B
CONFIDENTIAL
-6-
6.
:
(d) On paragraph 5, Mr. Haddon-Cave thought the British
Group would equally have had to incur expenditure on a design exercise if the Government had followed normal tendering procedures. Mr. Scott pointed out that the financial outlay would be quite exorbitant for a project as large as the MTR, and that, in a competitive negotiation, there was a real danger of valuable know-how being supplied to the later benefit of a competitor. Mr. Codd added that, judging from information so far received, the cost of detailed
E & M design work might be in the region of £700,000.
(e) Mr. Haddon-Cave said that, as a general point, he did not defend the concept of a pre-determined ceiling price. But the concept was essential as a matter of practical government, and, in view of the results of the MTSG's cash-flow projections, the Government had to seek certainty rather than cheapness. Mr. Scott said that, basically, the E & M sub-group had found it conceptually difficult to apply a financial limit to unforeseen (and unforeseeable) circumstances.
Mír. Newall delivered the civil engineering sub-group's
His text is at Annex B. The following comments were
made in the course of delivery:
response.
(a) On paragraph 1 of the response, Mr. Robertson said he
accepted that any variation which the client might
decide to make to the overall definition of the system
should not be to the contractor's account.
(b) In relation to paragraph 6 and 7, Mr. Haddon-Cave said
the significance of the sequence set out in the annex to his letter of 1st August lay in the order of events
rather than in the timing of each step in the sequence.
CONFIDENTIAL
Contd/...