D0 BTC HONG KONG
GRS 450A
HKK 173/1
RECEIVE
23 JAN 178
CYPHER CAT A
DESK OFFICER INDEX
FM DTI 201845Z
6
MOTHY Action Taken
1129
TRED (2)
HILGD
PUSD (2)
FED
UNCLASSIFIED
COMMERCIAL IN CONFIDENCE
TO IMMEDIATE BTC HONG KONG UNNUMBERED CREDA TELEGRAM-OF 28
JANUARY 1978.
MARCH FROM ASHWOOD: M.T. YOUR CREDA TO LIGHTMAN.
1. AT LATTER'S REQUEST MOTT CALLED YESTERDAY. IN TODAY'S BAG I AM SENDING COPY OF AIDE MEMOIRE GIVEN TO US BY MOTT SETTING OUT GKL'S VERSION OF DISPUTE IN SOME DETAIL. THE KEY QUESTION RELATES TO CONDITIONS OF CONTRACT. WHEN GKL UNDERTOOK CONTRACT AT M.T. REQUEST THEY DID SO WITH STRONG QUALIFICATIONS REQUIRING POSITIVE ASSURANCE THAT THE COSTS OF ANY CHANGES OF DESIGN AND METHODS IN EXTREMELY DIFFICULT SITE WOULD BE REIMBURSED. THE M.T. SOUGHT TO DELETE STRONGEST QUALIFICATION COVERING ADDITIONAL COSTS BUT WERE NOT SUCCESSFUL AND GKL'S CONDITIONS OF ACCEPTANCE WERE CONFIRMED IN WRITING. SUBSEQUENTLY THOMPSON WROTE SAYING
HE WAS SATISFIED KEY QUALIFICATION HAD BEEN WITHDRAWN AND AT A FOLLOW UP MEETING IN KK WHICH MOTT WAS INVITED TO ATTEND AND LASTED ONLY HALF HOUR THOMPSON GAVE HIM SHORT SHIFT AND REFUSED
TO DISCUSS FURTHER.
2.
MOTT TOOK COUNSEL'S OPINION WHICH ENTIRELY SUPPORTS GKL
WHO STAND TO LOSE PDS NINE MILLION ON A PDS 43 MILLION CONTRACT
AND ARE ALREADY BORROWING LOCALLY TO FINANCE WORK. MOTT HAS
GIVEN NOTICE THAT IF NO SOLUTION IS REACHED WITHIN MONTH
GKL WILL ISSUE WRIT, PROBABLY IN HK COMMERCIAL COURT. HE STRESSES THAT HE STRONGLY WISHES TO REACH ACCOMMODATION BUT SUM INVOLVED
LEAVES NO OPTION TO PROPOSED ACTION IF NO AGREEMENT IS FORTHCOMING. HE SAYS ADVERSE PUBLICITY WOULD BE DAMAGING TO M.T. WHICH ALREADY
HAS BAD REPUTATION AMONG CIVIL CONTRACTORS.
3. WE DISCUSSED POSSIBLE SOLUTION IN BID TO HELP GKL AND AVOID
DAMAGING UK PROSPECTS FOR STAGE 11. MOTT SUGGESTS AT LEAST TWO