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TO IMMEDIATE FCO TEL NO 1316 OF 16 NOVEMBER. 1973
M.I.P.T.
FOLLOWING PERSONAL FOR SIR DUNCAN WATSON,
FOLLOWING IS TEXT OF LETTER.
RECEIVED IN REGISTRY Nɔ. 52
19 NOV 1973
HKK 21/4
QUOTE YOU HAVE ADVISED US THAT A PRE-EMPTIVE BID FOR THE
CONSTRUCTION OF THE MASS TRANSIT SYSTEM HAS BEEN RECEIVED AND
PA
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VALIDATED. BEFORE THIS NEWS REACHED US WE HAD STARTED DISCUSSIONS WITH THE ITALIAN GROUP TO FIND OUT WHETHER THERE WAS A BASIS FOR MERGER. WE FELT THAT THE RESPECTIVE, AND IN SEVERAL WAYS VERY DIFFERENT, STRENGTHS OF THE TWO GROUPS COULD PROVIDE A FORMIDABLE CHALLENGE TO THE OTHER TWO COMPETING GROUPS. SINCE WE RECEIVED NEWS OF THE VALIDATION OF THE PRE-EMPTIVE BID WE HAVE ACCELERATED THESE DISCUSSIONS AND EXPLORED IN DEPTH THE MERITS AND PROBLEMS STEMMING
FROM SUCH A MERGER.
WE ARE WRITING TO LET YOU KNOW THAT THE TWO GROUPS HAVE REACHED AGREEMENT UPON ALL ASPECTS OF THE MERGER AND WE ARE NOW IN A POSITION TO PUT FORWARD AN ANGLO-ITALIAN PROPOSAL AS AN ALTERNATIVE TO THE PRE-EMPTIVE BID YOU HAVE RECEIVED.
CONSIDERABLE PROGRESS HAS BEEN MADE IN PLANNING THE PREPARATION OF A COMPETITIVE FIRM PRICE BID AND THE COMBINED GROUP BELIEVE THAT THEY WILL BE CAPABLE OF MEETING QUOTE THE DESIDERATA UNQUOTE AS MODIFIED IN THE MEETINGS HELD AT THE END OF AUGUST AND BEGINNING OF SEPTEMBER. ALTERNATIVE PROPOSALS WERE CONSIDERED BUT REJECTED OWING TO THE STRESS LAID BY YOU UPON THE REQUIREMENT FOR A FIRM PRICE RELATED TO YOU ASSESSMENT OF A SUITABLE FARE STRUCTURE AND
THE RESULTING CASH FLOW.
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THE MEMBERS