DEDIP
2
CONFIDENTIAL
DESK 151023Z
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FM BTC HONG KONG 150857Z JAN 79
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HKLIDVANCE COPY RECEIVED IN RECORD 170/HK+ GD
15 JAN 1979
TO IMMEDIATE D.0.1
IND
TEĽNO.INDUS 12 OF 15 JANUARY.
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Action
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PERSONAL FOR LIPPITT, DEPUTY SECRETARY.
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MY TELNO.CREDA 15: MASS TRANSIT RAILWAY CORP. (MTRC).
Sea (13
1. MY REPORT, SENT IN RESPONSE TO TWYMAN'S CREDA 8 OF 12 JANUARY, IS, OF COURSE, BASED ON MY CONVERSATION WITH THOMPSON, CHAIRMAN OF MTRC WHICH TOOK PLACE ON A STRICTLY PRIVATE AND CONFIDENTIAL
BASIS.
2. THOMPSON TOLD ME THAT THE ORIGINAL JAPANESE BID PROVIDED FOR
A WAIVER OF INTEREST UNTIL 31 JULY, 1981 BUT THAT, IN THE COURSE
OF NEGOTIATIONS ON THE ESCALATOR AND ENVIRONMENT CONTROL CONTRACTS
H.M.T EXTENDED THE DATE OF THE WAIVER TO 31 DECEMBER, 1982 AND
APPLIED IT TO ALL CONTRACTS COVERED BY THEIR FINANCIAL PACKAGE.
THIS INCLUDED CONTRACT 351 (RAILCARS). THE SUM INVOLVED IS
H.K DOLLARS 42 MILLION AND THOMPSON IS QUITE CONVINCED THAT HIS
BOARD WOULD NOT ALLOW HIM TO REJECT THIS LATE AMENDMENT TO THE
FINANCING TERMS.
3. I AM SURE THAT THOMPSON IS DOING ALL HE CAN TO ENABLE METCAM
TO COUNTER JAPANESE SUICIDE TACTICS. HE TOLD ME THAT BEFORE THIS LATEST JAPANESE OFFER THE BIDS WERE 'EVEN-STEPHEN''. 1
JUDGE OUR PRICE WAS SUFFICIENTLY CLOSE TO ENABLE HIM TO ARGUE THAT ANY MARGIN WAS SO SMALL AS TO JUSTIFY AN AWARD TO METCAM
ON GROUNDS OF COMMONALITY OF EQUIPMENT. IT WAS THOMPSON'S ANNO YANCE THAT THE JAPANESE HAD SUCCEEDING IN ALTERING THE EFFECTIVE PRICE FOR CONTRACT 351 THAT LED HIM TO INSTRUCT ALLUM
TO TELL GEMMILL THAT HE CAN STILL ACCEPT AN ADJUSTMENT IN
FINANCIAL TERMS FROM US.
4. I CANNOT STRESS TOO MUCH THE NEED TO KEEP OUR KNOWLEDGE OF
THIS DEVELOPMENT FROM THE JAPANESE. THE INFORMATION COULD ONLY
HAVE COME FROM THOMPSON OR ALLUM AND THERE WILL BE A STORM IF
H.M.T FIND THAT THEIR ACE CARD HAS BEEN TRUMPED.
5. IF YOU ARE ABLE TO +
ARE ABLE TO INDICATE THAT WE SHMDL TRY AGAIN TO CLOSE THE CLAP, WHICH I CALCULATE TO CHE ABOUT SHED MILK
4-5 MILLION
ILKION, I THINK
1.
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