RR FCO

GR 315

CYPHER/CAT A

SER 1978

FM BTC HONG KONG 311201Z

เจ

Waubate 071/2.

Виден

A

NO DISTRIBUTION

Lon+ 2 DOT (CRE)

(+s

75

Вир

Dup R129

CONFIDENTIAL

TO PRIORITY D.O.T TEL NO.CREDA 54 OF 31 JANUARY 78,

s

HK GA TRED

PUSD (2)

INFO FCO.

M.I.P.T. GKL AND MTR.

YOU

1. STRICTLY FOR YOUR OWN INFORMATION YOU SHOULD KNOW THAT I HAVE

CONSULTED DAVID JEAFFRESON, DIRECTOR OF ECONOMIC SERVICES AND DOUGLAS BLYE, SECRETARY FOR MONETARY AFFAIRS, WHO IS A MEMBER OF THE MTR BOARD. THEY STRONGLY REFUTE ANY SUGGESTION THAT THE CHINESE DIRECTORS OF MTR ARE DISSATISFIED WITH THOMPSON'S

PERFORMANCE.

2. THEY EXPLAINED THAT FOR TWO REASONS THE HONG KONG GOVERNMENT WOULD BE MOST RELUCTANT TO PUT PRESSURE ON THE MTR TO AGREE TO SOMETHING WHICH THE CORPORATION DOES NOT REGARD AS BEING IN ITS COMMERCIAL INTEREST. THE FIRST IS THAT THE CORPORATION IS COMMERCIALLY INDEPENDENT, A POINT THAT HAS BEEN STRESSED FOR EXAMPLE IN ALL LOAN NEGOTIATIONS. THE SECOND IS THAT THE HONG KONG GOVERNMENT TAKES NO FART IN THE ANALYSIS OF MTR TENDERS OR THE AWARD OF CONTRACTS EXCEPT TO THE EXTENT THAT THE PUBLIC WORKS DEPARTMENT ARE CONSULTED ON TECHNICAL ASPECTS AND ON THE STANDING OF CONTRACTORS. THE AWARD OF CONTRACTS IS A MATTER FOR THE BOARD OF MTR AND ANY ACTION WHICH SUGGESTED THAT THE HONG KONG GOVERNMENT INTERFERES WOULD ONLY TEND TO CONFIRM THE VIEWS, HELD BY SOME PEOPLE, THAT DIRECTIONS WERE GIVEN TO THE CORPORATION ON E AND M CONTRACTS, PARTICULARLY THE ONE FOR THE ROLLING STOCK. PLACING OF FUTURE ORDERS WITH BRITISH SUPPLIERS BY THE CORPORATION MIGHT BE PREJUDICED.

3. ON THE OTHER HAND, THEY TOO WERE CONCERNED THAT THE ROW BETWEEN GKL AND MTR DOES NOT ALSO PREJUDICE BRITISH SUPPLIERS. THEY WERE THEREFORE GRATEFUL THAT I HAD BROUGHT THE DISPUTE TO THEIR ATTENTION SINCE THEY RECOGNISE THE POTENTIAL DANGERS OF A COURT CASE. THEY WILL BE KEEPING A WATCHFUL EYE ON DEVELOPMENTS

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