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041112
MDLIAN 1456
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FM TOKYO
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RECEIVED IN **e
009AUGO
O DIST?
TO IMMEDIATE BTC HONG KONG TELNO 5
OF 08050OZ AUGUST 90
AND TO PRIORITY FCO
INFO ROUTINE PEKING
HONG KONG AIRPORT:
1.
THE JAPANESE DIMENSION
CALL BY MITSUI CONFIRMS PROGRESS TOWARDS GETTING
KEY JAPANESE ELEMENTS IN LINE. BUT SOME DOUBTS
PRINCIPALLY OVER WORKSHARE REMAIN.
-
DETAIL
2.
UTSUGI AND TAKEYAMA (GENERAL MANAGER IN MITSUI'S OVERSEAS PROPERTY DEVELOPMENT DIVISION AND DIRECTORS OF
AJCL) CALLED ON ME ON 7 AUGUST AT THE REQUEST OF PRESIDENT KUMAGAI TO BRIEF ON THE LATEST DEVELOPMENTS ON THE JAPANESE COMPANIES' SIDE.
3.
MITSUI CONFIRMED POSITIVE PROGRESS TOWARDS COOPTION OF KEY JAPANESE ELEMENTS INTO THE AJC GROUPING. THE ''BIG FOUR'' FABRICATORS (NIPPON STEEL, MHI, NKK, IHI) ALL NOW APPEARED TO AGREE THAT TEAMING UP WITH AJC WAS ''INDISPENSABLE'' TO SUCCESSFUL PARTICIPATION IN THE LANTAU FIXED LINK. BUT THE WORDING ON WORKSHARE REMAINED AN OBSTACLE TO CONCLUDING A WRITTEN AGREEMENT FOR THEIR PARTICIPATION. UTSUGI SAID THAT A 50-50 WORKSHARE COULD BE AGREED ''IN PRINCIPLE'', BUT THE ''BIG FOUR' INSISTED THAT IT SHOULD BE A 50-50 SPLIT IN VALUE OF WORK SPREAD OVER THE ENTIRE FIXED LINK PROJECT. IN THEIR VIEW THE ALLOCATION OF WORK SHOULD NATURALLY TAKE INTO ACCOUNT THE PRICE AND QUALITY OF THE INPUTS WHICH THE RESPECTIVE PARTICIPANTS COULD SUPPLY. IT SHOULD NOT SIMPLY BE A CASE OF CARVING UP PORTIONS OF THE BRIDGE AND ALLOCATING THEM TO DIFFERENT PARTICIPANTS. UTSUGI CLEARLY AGREED WITH THE LOGIC OF THIS POSITION AND ACKNOWLEDGED THAT IT COULD LEAD TO AN OUTCOME WHICH WAS ''NOT QUITE 50-50'' (HE INCLUDED 60-40 IN THIS RANGE EXCLAM). IT COULD ALSO MEAN SOME DISCREPANCY IN THE QUALITY OF WORK OBTAINED BY PARTNERS. CHE HAD SAID EARLIER THAT THE JAPANESE FABRICATORS WANTED TO DO ALL THE WORK ON THE UPPER PART OF THE BRIDGE, BECAUSE THEY COULD SUPPLY MORE COMPETITIVELY THAN COULD THE UK.)
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