GRS 265
PRIORITY
CYPHER CAT A
FM MOKYO 1405002
CONFIDENTIAL
CONFIDENTIAL
T
TO PRIORITY ECGD TEL NO EXCED 9 OF
REPEATED FOR INFO TO FCO.
RECEIVED IN REGISTRY No. 51 4 MARCH
18 MAR 1974
HKK 21|2.
;
tv/36
Mr Shind
Spoken
Pi speak
FOLLOWING FOR COTTERILL FROM MCGHIE. HONG KONG MASS TRANSIT SCHEME.
1. WEEDON AND WRIGHT SEEM SATISFIED WITH THE SEPARATE TALKS THEY
HAVE HAD WITH MITI AND REPRESENTATIVES OF THE JAPANESE CONSORTIUM.
THE JAPANESE THROUGHOUT MAINTAINED THE FICTION THAT THE BRITISH
HAD TAKEN THE INITIATIVE IN THIS APPROACH. WEEDON WAS PREPARED
TO GO ALONG WITH THIS. THE JAPANESE CONFIRMED THAT THEY ARE
THINKING IN TERMS OF A BRITISH PARTICIPATION OF AROUND 10% TO 15%
ON THE MECHANICAL AND ELECTRICAL EQUIPMENT SIDE ON A A
SUB-CONTRACTING BASIS. THEY DO NOT WISH TO INVOLVE THE ITALIAN
SIDE OF THE ANGLO-ITALIAN CONSORTIUM. GEC WERE INVITED TO MAKE
PROPOSALS AS SOON AS POSSIBLE ON THE RANGE OF PRODUCTS OR DISCIP-
LINES THEY COULD OFFER.
2. THE REASONS FOR THIS TORTUCUS JAPANESE APPROACH HAVE NOT
EMERCED CLEARLY BUT CEC CONSIDER THAT HAVING PUT IN A FIXED PRICE PRE-EMPTIVE BID, THE JAPANESE HAVE NOW REALISED THAT THEY CANNOT POSSIBLY CARRY OUT THE CONTRACT WITHOUT HEAVY LOSS, GIVEN HEAVY
ESCALATION IN COSTS FOLLOWING THE ENERGY CRISIS. IT IS CONCEIVABLE
THAT THEY MAY WISH TO ATTEMPT TO RENEGOTIATE WITH THE HONG KONG
GOVERNMENT AND WISH TO INVOLVE THE BRITISH TO ASSIST THEM WITH
THIS. IT MAY NOT BE WITHOUT SIGNIFICANCE THAT MITI WAS REPRESENTED
BY KOINO WHO LED FOR THE JAPANESE SIDE DURING THE OFFICIAL TALKS WITH MR CHATAWAY ON INVESTMENT MATTERS WHICH OF COURSE INCLUDED
JOINT VENTURES IN THIRED COUNTRIES.
Po
3. THE JAPANESE HOPE THAT SECRECY CAN BE OBSERVED ABOUT THESE
PRELIMINARY EXCHANGES, THAT NO FURTHER REFERENCE SHOULD BE MADE
TO THEM AND THAT GEC PROPOSALS SHOULD COME OUT OF THE BLUE. THIS MAY
BE BECAUSE OF PRESENTATIONAL REASONS WITH THE REST OF THE LARGE
JAPANESE CONSORTIUM.
L. FULLER REPORT FOLLOWS BY BAC.
WARNER.
EXCED DISTN
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CONFIDENTIAL