PS
нки 10312
COMMERCIAL IN CONFIDENCE
F
1000
217/5
2118
A
"
B
110
C
HONG KONG : KOWLOON-CANTON RAILWAY (KOR) Mas
Problem
1.
How to support the Minister of State for Industry's letter
of 14 August requesting that cost escalation cover be agreed for
the extension of Metro-Cammell Ltd's contract for the supply of
rolling stock to the KCR.
Recommendation
2.
I recommend that the Lord Privy Seal write to the Chief
Secretary to the Treasury supporting the request. TRED concur.
Background and Argument
3.
The background to this request is summarised in the
Minister of State for Industry's letter of 14 August to Mr Brittan.
Apart from the arguments put forward by Mr Baker on the commercial
desirability of CEC cover, there are other strong arguments in
favour of supporting the request. These are set out in the
draft letter. The Senior British Trade Commissioner in Hong Kong
is strongly in favour of the proposal ( paragraph 4 of his
CREDA 199 of 17 August).
He has been informed by the Hong Kong
Government that, if an extension of the contract could not be
agreed, they would go to open tender (BTC Telegram No CREDA 203
This would probably prove more expensive in the
of 20 August).
long term.
21 August 1981
сс
PS/Mr Ridley Mr Goodison TRED
бир
R D Clift
Hong Kong and General Department
COMMERCIAL IN CONFIDENCE