ADVANCE COPIES
5
RECEIVED IN
REGISTRY No. 51
20 JAN:975
PS
p's how G
PS to PUS
HOFO GB4/13
·HKK 2/4
00 F C O
GR 130
CYPHER/CAT A
FM HONG KONG 130215Z
SECRET
Je last cel
I dhe IICIO
Idel FŔ Itu TRE
TO IMMEDIATE F C O TELNO 44 OF 13 JANUARY.
PERSONAL FOR SIR DUNCAN WATSON.
MASS TRANSIT RAILWAY.
FD
Mr Hanya
Th
Mr Tiny's old Mr Bhude
孔
13/1
r/i
1511
THE JAPANESE CONSORTIUM HAVE INFORMED THE PROVISIONAL AUTHORITY
THAT IT IS UNABLE TO CONCLUDE NEGOTIATIONS FOR A CONTRACT, THEIR
EXCUSE FOR FAILING TO MEET THEIR MORAL AND COMMERCIAL OBLIGATIONS
UNDER THE LETTER OF INTENT SIGNED LAST FEBRUARY IS THAT THEY COULD
NOT HAVE REASONABLY FORESEEN THE CURRENT DIFFICULTIES FACING THE
JAPANESE ECONOMY. THIS WE DO NOT ACCEPT AND, UNLESS THE CONSORTIUM
OFFERS US A REASONABLE SUM BY WAY OF COMPENSATION, WE SHALL BE
FORCED TO SPELL OUT OUR VIEW OF THE CONSORTIUM'S PERFORMANCE IN
SOME DETAIL.
2. ON TUESDAY (14TH) EXECUTIVE COUNCIL WILL BE ASKED TO ADVISE WHETHER WE SHOULD PROCEEED WITH THE CONSTRUCTIONS OF A MODIFIED
INITIAL SYSTEM ON THE BASIS OF A MULTI-CONTRACT APPROACH OR DROP THE PROJECT ALTOGETHER. THE ARGUMENTS FOR AND AGAINST EACH COURSE
OF ACTION AND THE RECENT HISTORY OF THE NEGOTIATIONS ARE SET OUT IN MEMORANDUM XCS(75)1, A COPY OF WHICH WILL BE IN BAG NO. AS
LEAVING HERE ON TUESDAY.
MACLEHOSE
BENN