CONFIDENTIAL
176523
MDHIAN 8198
THE PORT ELEMENT OF HKD 50 BILLION COULD BE SEPARATED SINCE THAT WOULD ATTRACT PRIVATE FINANCING AND WOULD COME LATER. THEIR RESERVES OF HKD 70 BILLION COULD EFFECTIVELY MEET THE TOTAL COSTS ALTHOUGH THEY HAD NO INTENTION OF USING ALL THEIR RESOURCES TO THAT END: THE MONEY WOULD BE RAISED FROM REVENUE AND BY BELT TIGHTENING. EARLIER ADVICE FROM SCHRODERS HAD INDICATED THAT THEY DID NOT NEED TO THROW IN PROPERTY RIGHTS OR OTHER SWEETENERS TO ATTRACT PRIVATE INVESTMENT IN THE PROJECT INCLUDING THE FIXED CROSSING AND THE RAIL LINK BUT THIS MAY NOW BE RECONSIDERED.
10. THE MAIN FINANCIAL CONSULTANCY, PROVIDING OVERALL FINANCIAL ADVICE, WILL BE AWARDED IN JUNE. IT MAY BE COMBINED WITH THE FINANCIAL CONSULTANCY FOR THE AIRPORT ITSELF. A DECISION HAS ALREADY BEEN TAKEN TO MERGE THE PLANNED FINANCIAL CONSULTANCIES FOR THE LANTAU FIXED LINK AND THE RAIL LINK. FOR THIS THERE IS A FRONT RUNNER, AND AN ANNOUNCEMENT IS EXPECTED IN THE NEXT WEEK OR TWO. WE KNOW HAMBOS AND STANDARD CHARTERED ASIA ARE CHASING THE OVERALL CONSULTANCY, AND ASSUME OTHER BRITISH MERCHANT BANKS ARE INTERESTED IN THESE OPENINGS ALTHOUGH NONE HAVE BEEN IN CONTACT WITH US.
11.
IN ADDITION TO THE WEST KOWLOON RECLAMATION, AN EARLY START IS ALSO TO BE MADE ON THE WESTERN END OF THE WANCHAI RECLAMATION ON HONG KONG ISLAND SINCE THAT IS WHERE THE TERMINAL FOR THE RAIL LINK IS TO BE LOCATED.
12. IT IS CLEAR THAT A LARGE NUMBER OF CONTRACTS WILL BE COMING UP VERY SOON. I HOPE WE WILL HAVE BRITISH CONTENDERS FOR ALL OF THEM. AT PRESENT THE ONLY ACTIVE BRITISH CONTENDERS OF WHICH I AM AWARE, APART FROM THE CONSULTANTS FOR BOTH ENGINEERING AND FINANCIAL ADVICE, REMAINS THE COSTAIN/TRAFALGAR HOUSE GROUP IN PURSUIT OF THE CHEK LAP KOK RECLAMATION AND THE FIXED LINKS. I TRUST THEREFORE THAT IT WILL BE POSSIBLE EITHER TO ENCOURAGE THAT GROUP TO WIDEN THEIR AREAS OF INTEREST OR THAT OTHER MAJOR BRITISH CONSTRUCTION COMPANIES CAN BE ENCOURAGED TO PURSUE OTHER PARTS OF THE PROJECT. THE LATTER WOULD SEEM TO BE THE BETTER PROSPECT SINCE NOT ONLY WILL THE HONG KONG GOVERNMENT BE RELUCTANT TO SEE ANY ONE GROUP GET TOO MUCH OF THE WORK, BUT THE CLAIM ON RESOURCES, BOTH TECHNICAL AND FINANCIAL, WILL BE SO GREAT THAT THE INVOLVEMENT BY OTHER MAJOR BRITISH COMPANIES WOULD BE MORE EFFECTIVE.
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CONFIDENTIAL