CONFJDLA LAL
the demandeurs, is the contract for an underground
railway system for Hong Kong, whose initial stages
are worth about £400 million. The leading contenders
are a Japanese consortium and an Anglo/Italian
Group which has the full backing of HMG. A Japanese
preemptive bid has already been validated for
The first
negotiation by the Hong Kong Government.
Anglo/Italian proposals were rejected as inadequate,
in particular because they did not meet Hong Kong'u
requirement of a fixed price. The Group have agreed
to improve their offer and its presentation in time
to meet Hong Kong's deadline of 2 December. The
Governor is fully aware of the political implications
of being left with only a Japanese bid for such an
important contract. The DTI, with FCO and Treasury
support, have done everything possible to help the
British group get their offer into shape. We cannob
expect Hong Kong to give the contract to a British
L.
A
Group that is manifestly inferior. But once the Anglof
Italian proposals are accepted as being on an equal
footing, we can expect political and other factors
to be taken into consideration.
Among the relevant
factors are the points of friction described above.