4. But, in fairness to the Governor, this is a
situation which he tried hard to avoid. When he
came here in September he warned us that the then
exclusive British bid had little chance of
survival against the Japanese. He himself took
the initiative in suggesting that the British and
Italian consortia should come together with
proposals drawn from the best features of their
individual bids. Since then the tenor of all his
messages has been to urge the need for the Anglo/
Italians to improve their proposals so that they
could be validated for negotiation in competition
with the Japanese. During November and early
December he sent three personal messages to the
Secretary of State for Trade and Industry, as well
as messages to me and Anthony Royle.
5. The efforts of the Department of Trade and
Industry did indeed achieve some improvement in
the Anglo/Italian bid. Even so at the end of the
day the Governor faced a situation in which there
was before his Executive Council an Anglo/Italian
bid without a firm price against a Japanese bid
which was backed by a consortium which was as
strong, if not stronger, than the Anglo Italians
and who were clever enough to offer Hong Kong a
firm and favourable price with a time limit on it.
On commercial grounds, not to have accepted that
as stood
bid/would have meant the risk of a higher price,
dans ar
with a consequent pink to the viability of the
project, while the political risk of the Japanese
still winning in the end would have remained.
/The
NOTHING TO BE WRITTEN IN THIS MARGIN