a
93160 G.F. 316
SECRET
ANNEX B to XCS(73)8
PROPOSALS RECEIVED FROM THE JAPANESE CONSORTIUM
Part I Summary of Proposals
Consortium's Organisation
The Japanese Consortium comprise 56 leading Japanese companies under the co-sponsorship of Mitsubishi Corporation, Mitsui & Co Ltd and Marubeni Corporation. They are a national consortium supported by the Japanese Government. They are represented in Hong Kong by Jardine, Matheson & Co Ltd, and they have appointed Jardine Fleming & Co Ltd and Morgan & Cie International SA as their financial advisers.
2
Should they be awarded the contract to construct and equip the MTR, the Consortium will establish a wholly-owned subsidiary company in Hong Kong to assist in handling their Hong Kong corporate affairs.
Contractual Arrangements Proposed
3
The Consortium propose to negotiate a lumpsum fixed price contract in US dollars for the detailed design, construction and equipment of the first four stages of the MTR, as well as for project co-ordination and management.
4
They propose generally to adopt standard international conditions of contract, but have specified a number of special requirements, the main ones being that:
5
(a)
(b)
the Hong Kong Government should give an undertaking to exempt all payments under the contract from any exchange controls which might be imposed during the contract period;
the client should provide free of charge the necessary work, storage, workshop and camp sites, including land for the accommodation of expatriate workers, to enable the Consortium to undertake construction;
(c) having given six months' advance notice of their intention to commence work on a particular section or site, the Consortium should be entitled to claim compensation if work cannot commence on the specified date for reasons beyond their control (e.g. the client having failed to make the necessary work sites or storage areas available); and
(d)
there should be no restrictions on the importation of workers from sources outside Hong Kong (principally from Japan).
The Consortium would be prepared to provide a performance bond and to accept a bonus/penalty clause in the contract, subject to agreement on the terms and conditions thereof.
SECRET
.... Pricing