuan in salary as a leader, it would take seven or eight years to earn that much money, and yet Lin Zhenhua didn't take a single cent?

  Zhu Tiejun said, "That's right. However, Xiao Lin said that this money belongs to him in terms of ownership. He plans to take out a portion of the service company's profits as bonuses for temporary workers and leave the majority to expand reproduction. He said that his contract fee is invested personally in the service company, and in the future, the service company will calculate his shares."

  "What does this mean? Does he want to be a capitalist, operating in a public-private partnership?" Zou Shicheng was getting annoyed. If Lin Zhenhua took the money away, he would only consider whether it complied with regulations or not, but Lin Zhenhua wanted to leave the money as an investment, which touched his sensitive nerves.

  Zhu Tiejun said: "I'm not very clear about this issue, our service company is a large collective in nature, and the assets originally belonged to all laborers collectively. Now everyone works together, creates profits as inputs, so it should be calculated according to the proportion of everyone's input, Xiao Lin personally wants to invest more, I don't know if policy allows it."

  Jiang Manqing said: "I haven't seen any relevant policies, mainly because our service company didn't have many assets to begin with, just an ice maker that's not worth much money. Now if they want to turn profits into investments and shares, the assets will keep increasing in the future, at which point we'll really need to consider policy issues. If a capitalist emerges from this, it won't be good."

  Zhu Tiejun said: "I think that things should be viewed in a nuanced way. Xiao Lin voluntarily took out the dividends he was due and invested them in production, expanding the collective's asset scale - this is a good thing, we should encourage it. As for becoming a new capitalist, I think our thinking shouldn't be too rigid, isn't the central government now encouraging multiple economic forms to coexist? Why can those hoodlums who have been released from prison open up a shop and become individual entrepreneurs, while our own comrades can't go into business? If in the future only people with poor ideological quality get rich first, what kind of country will we become?"

  Zou Shicheng said, "But after all, Kobayashi is still a formal worker in the factory and also an official who has been appointed to take charge of work. It's not quite right for him to hold two positions at the same time, being both a worker and a capitalist. Moreover, he is still a probationary Party member, how can he suddenly change into a capitalist?"

  Chen Weiguo interrupted, "Old Zou, Old Zhu, I think discussing this matter like this won't lead to a conclusion. The Labor Service Company is willing to expand and reproduce, which is a good thing, we should support it. As for the issue of Xiao Lin's contract fee being invested in reproduction, it's best if we listen to the superior leadership's opinion and see what the policy is like. Such a big matter, our factory can't make decisions on its own."

  "I agree with Old Chen's opinion." Liang Guangping raised his hand and said, "It's better if Little Lin doesn't take out the contract fee. In case the country's policy doesn't allow it, the equipment formed by investment is still here, and everyone won't make mistakes. If he takes it away and spends it on food, drink and play, in case the country investigates and he can't return it, that would be a crime punishable by imprisonment."

  Chen Weiguo said, "Let's do it this way, Old Jiang. Ask the finance department to calculate how much of the contract fee Xiao Lin should get and make an entry in the account. If national policy allows it, we'll calculate his shares based on this account in the future. If not, we can list a project from the factory and give Xiao Lin a bonus as compensation."

  "This matter, let's all keep it under wraps. If it gets out, it won't be good for anyone." Zou Shicheng warned solemnly.