CRPS 365 IMMEDIATE
YPHER/CAT A
FM HONG KONG 111035Z
KW
CONFIDENTIAL
CONFIDENTIAL
12 DELMÄ
нск
2114
350
TO IMMEDIATE F C O TELNO 1435 OF 11TH DECEMBER, 1973.
(364
PERSONAL FOR SECRETARY OF STATE AND SECRETARY OF STATE
FOR TRADE AND INDUSTRY.
THE EXECUTIVE COUNCIL DECISION WAS TO NEGOTIATE WITH THE JAPANESE, ALL THE COUNTER ARGUMENTS WERE CONSIDERED AND THERE WAS NO
TENDENCY TO UNDERRATE THEIR FORCE. INDEED IT WAS CLEAR
THAT IF THE ANGLO-ITALIAN CONSORTIUM HAD OFFERED A CEILING PRICE NEARER THAT OF THE JAPANESE, THE COUNCIL WOULD NOT HAVE ALLOWED A FEW PER CENT IN THE FIGURES TO DIVERT THEM FROM BUYING BRITISH IN
THIS INSTANCE. BUT THE GAP WAS TOO GREAT. INDEED IT WAS SO GREAT
AS TO CALL IN QUESTION THE VIABILITY OF THE PROJECT AND IT WAS
THIS THAT APPEARED CONCLUSIVE.
2. WE REALISE THE PITFALLS THAT MAY BE HIDDEN IN THE JAPANESE
OFFER. IN THE NEGOTIATIONS WE WILL SUBJECT EACH ITEM TO THE CLOSEST SCRUTINY, AND IT MAY BE THAT IN THIS PROOCESS THE NEGOTIATIONS WILL FAIL. BUT THE JAPANESE STUDY OF THIS WHOLE PROJECT HAS BEEN SO THOROUGH AND OF SUCH A LONG DURATION THAT I DO NOT HOLD OUT MUCH HOPE
OF THINGS GOING WRONG FOR THEM NOW.
3. IN RETROSPECT I WISH WE HAD AVOIDED THE SINGLE CONTRACT APPROACH WHICH COMMITTED US TO ALL OR NOTHING FOR THE UNITED KINGDOM.
BUT AT THAT TIME THE UNITED KINGDOM CONSORTIUM WAS RUNNING LEVEL. WE WILL NOT MAKE THIS MISTAKE OVER THE REMAINING STAGES OF THE
RAILWAY.
MACLEHO SE
COFIES TO
PS TO S. OF S. DTI
FILES
HKIO D
MR WRIGHT
FED
MR MARSHALL
TRE D
MR WILFORD
FRIVATE SECRETARY
PS/MK ROYLE
CONFIDENTIAL
PS/PUS
H