HOFO @30/13
PP DO T
27
GR 652
CYPHER/CAT A
FM HONG KONG 1318452
UNCLASSIFIED
COMMERCIAL IN CONFIDENCE !
(28)
TO PRIORITY DOT TELNO CREDA 36 OF 13 MARCH.
FOR FARRY OFPG FROM KINNEAR,
YOUR CREDA 35: HONG KONG MASS TRANSIT.
I SAW THOMPSON, WHO HAD RIDLEY WITH HIM.
RA
RECE REC!:
IN
0.51.
14.BR/75
THOMPSON ASKED ABOUT THE LETTER. HE HAS A VERY GOOD IDEA FROM
VARIOUS SOURCES OF WHAT IT IS LIKELY TO CONTAIN AND IS CLEARLY
CONCERNED THAT IT WILL BE PRESENTED AS A WILLINGNESS BY CIVIL CONTRACTORS TO REGISTER ONLY ON THEIR OWN TERMS, REQUIRING A
COMPLETE RENEGOTIATION OF THE BASIS OF THE SCHEME, AN APPROACH
WHICH THOMPSON SAYS HE WOULD FIND QUITE UNACCEPTABLE AND WHICH
WOULD PLACE MIK IN AN IMPOSSIBLE POSITION WITH THOSE CONTRACTORS WHO HAVE REGISTERED ALREADY. HE OBVIOUSLY HAS THE IMPRESSION THAT
THE BRITISH CONSTRUCTION INDUSTRY IS ADOPTING ITS PRESENT APPPOACH AS A MATTER OF TACTICS (HE WAS NOT VERY AMUSED BY THE PECENT ARTICLE ABOUT THE SCHEME IN THE CONSTRUCTION NEWS) AND SAID THAT THESE
TACTICS MIGHT QUOTE BLOW UP IN ITS FACE UNQUOTE.
2. THOMPSON TOLD ME HE HAD AGREED TO EXTEND THE REGISTRATION
DEADLINE TO 31 MARCH IN A NUMBER OF OTHER CASES, BUT HE COULD NOT EXTEND BEYOND THIS DATE WITHOUT BREAKING FAITH WITH THOSE FIRMS
WHO HAD REGISTEMED BY THE MARCH 1 DEADLINE. EVEN IF HE GOT THE LATTER THIS WEEK, A REPLY WOULD NOT REACH LONDON UNTIL LATER NEXT WEEK AND THE TIME LEFT FOR REGISTRATION WOULD BE EXTREMELY CHURT. HE COULD NOT SEE WHAT FIRMS WOULD LOSE BY REGISTRATION, WHICH COMMITTED THEN TO NOTHING, AND IT WOULD HELP HIM WITH THOSE FOREIGN CONTRACTORS WHICH HAD REGISTERED ALREADY IF HE COULD HAVE AN APPLICATION BY TELEX FROM THE BRITISH FIRMS CONCERNED REQUESTING
AN EXTENSION OF THE DEADLINE TO 31 MARCH,
3. THOMPSON'S INITIAL REACTION TO THE TARGET PRICE FORMULA (ALCUT WHICH HE HAD HEARD) WAS THAT THIS WOULD GIVE NO CONTROL OVER THE COST OF THE SCHEME. HE STRESSED THAT THERE WOULD BE PROVISION IN CONTRACTS FOR REIMBURSING ADDITIONAL EXPENSES ARISING FROM ARY NEED TO OVERCOME UNFORSEEN ARTIFICIAL OR MAN-MADE OBSTRUCTIONS. ! EXPLAINED TO THOMPSON THAT THERE HAD BEEN A DELAY IN SENDING OFF THE LETTER BECAUSE OF THE NEED TO WHIP UP INTEREST, THAT I DID NOT KNOW WHAT THE PRECISE TERMS OF THE LETTER WOULD BE AND THAT IT WOULD ONLY COMPLICATE MATTERS IF WE TRIED TO DISCUSS THE QUESTION BEFORE
HE HAD RECEIVED AND STUDIED THE LETTER.
4. THOMPSON MADE THE FURTHER POINT THAT AT NO TIME HAD AN ASSURANCE BEEN GIVEN THAT NEGOTIATIONS WITH THE BRITISH GACUF WOULD LE RE- OPENED IF THE JAPANESE WITHDREW. HE HAD CHECKED THE PAPERS. THU PROVISIONAL AUTHORITY HAD SAID NO MORE THAN THAT THE WHOLE POSITION
WOULD BE REVIEVED.
5. ON COMPENSATION FOR PRE-TENDER COSTS, THOMPSON'S IMMELFATE REACTION WAS THAT HE COULD NOT SEE HOW HE COULD ACCEPT SUCH A CONDITION WITHOUT DOING SO FOR ALL OTHER FIRMS WHICH BID (AND FIFTY FIRMS HAD REGISTERED FOR THE E AND M CONTRACTS), HE HAVE THE POINT CONTRACTS FOR THE REPRESENTATIVE CIVIL WORKS (PARA 3 OF MY TEL CREDA 8) WOULD BE LET BY MID AUGUST, EXCEPT IN THE VERY UNLIKELY EVENT THAT THE PRICES QUOTED WERE OUT OF LINE WITH THE AUTHORITY'S OWN VERY CONSERVATIVE ESTIMATES. IT FOLLOWED THAT THE FIRMS BIDDING FOR THE F AND M CONTRACTS SHOULD KNOW AT THAT STAGE WHETHER THE
SCHEME WOULD GO AHEAD OF NOT.
6. THERE IS A DANGER THAT THOMPSON WILL BE FORCED TO EXCLUDE BRITISH CIVIL CONTRACTOS IF THEY DO NOT REGISTER FOR PRE-WAL - ICATION BY 31 MARCH, HE CAN NOT BE SEEN TO BE GIVING BRITISH FIRMS PREFERENTIAL TREATMENT WITHOUT CAUSING CONSIDERABLE GUSPICION AMONG FOREIGN CONTRACTORS, WHILE I THINK HE IS STILL LIGHT ON THE CIVIL SIDE, I UNDERSTAND THAT HOCHTIEF AND GAMMONS HAVE NOW BEEN JOINED BY DRAGAGE AND SENTAL, WHICH MAKES A STRONG GRI UPLO WITH EXPERIENCE OF THE OPERATING IN HONG KONG ON THE HIGH ISLAND AND PLOVER COVE SCHEMES. WOULD IT NOT BE WISER FOR BRITISH CONTRACTORS TO REGISTER AND ARGUE LATER?
7. IF I AM TO PRESS THE CASE FOR THE DIRECT PRICE PLUS BILLS OF QUANTITY APPROACH CAN BE FULLY BRIEFED BEFORE DOING SO AND COULD I HAVE A SUMMARY OF THE PROPOSALS IN THE CIVIL CONTRACTORS' LETTER BY TELEX. IF BRITISH CIVIL CONTRACTORS REALLY INTEND TO TAKE THIS ONE SERIOUSLY, CAN YOU PERSUADE THEM TO SEND SOMEONE OUT TO PUT THEIR POINT OF VIEW DIRECT TO THOMPSON AS A FOLLOW UP TO THE LETTER?
KINNEAR
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