DRAFT IV
w/2619
2nd November, 1973
ANGLO-ITALIAN RESPONSE
+7
You have advised us that a pre-emptive bid for the
construction of the Mass Transit System has been received and
validated. Before this news reached us we had started discussions
with the (Italian/British) 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 indications
are that the combined group will be capable of meeting "the
Desiderata" 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 your assessment of a
suitable fare structure and the resulting cash flow.
The members of the newly-formed Anglo-Italian Group will
be as follows:-
Intermetxo
GEC-Elliott Automation
Costain Civil Engineering
Tarmac
Balfour Beatty
../..