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DO BTC HONG KONG
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CONFIDENTIAL
DESKBY 03010OZ
FM DEPARTENT OF TRADE 021745Z NOV 78
TO IMMEDIATE BTC HONG KONG
TELEGRAM NUMBER CREDA 181 OF 2 NOVEMBER
FROM ROYCE
हरे Action Fara!"
H K & G D
@
TRED PUSD 2
YOUR TELEGRAM NO 323 CREDA: METRO CAMMELL. GARDINER OF LAIRDS TODAY TOLD KNIGHTON THAT METRO CAMMELL HAVE BID A FIXED PRICE OF £52.4 MILLION FOR 135 CARS FOR THE KOWLOON/CANTON RAILWAY. THEY UNDER- STOOD THAT SWISS, FRENCH AND GERMAN CONSORTIUM HAD MADE A COMPLAINT BID OF £42 MILLION FIXED PRICE.
LAIRD SUSPECTED THE BID WAS A LOSS LEADER WITH AN EYE TO BUSINESS IN CHINA. GARDINER SAID THAT NO DECISION HAD YET BEEN TAKEN BY THE HONG KONG TENDER BOARD.
METRO CAMMELL HAD SOME ALLIES AND BELIEVED IF THEY ACTED QUICKLY AN INDICATION OF A SUBSTANTIAL PRICE REDUCTION MIGHT KEEP THEM IN THE RACE. METRO CAMMELL
AND THEIR SUPPLIERS MIGHT BE ABLE TO DO SOMETHING BUT
GARDINER THOUGHT THIS COULD NOT PRODUCE MORE THAN
BETWEEN A TWO AND A FIVE PER CENT REDUCTION, IN THE
METRO CAMMELL PRICE WAS AN ALLOWANCE OF £8.8 MILLION
FOR ESCALATION. GARDINER ASKED WHETHER EG WITHIN THE
COST ESCALATION SCHEME SOME HELP COULD BE GIVEN OVER
THIS.
GARDINER SAID THAT METRO CAMMELL COULD NOT THEMSELVES
OFFER A LOSS LEADER PRICE. ON THE OTHER HAND, IT WOULD BE SERIOUS FOR THEM IF THEY WERE TO LOSE BOTH
THE HONG KONG KOWLOON CONTRACT AND THE SECOND STAGE FOR THE MASS TRANSIT RAILWAY, GARDINER THOUGHT THAT METRO CAMMELL'S ALLIES IN HONG KONG MIGHT BE ABLE TO SECURE A DELAY OF FIVE OR SIX DAYS BUT AFTER THAT MIGHT WELL BE OUT OF THE RUNNING IF THEY HAD NOT
OFFERED SOME PRICE REDUCTION.
WE SHALL BE EXAMINING THE POSSIBILITY OF PROVIDING
HELP AT AN INTER-DEPARTMENTAL MEETING TOMORROW
3 NOVEMBER, ANY ADDITIONAL INFORMATION OR ADVICE
YOU CAN PROVIDE WOULD BE HELPFUL. OUR INITIAL REACTION
IS THAT IF ANY HELP CAN BE GIVEN IT MIGHT BE MORE
IMPORTANT TO HELP WITH THE MASS TRANSIT SCHEME FOR WHICH
RATHER MORE TIME SEEMS TO BE AVAILABLE. WE ARE NOT, HOWEVER, SANGUINE OF FINDING ANY MEANS OF BRIDGING THE
VERY LARGE PRICE GAP REPORTED BY GARDINER.
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