0003160 G.F. 316
SECRET
Date
8th to 12th September 1974
8th November 1974
18th November 1974
- 2
Contents of Talks
Provisional Authority's engineering representatives visited Tokyo to discuss the Consortium's design criteria and standards. Very strong indication of departure from specifications. The Engineering discussions were followed by formal talks during which a strong indication of departure from the financial terms offered in the pre-emptive bid/Letter of Intent was given. But still no hint of intention to withdraw, because submission of Basic Plan was indicated for 15th October 1974.
Japanese Consortium visited Hong Kong. Presented Basic Plan. Notified the Provisional Authority that the Consortium was unable, because of the after-effects of the oil crisis on the Japanese economy to proceed on other than a 1974 price of HK$6 billion with provision for price escalation. Provisional Authority refused to accept this and pointed out that the Consortium was going back on the undertaking and obligations under the Letter of Intent. Agreed that talks should resume after ten days.
Japanese Consortium returned to Hong Kong. Informed the Provisional Authority that it did not consider itself legally bound by the Letter of Intent. Sought a time extension to formulate a revised proposal. Provisional Authority agreed to give a thirty-day extension under the following conditions -
(a)
within 30 days the Consortium must say either that it can proceed or that it cannot proceed;
SECRET
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