Not just the right,— but the only decision
The Hongkong Government's decision to open negotiations with the Japanese consortium to see whether it can conclude a contract to build and equip the first four stages of the Mass Transit scheme must be welcomed for many reasons.
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Not only is it a positive next step hopefully the final one in the protracted discussions that have gone on for many months; not only have these discussions been shortened on carlier estimates; but the Japanese terms give definite hope that the capital costs can be held within a limit we can afford.
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SCMP
EDITORIAL
12/12/73
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This in turn may make all the difference between saddling ourselves with a costly lame duck doomed to run perpetually in the red and
based on viable scheme operating acceptable fare structure.
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Some Hongkong businessmen doubt whether, the Japanese consortium can make good its offer.. but representing as it does the cream of Japan's heavy industry it will be surprising, not to say commercially damaging in the extreme with so much potential business at stake, if it was offering us a commitment it could not keep.
As the Japanese consortium's proposal was the only one of the three which fell within the $5,000 million ceiling stipulated by the Government, clearly Hongkong must pursue these negotiations to see if a final contract can be concluded.
Let it be said, however, this will be a decision based entirely on commercial considerations — and indeed when we are talking of this kind of money there can be no other way.
There will be genuine regret that in this event British knowhow and expertise will play no part in British firm the scheme, except through_a_ representing the Japanese consortium in this Colony.
Particularly at this time of hardship in Britain, a major contract like this for UK industry would have been a tremendous morale booster.
Moreover Hongkong's strong and abiding links with Britain made it desirable that every consideration
to should be given keeping
this scheme within "the family," as it were.
But the crunch was not whether a mass transit scheme could be built, but whether it had a hope of being viable on the projections we envisaged. And in this case commercial considerations were paramount.
Indeed the most important aspect of the continuing negotiations will be this crucial point. We cannot afford to back a loser at any time but particularly with so much at stake and with the massive transport problems this territory faces.
If the Japanese finally clinch the issue, moreover, the second phase, which is likely to be worth as much as the first if not more by that time, will again be thrown open to competitive bidding with no certainty that it will be awarded to the winners of the first phase, or indeed that it will necessarily be a single contract award.
It was obvious from yesterday's long and detailed discussions in Executive Council that Hongkong made the only possible decision to pursue the negotiations with the group that seems most likely to give us the package which we can operate viably.
The possibility must be recognised that if these talks fail, while there may be a chance of one of the other two groups still being in the race, the more likely prospect is that by that time inflation = may have pushed the contract price cut of our reach.