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GRS 160
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REGISTRYINɔ.52
15 JAN1975
NJKK2)
FM BTC HONG KONG 138938Z
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TO PRIORITY DOT TELEGRAM NUMBER CREDA 4 OF 13 JANUARY INFO TOKYO, CRE4 (MISS WELCH), E C G D (COTTERILL) AND F C O (HKTOD).
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MASS TRANSIT.
THERE WAS A MEETING BETWEEN THE MASS TRANSIT PROVISIONAL AUTHORITY AND THE JAPANESE CONSORTIUM ON THURSDAY AND FRIDAY OF LAST WEEK. THIS WAS ATTENDED BY UNACCUSTOMED PUBLICITY BOTH BEFORE AND DURING THE MEETING AND IT WAS SUBSEQUENTLY ANNOUNCED THAT IT HAD BEEN AGREED THAT THE TALKS SHOULD BE ADJOURNED TO ENABLE BOTH GROUPS TO REPORT BACK TO THEIR PRINCIPALS.
2. IT IS CLEAR THAT THE JAPANESE CONSORTIUM HAS BEEN UNABLE TO MEET THE HONG KONG GOVERNMENT'S CEILING FIGURE CF DOLLARS HK5,000 MILLION. I UNDERSTAND THEY QUOTED A FICURE OF SOME 40 PERCENT IN EXCESS OF THIS AND THAT COUNTER-PROPOSALS FOR MAJOR MODIFICATIONS INCLUDED SCRAPPING ONE STATION, CUT AND COVER EXCAVATION RATHER THAN TUNNELLING, DOING AWAY WITH AIR-CONDITION- ING AND USING SHORTER TRAINS.
3. THE MATTER WILL NOW HAVE TO GO TO EXECUTIVE COUNCIL WHICH MEETS TOMORROW. ON THE BASIS OF WHAT I HAVE BEEN TOLD PREVIOUSLY, THERE WILL HAVE TO BE A THOROUGH REVIEW OF THE PROJECT AND THIS IS LIKELY TO TAKE SOME TIME. I WOULD NOT EXCLUDE THE POSSIBILITY, IN PRESENT FINANCIAL CIRCUMSTANCES, OF THE GOVERNMENT DECIDING TO SHELVE THE PROJECT FOR A WHILE, BUT WHEN IT IS PROCEEDED WITH, THIS IS LIKELY TO BE ON THE BASIS OF A NUMBER OF SEPARATE CONTRACTS LET AND CONTROLLED BY THE AUTHORITY.
KINNEAR