CONFIDENTIAL

054050

MDLIAN 7797

6. MRS ANSON CHAN, DURING A CALL BY BALLARD AT WHICH I WAS PRESENT, SAID THAT THE TARGET COMPLETION DATE FOR THE AIRPORT OF JANUARY 1997 WAS STILL VALID FOR ALL PLANNING PURPOSES BUT ADDED THAT THEY WOULD RATHER LET THAT DEADLINE SLIP THAN PAY HEAVILY OVER THE ODDS

TO ACHIEVE IT. THIS IS ONE OF THE FIRST INDICATIONS BY ANYONE ON

THE HONG KONG GOVERNMENT SIDE THAT THE TARGET DATE MIGHT NOT BE

ACHIEVABLE AT AN ACCEPTABLE PRICE.

THE JAPANESE DIMENSION (YRTUR)

7. WE ALSO HAVE HEARD OF THE DISQUIET BY TRAFALGAR HOUSE/COSTAIN AT

MITSUI'S PERFORMANCE. ACCORDING TO ONE SOURCE MITSUI HAVE TOLD THEM THAT THEY ONLY CONSIDER THEMSELVES BOUND TO THAT GROUP FOR A PRE-EMPTIVE BID AND THAT IF THAT DOES NOT WORK THEN THEY WOULD FEEL FREE TO FIND OTHER PARTNERS. IT WAS ALWAYS ON THE CARDS THAT MITSUI WOULD IN ANY EVENT REBEL AT AN EARLY STAGE AGAINST THE ROLE THAT TRAFALGAR HOUSE SEEMED TO HAVE ENVISAGED FOR THEM WHEREBY MITSUI WOULD BE ASKED TO PROVIDE MOST OF THE FINANCIAL SUPPORT AND TRAFALGAR HOUSE/COSTAIN GET MOST OF THE WORK. ALTHOUGH WE HAVE LITTLE INFORMATION ON THE COMPOSITION OF OTHER COMPETING GROUPS, IT IS CLEAR THAT MOST OF THE LEADING JAPANESE PLAYERS ARE IN CONTENTION. WE UNDERSTAND THAT KIER OF THE UK (BEAZER GROUP) HAVE THEIR HAT IN THE RING FOR THE FIXED LINKS AND THAT IT LIKELY THAT THEY ARE PART OF A JAPANESE LED GROUP. THE HONG KONG GOVERNMENT TELL US THAT THEY HAD 48 CONTENDERS EXPRESSING AN INTEREST IN THE FIXED LINKS BY THE CLOSE OF THEIR RECENT DEADLINE.

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MR GILLMORE

MR MCLAREN MR CARRICK

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