CONFIDENTIAL
British Trade Commission in Hong Kong 7th Floor Shell House Queens Road Central Hong Kong Mail Address PO Box No 528 Hong Kong
Telex HX 3031 Cable Address Uktrade Hong Kong Telephone H-230176
RECEIVED IN
REGI
D. N. Royce, Esq.,
Overseas Projects Group,
Overseas Finance & Planning Division,
Department of Trade,
1, Victoria Street,
London, S. W. 1.
12 NOV 1974
Your reference
#KK 21/2.
Our reference
21/1
Date
4 November 1974
MASS TRANS IT
With the Hong Kong Government team and the Japanese consortium about to enter into another plenary session of the negotiation of the contract for the construction of the mass transit system, I have been making some enquiries to find out how things stand. I have not sought to embarrass Government Officials by asking them direct questions and my information is drawn largely, but not entirely, from the consultants, whose confidence should be respected.
2.
When I last wrote to you I expressed the opinion that the Hong Kong Government was not out of the woods on this one yet; this still seems to be the position. I gather that the Japanese consortium will be producing a "main proposals document" in the very near future and that once the study of this document is complete, which will probably take a month, the Hong Kong Government will know whether the consortium's proposals come near enough to satisfying the original performance criteria to mean that a contract is likely to be signed. The Japanese have, not unexpectedly, been putting forward proposals designed to reduce the cost of construction of the system; but I am assured, in this connection, that the Hong Kong Government is only too well aware that it will be subject to very considerable criticism and its reputation will suffer if it allows any radical departure from the performance criteria laid down at the time of the pre-emptive bid. As you know, much of the detail has been filled in since then and the bare bones of the scheme which existed at the time of the pre-emptive bid gave room for the Japanese to do their best to modify things to their own liking. But I am told that the Hong Kong Government's concern that there will be a major row if it allows the Japanese consortium to depart too far from the performance criteria, has resulted in it being a good deal less flexible than it other- wise might have been. As it is, the two sides seem to be arguing at the level of whether savings should be made by dispensing with downward moving escalators.
3. While there appears to be some impatience in Hong Kong Government circles about the slow rate of progress, I gather that the Japanese have worked really hard on this one. A conversation I had with the Japanese
/Consul-General
Every effort is made to ensure that the information given herein is accurate, but no legal responsibility is accepted for any errors or omissions in that information and no responsibility is accepted in regard to the standing of any firms, companies or individuals mentioned.
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