(
CONFIDENTIAL
FM DTI
TO IMMEDIATE BTC HONG KONG
TELNO OTTER 266
OF 10170OZ SEPTEMBER 91
CONFIDENTIAL
M
42
104433
MDHIAN 2165
dhvis 027/€ ir comme
Mr FURDWAN
Pa
FOR HEAP FROM ROGERS PEP
ED
11/9
YOUR TELNO INDUS 8: VISIT OF K Y YEUNG
THERE IS LITTLE OF A SPECIFIC NATURE TO REPORT FROM YEUNG'S VISIT. HE SAW DEWE MATTHEWS (SCHRODERS) AND TRAFALGAR HOUSE, BUT FOR VARIOUS REASONS WE DID NOT IN THE END SEE HIM OURSELVES. THE FOLLOWING ACCOUNT IS ESSENTIALLY FROM DEWE MATTHEWS: MY BRIEF DISCUSSION WITH TRAFALGAR DID NOT ADD
VERY MUCH.
2.
DEWE MATTHEWS SAID THAT IT HAD BEEN A USEFUL DISCUSSION, THOUGH THERE WAS STILL CONSIDERABLE LACK OF CLARITY IN KEY AREAS. YEUNG WAS CLEAR THAT BIDS FOR THE FIXED CROSSING WOULD
ESSENTIALLY BE EVALUATED ON THE BASIS OF THE COMMERCIAL AND TECHNICAL PROPOSALS. BUT THEY ALSO WANTED AN ACCOMPANYING FINANCING PACKAGE, AND THIS WOULD BE LOOKED AT SEPARATELY. AN ADDENDUM TO THE BID DOCUMENTATION WAS EXPECTED SHORTLY (THE DATE OF 18 SEPTEMBER HAS BEEN MENTIONED ELSEWHERE, BUT IT WILL PROBABLY BE LATER) AND THIS WOULD CLARIFY WHAT WAS EXPECTED. THEY WERE EVIDENTLY THINKING OF A STANDBY FACILITY WHICH THEY WOULD ONLY DRAW DOWN NEAR COMPLETION OF THE CROSSING FOR THE BENEFIT OF A CONCESSION COMPANY WHICH OBVIOUSLY DOES NOT YET EXIST. DEWE MATTHEWS COMMENTED THAT HE WAS NOT CLEAR THAT YEUNG REALLY UNDERSTOOD THE IMPLICATIONS OF WHAT HE APPEARED TO BE LOOKING FOR. CLEARLY THE TERMS AND CONDITIONS OF THE CONCESSION, AND ISSUES LIKE TRAFFIC LEVELS AND THE VIABILITY OF THE COMPANY, WOULD BE FUNDAMENTAL: THE PRESUMPTION WAS THAT THE ADDENDUM WOULD INCLUDE SOME MATERIAL IN THESE AREAS, BUT IT WAS NOT CLEAR WHAT. IT WAS FAIRLY CLEAR THAT THERE WAS STILL DEBATE WITHIN HKG ABOUT THE RIGHT WAY FORWARD: THEY WERE TAKING ADVICE FROM MORGAN STANLEY ON THIS. DEWE MATTHEWS SAID HE HAD TOLD YEUNG THAT MORGAN STANLEY HAD NO EXPERIENCE IN THIS FIELD, AND THAT THEY SHOULD TALK TO KLEINWORTS.
I GATHER THAT SIR DAVID FORD WILL BE SEEING MITSUI ON 11 SEPTEMBER, AND THEY ARE BEING PRIMED TO EXPLORE HIS
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CONFIDENTIAL