CONFIDENTIAL
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INDEX
2007 NO. 51
14 NOV 07
OFFICER
PA
PESI HY Action Ter
GRS 264
CONFIDENTIAL
FM FCO 101704Z NOVEMBER 78
TOP CO
No
TO IMMEDIATE HONG KONG
TELEGRAM NUMBER 848 OF 10 NOVEMBER
Sve 30
PERSONAL FOR GOVERNOR ONLY FROM CORTAZZI
KOWLOON/CANTON RAILWAY
1. WE WERE VERY CONCERNED TO LEARN FROM MARCH THAT METRO CAMMELL'S (MET CAM) TENDER FOR THE CONTRACT TO SUPPLY PASSENGER ROLLING STOCK FOR THE KCR WAS SOME POUNDS STERLING 7 MILLION ABOVE THAT OF THE EUROPEAN CONSORTIUM WHO WE UNDERSTAND PROVIDE THE MOST
SERIOUS COMPETITION.
2. IN CONSULTATION WITH MET CAM, THE DEPARTMENTS CONCERNED IN WHITEHALL HAVE BEEN URGENTLY EXLORING WAYS OF BRIDGING THE GAP. THEY HAVE SO FAR SUCCEEDED IN REDUCING MET CAM'S PRICE BY POUNDS
STERLING 4 MILLION AND THERE ARE HOPES OF LOWERING IT STILL
FURTHER.
3. APART FROM ITS COMMERCIAL SIGNIFICANCE THIS CONTRACT HAS, AS YOU WILL REALISE, IMPORTANT POLITICAL IMPLICATIONS. THE FIRM WHICH WINS IT WILL STAND A VERY GOOD CHANCE OF SUPPLYING MATCHING EQUIPMENT FOR THE MODERNISATION OF THE LINE TO CANTON ON THE CHINESE SIDE OF THE BORDER, FOR WHICH TRANSMARK ARE ALSO LIKELY TO GET THE CONSULTANCY. THERE ARE CLEAR POLITICAL ADVANTAGES IN HAVING THE WHOLE CANTON/HONG KONG RAIL ROUTE MODERNISED BY BRITISH FIRMS. MOREOVER, FAILURE BY MET CAM TO WIN A CONTRACT PREPARED BY BRITISH CONSULTANTS TO BRITISH SPECIFICATIONS AND IN BRITISH TERRITORY COULD HAVE WIDER IMPLICATIONS FOR UK/HONG KONG AND UK/CHINA TRADE. 4. I SHOULD THEREFORE BE GRATEFUL FOR ANYTHING YOU CAN DO TO SWING THE CONTRACT MET CAM'S WAY. IF THIS CANNOT BE DONE ON THE BASIS OF THE PRESENT FIGURES, THE NEXT BEST SOLUTION WOULD BE TO CALL FOR NEW TENDERS SO THAT MET CAM CAN STAY IN THE RACE.
OWEN FILES
HD IH Kṣ G D #DIFED
·MR CORTAZZI
MR MURRAY
1
COPIES TO MR.D.N.ROYCE. ED. DOT
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