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CONFIDENTIAL
270
264
Mr Youde 27/11
PS/MD
280
A.R
dr. Hruar has see
PA
"ZBIEH
HONG KONG MASS TRANSIT SYSTEM
1.
The British bid for the £600m Hong Kong underground railway
is not in good shape. The original British Consortium collapsed,
mainly because they were unable to meet the Hong Kong conditions
of a fixed price with a HK 5,000m ceiling. Subsequently a
Japanese pre-emptive bid has been validated.
particular conditions, but demands a guarantee from the Hong Kong
Government, and is denominated in Yen.
This meets these
2. The Hong Kong Government have bent their own rules to
accommodate these changes, and there is a clear implication that
they would have to give similar or parallel concessions to us.
But they have demanded that if we or the other competing
consortia are to stay in the game, a competing bid which they
accept as valid must be submitted within 45 days of the validation
of the Japanese proposals.
3. In this situation, and with some encouragement from the
!
Governor, the British and Italian consortia have got together and
have produced a new offer, which they have shown to the DTI for
advice before it is submitted to Hong Kong. I believe this offer
as it stands has very little chance of being "validated", let
alone finally accepted by Hong Kong. It does not name a price,
CONFIDENTIAL
/and