DO BTC HONG KONG
GR 230
CYPHER/CAT A
HKK 173/1
REGIVE
MY NO. 51
we mun which
INDEX
TRIC
See 54
FM DTI 261840Z
CONFIDENTIAL
HKED TRED
2
Pus 02
TO IMMEDIATE BTC HONG KONG TELEGRAM NUMBER CREDA 175 OF 26 OCTOBER 78
FOR MARCH FROM TWYMAN, OVERSEAS PROJECTS GROUP.
GARDNER OF LAIRD GROUP HAS CONTACTED PLIATZKY AND KNIGHTON WITH URGENT ANXIETY OVER NEXT CONTRACT FOR METRO CARS. FILES LOCKED UP SO PLEASE FORGIVE POSSIBLE IGNORANCE OR NAIVETE.
PROBLEM HAS THREE ASPECTS.
FIRST, METCAM HAVE PUSHED MARGINS DOWN AS FAR AS POSSIBLE BUT HAVE TO FIND WAY OF COVERING THE FIRST SEVEN PERCENT ECGD CANNOT. FOR 150 CARS THIS PUSHES UP PRICE FROM BASE OF PDS.STG 48M TO PDS. STG 63M, FOR DELIVERY 1982.
SECOND, FEAR JAPANESE WILL PUT IN SUICIDE BID AND, MAYBE, OFFER YEN TO HK DOLLAR EXCHANGE AT NO RISK TO CUSTOMER.
THIRD, CUSTOMER FORCING ON METCAM CHANGES IN CONTRACT TERMS AND CONDITIONS. E.G. FORCE MAJEUR IMPORT DUTY (WE GATHER YOU KNOW OF THIS). COVERING THESE OBVIOUSLY INCREASES PRICE.
METCAM NEED TO DECIDE WHAT NEEDS TO BE DONE AND CAN BE DONE WITHIN COMMERCIAL PARAMETERS WHAT IS YOUR ASSESSMENT, PLEASE. IF WHAT METCAM CAN DO FALLS SHORT THEN NO DOUBT HMG WILL BE ASKED TO
ASSIST, THOUGH IT IS NOT CLEAR HOW WE MIGHT DO THIS.
ONE CURIOUS FEATURE IS THAT WHEN I SPOKE TO SANSOME LAST WEEK HE DID NOT SEEM UNDULY WORRIED, BUT GARDNER IS CLEARLY AGITATED. PRESUMABLY AS RESULT OF SOME RECENT DEVELOPMENT. REPLY BY FRIDAY
WOULD BE MOST HELPFUL.