OVERSEAS FINANCE & PROJECTS DIVISION
BRITISH OVERSEAS TRADE BOARD
DEPARTMENT OF TRADE AND INDUSTRY
1 VICTORIA STREET
CONFIDENTIAL
LONDON SW1H OET
41127/9
29 December 1972
A C Stuart Esq
Hong Kong & Indian Ocean Dept
FCO
LONDON SWI
01 222 7877
Garter
259
Ext 3:
© 2
Dear Andrew Sub
HONG KONG MASS TRANSIT SYSTEM
Sep minils
Les 2/1
Mr Codd of GEC called on me yesterday morning for a general talk about this project, in the course of which he raised a question about possible Chinese participation which I said I would mention to you.
Mr Codd's point was this. He believes, but does not know for certain, that some Chinese participation in the British hi would be welcomed by the Hong Kong Government. He also LEintr. but again has no ground for being certain of the point, that the Chinese might be more willing to cooperate with the British consortium than with the Japanese consortium. On these premi: both of which would need checking, it could strengthen the British consortium's competitive position to include some Chinese content in their bid. Specifically he has in mird bulky materials (cement and steel rails), possibly some manufactured components (tunnel segments) and Chinese labour. (The reason for this last is that labour will have to be imported if the project is to be completed within the time scale, and Chinese is obviously the most accessible and probab the cheapest; on the other hand Mr Codd appreciates that the Chinese Government might have objections to Chinese workpeople moving to Hong Kong.)
This is obviously a tricky question to handle. From the commercial point of view, there would appear to be advantage to be gained from a limited Chinese participation on this basi- but it would need to be established that the Chinese were co prepared to participate and only with the British consortium. There would be no merit in it if the Chinese were prepared to do the same for the Japanese consortium or anyone else. There is also the political question for the FCO to consider.
I confess that I do not see at the moment very clearly how we could take this further. Would you think it right to take the
1.
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