RF
LET MON
FRE
Our reference:21/14
Your reference:
Mu. Wishi (126)
BRITISH TRADE COMMISSION IN HONG KONG 7th Hope, finett souse, Queen's Road, Central, Hond=CORR =
Mail Address: P.O. Box No. 528, Hong Kong
23 DELH975
LKK 2
J C m mason Esq
Cable Address: “Uktrade Hongkong” Telephone- 230176
9th Floor, Gammon House, 12 Harcourt Road, Hong Kong.
oreign and Commonwealth Office London SW1
Den
17 December 1975
2912. L.A.
Hongong Lase Transit roject.
1201
I had a brief discussion yesterday with Cortazzi about our prospects in the Hong ony Less Transit project and he suggested that I write to you. He is aware of the disappointment locally that British civil contractors have taken so little interest and is concerned that the atter may be raised when the Secretary of State visits Mon; dont on his way to China next year. I have explained that efforts have been made through the Overseas Projects Group of BCE to persuade Costains, in particular, to tender; but that they withdrew because of commitments elsewhere and are unlikely to be gorsuadea to change their minds - there is the added complicat- ion that tenders for the second round of civil contracts have to be in by 12 January, so there is probably insufficient time even if they However, Cortazzi will be checking on his return to make quite sure that there is nothing more that can be done.
GO..
2. On the electrical and mechanical side the position is better and British companies will be tendering for all the contracts. The only outstanding problem here is the competitiveness of the ECGD offer. Thompson, the Chairman of the bass Transit Corporation, saw AKemp of BUGD in London on 26 November. He expressed himself generally satisfied with the ECGL offer, except on the question of cover for local costs. The position here is that the Japanese have offered to cover 15% of local costs and the French and Germans effectively did so in the first round of the civil contracts by making a very generous assessment of the exportable element eligible for cover. ECGD have agreed to approach the Treasury once again, but have warned Thompson that they are not too optimistic about the outcome.
3. If the Treasury can be persuaded that we should agree to cover an element of local ecute, this should place us in a favourable position as the Corporation has tuben a view on sterling which makes it attractive in comparison to other currencies. It is difficult to assess to what exit the dvantage of a depreciating currency is offset by our failure, so far, to match up to the competition on local costs (and we will be higher than our competitors on interest rates). It is clearly important, however, that British industry be given as much support as possible from LCGD to help it get a major share of the B & contracts. This is important in itself in the context of our export effort; and it is important in the context of the Secretary of State's visit. The outcome of the latest approach by ECGD to the Treasury should be known shortly and I hope it will be favourable
/the Secretary
Every effort is made to ensure that the information given herein is accurate, but no legal responsibility is accepted for any errors or omissions in that information and no responsibility is accepted in regard to the standing of any firms, companies or individuals mentioned.