CONFIDENTIAL
•
7.
DOI permission would be needed before Hong Kong firms could be invited to tender.
8.
If any vessels were built in Hong Kong some method of oversight would need to be devised.
9. Local build would have the advantages of rapid delivery and lower cost.
10. MR DAVIES asked whether it would be possible to build one vessel initially so that its performance could be assessed and necessary design modifications incorporated before further orders were placed.
11.
DG SHIPS advised that this would be a costly procedure as any redesign would attract further first of class costs. Also the build programme (and thus in-service“ dates) would be delayed up to 3 years by such a procedure. It would however be possible to arrange a gap between the first and second vessels (without ordering each separately) so that any faults in the first vessel could be indentified during build and rectified in the remainder.
12. IT WAS AGREED that the right course of action would be to invite tenders from UK firms for the first two vessels, then invite tenders for the remainder without restriction (ie including Hong Kong firms).
HONG KONG GOVERNMENT AGREEMENT TO PROPOSED SOLUTION
13. Mr Davies said that before he could agree to the proposed solution he would need to seek the approval of his Government's Councils. He would need to refer to them a summary of the present position which would need to be rather shorter than the summary already sent to him and should:
a. Justify the numbers required.
b.
Expand only upon the three preferred designs.
C.
Avoid mention of unconventional craft.
14.
d.
e.
fo
Give no detail about the weapons and communications studies.
Include information about the relationship between increase in speed and cost.
Give some indication as to how inflation is likely to affect costs.
IT WAS AGREED
a.
that DS4 and DNOR should produce a paper along the lines described and send it to Mr Davies in mid October;
b.
that in the meanwhile DNOR would continue to process the NSR on the assumption that the Hong Kong Government would agree to its recommendations;
that the Hong Kong Government would try to give approval in principle by the end of the year.
C.
20 Sep 78
2
CONFIDENTIAL
Willy RS
N PAINTER (MRS) DS4C
MB 4106 2774 MB