AKIOD
i
Hong Kong Mass Transit Scheme
W/327
Mr Hochfelder said that this project had been selected for the agenda, not so much to seek advice on any particular point, or because an impasse had been reached, but because it was an interesting project which gave an insight into the type of project which was dealt with by Overseas Projects Group. If the Panel had existed earlier the Overseas Projects Group would have sought its advice on this project. Since OPG (73)8 had been written, the Japanese pre-emptive bid had been accepted as valid by the Hong Kong Government although it did not meet all the desiderata laid down by HKG. For one thing, it insisted on a Government guarantee. As a result, a counter-bid by an Anglo/Italian consortium would be put in before the end of the month the period for counter bids having been extended to 45 days. The Anglo/Italian counter-bid would not meet all the deside- rata of the HKG but it was thought that HKG would not be in a position to refuse this counter-bid.
Mr Jackson felt that in its short life the Advisory Panel had made a valuable contribution and he thanked Mr Francis for his efforts on the civil engineering side. As a result of the discussions between the Anglo/Italian consortium, a letter had been drafted to send off to HKG. He would like to ask for maximum support by Her Majesty's Government in ensuring that steps were taken by HKG to give an opportunity to embark upon an evalua- tion of a firm price based on 1974. The Japanese bid failed to meet the conditions laid down by HKG for two reasons; firstly it was above the ceiling price insisted upon by HKG, and secondly, it insisted upon a guarantee by HKG.
Mr Cotterill said that there had been inter-Governmental contact and he had no doubt that every possible step to ensure the success of the Anglo/Italian bid would be taken. The HKG would be unwise to turn it down. This was an interesting case and one which was unique in the way it had been put together over the last 18 months. He himself had started it off by writing to the Foreign
1
IN CONFIDENCE
com.comwedren once, other Government Departments and the companies at present involved, as a result of which a British bid had been put forward supported throughout by London Transport. Ministers were in touch with the situation and the project was interesting because it was so large and so significant. He hoped that political factors might convince the HKG that it would be unwise to disregard the UK bid and should at least give it fair consideration.
Mr Francis asked whether there was any specific knowledge. of the Japanese Government underwriting the Japanese
Mr Cotterill said that it had been alleged that the
bid.