Japanese Government were doing this as a form of invest- ment. The company which it was proposed to set up would be funded from Japan as a long term investment. About 50 firms were associated with the Mitsubishi Group and they had a great deal of money to invest. Mr Francis said that at a meeting of members of the construction industry with the Prime Minister, the question had been asked whether the British Government were also prepared to consider such action.
Mr Jackson said that this was a very important project in which he had been involved about 18 months ago when he had strongly recommended that the British should make a deal with the Japanese. This was very sensitive ground however, and his advice had been rejected in favour of a 100% British bid. He still thought that the wrong decision had been taken and if the Panel had been in existence at that time he would have given strong advice that a deal should have been made with the Japanese. The Japanese wanted this desperately at that time and we could have made a much better deal with them than the present one with the Italians. Instead of negotiating from a position of strength, the UK was now negotiating from one of weakness.
Mr Garbutt said that both the British and the Japanese wanted to get one of these jobs to their credit as had the French already. One break-through in a project of this kind could open up the gates to a flood of further contracts.
Mr Hochfelder said that one point in favour of joining forces with the Italians was that the UK would get a larger share of the job if it were Anglo/Italian rather than Anglo/Japanese.
Mr Francis thought that this project was more viable than the Teheran underground project and that it was perhaps a matter of judgment. Had he been asked for his opinion, he would have backed a British bid in view of the fact that Hong Kong was British.
Mr Jackson agreed that this was a big job in all senses and if things went wrong it could ruin even the biggest company involved, but he thought also that there were
IN CONFIDENCE
lessons to be learned from it. Originally the British construction industry could only have secured 123% of the job, and it was thanks to the efforts of Mr Francis that it had been increased to 25%. If the construction industry were too busy, it should have made it known at the beginning.
The Panel agreed that the change of events should be noted, there being nothing further to be done at this stage. Possibly some diplomatic pressure at the right time and in the right amount should be considered.
w/327