14/31/5
:
-*
FUSS (Trade)
Copy for A
IAL
CONFIDENTIAL
Mr. Stuart (FCO)
Reference
125B
Mr Glaves-Smith Mr Cotterill
Discussed with hard hwäsch
тем
& Mr G
Smith PIA
You should see the attached telegram from our Embassy in Japan about a call made by my opposite number, Mr Ozu of MITI; I also attach my reply. The telegram from Japan was later amplified by a letter (copy attached) from the Commercial Department of the Embassy. It is interesting that the Japanese Government are still following the line they suggested early in the year, that the Mass Transit Scheme should be tackled by a joint consortium. You will notice that they now claim that they have persuaded Mitsubishi of the advantages of this approach.
2.
Our position must remain the same in that the main aim of the next round of talks is to demonstrate to the Hong Kong Government that a consortium approach is the best from their point of view and at the same time for the British consortium to qualify for serious consideration after the June round. I confirmed in an informal discussion with the top people in GEC that this was equally their view. In this discussion I had the benefit of a report from Mr Lewis on his visit to Hong Kong.
3. As they get down to preparing their next submission, GEC seem much more confident about taking on the entire job and if the June talks suggest that they could do this at a profit they will pursue this aim. On the other hand, they want to keep their options open and will clearly be ready to break quickly if the situation warrants it. They cannot see at this stage how worthwhile negotiations can begin between themselves and either the Japanese or the Italians. They feel that discussions would at present be meaningless as no doubt both sides would want to take the most interesting pieces of the business. They feel that the natural point for a merger is when indications of prices have been given to the Hong Kong Government by each contender. On the M and E side they will be submitting a series of prices for individual compon- ents of their offer based on the consultants report. They presume that the other contenders will be doing the same. From a comparison of these the relative merits of each other's tecnnology and price should begin to emerge and discussions might then be brought about by the Hong Kong authorities as much as by a wish on the part of the Japanese or of GEC. The GEC view is that this approach applies much more to their side of the contract than the civil side.
4. On this basis I think that my immediate aim is to keep Mr Ozu in play, without of course any commitments, but to reinforce to him that at this stage we are fully behind the single approach.
5. If it is at all possible I would like to have a word with you and Mr Glaves-Smith before I leave for Vienna at the week-end.
A Foll
ECSU
31 May 1973