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CONFIDENTIAL # # 機密
The Provisional Authority, therefore, informed the
Consortium at their meeting on 17th December 1974:
(a) that if the Consortium were to break off negotiations
unilaterally, the Provisiona! Authority would place the full onus for this on the Consortium;
but (b) that the Provisional Authority would agree to release
the Consortium from the Letter of Intent, and do its best to defend the Consortium's decision to withdraw, only if the Consortium would agree to pay adequate compensation.
blueo muitoes,
ano bas zanie
10:
The Consortium initially reserved its position but agreed that public relations on both sides should be carefully handled. As this implied a measure of agreement to consider sympathetically a claim for compensation, the Provisional Authority suggested, and the Consortium further agreed, to discuss an initial claim with representatives of the Provisional Authority. Finally, the Consortium agreed to visit Hong Kong on 9th-10th January 1975 to make a definite response to the claim.
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The Provisional Authority decided to base its claim for compensation on actual expenditure incurred from the date of the Government's acceptance of the Consortium's pre-emptive bid (11th December 1973) and the present that would not be recoverable were the project to be abandoned. The Provisional Authority accordingly claimed a sum of $160 million,
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The Japanese Consortium responded to this claim by repeating that the Provisional Authority had no legal claim for com- pensation. However, it offered "an ex gratia payment" to the Provi- sional Authority as 'a gesture of goodwill" with certain attendant conditions. The Provisional Authority indicated that it would accept an offer so described provided that the actual payment proposed was satisfactory. The Consortiuın accordingly offered ¥300 million (approximately $5 million) which the Provisional Authority rejected. It informed the Consortium that unless an offer which would at least cover expenditure which would be irrecoverable even in the event that the project proceeds was made by 9 a. m. Hong Kong time on Tuesday, 14th January 1975, the Consortium would have to face the consequences of their inadequate offer. (For further deatils of these exchanges see the last page of Annex C). Honourable Members will be informed of the response of the Japanese Consortium at the time this memorandum is considered.
C.S. 166
Pros and cons of continuing with or abandoning the Railway
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The need for the Mass Transit Railway was demonstrated in detail to Honourable Members' satisfaction in April 1972. The Provisional Authority, on the best advice available on public transport, sees no reason to differ now from the conclusion reached at that time and recommends that every effort should be made to build the Railway for the follow*
CONFIDENTIAL
機密