'
COLLERCIAL IN CONFIDENCE
BRITISH TRADE COMMISSION IN HONG KONG
7th Floor, Shell House, Queen's Road, Central, HONG KONG Mail Address: P.O. Box No. 528, Hong Kong Cable Address: "Uktrade Hongkong" Telephone- 230176
30.
Our reference: 21/1(A)
Your reference:
1 E Farry Esq
Overseas Finance and Planning Division
Department of Trade
1 Victoria Street
London SW1H OET
dear fany
Hong Kong Mass Transit:
Mn
на наука
p.a.
пит
RECEIVED IN REGISTRY No. 61
27 March 1975
2 5 APR 1975
HKK 21/14
I enclose a copy of Thompson's reply to Ross, referred to in my telegram Creda 39.
2.
114
I mentioned in the same telegram that I had been to see Walter Sulke, Chairman of Zung Fu, who was closely associated with the Anglo/French/German consortium in the first round. He is a shrewd and successful business man who shares the misgivings that have been expressed about the viability of the scheme and the wisdom of the multi-contract approach. Nevertheless, it is clear from what he told me that firms like Hochtief have a very different approach to that adopted by the British civil contractors. While Sulke pressed very hard, after the Japanese withdrew, for negotiations to be reopened with the original consortia, Hochtief have accepted that there is a new ball game and are not being influenced by what went before.
3. Sulke believes that the Provisional Authority may find that the civil costs will be slightly lower than it estimates, but has doubts about the E & L costs and the wisdom of the Authority committing itself to starting on the civil works, before it has · any idea what the E & l costs are going to be.
4. It is difficult to advise on the likelihood of the project not being proceeded with, either because money cannot be found for the local costs or because it can only be got on unacceptable terms. I would think this is anybody's guess at the moment, but I'm sure we must proceed on the assumption that the money will be found. Our competitors appear to be doing so. There is always the probability that bids received for the representative contracts will be higher than the Authority bargained for. This obviously is a hurdle the Authority will have to face, but Thompson is caphatic that its financial projection has been extremely conservative. Loreover, it would be unwise to overlook the fact that whatever people's feelings may be about mass transit (and they are very mixed here) it does seem to be the only way of coping with long Kong's future transport needs. While the Government has been insisting that the project must be self-supporting, they may be forced into some form of subsidy. hat I reported in my letter of 20 Larch suggests that they recognise this.
15.
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