CONFIDENTIAL
FM HONG KONG
TO IMMEDIATE FCO
TELNO 3473
CONFIDENTIAL
CAMMENDED DITRIBUTION)
OF 05102OZ NOVEMBER 91
Warz (82
YOUR TELNO 1938: HONG KONG AIRPORT PROJECT: FINANCIAL PROPOSALS AND MAIN BRIDGE CONTRACT.
1.
47
134227
MDHIAN 0626
TOP COPY Q DIST?
THE VIEW IN TUR SEEMS TO HAVE SUFFERED FROM EXCESSIVE COMPRESSION.
2.
PREQUALIFIED TENDERERS FOR THE TSING MA BRIDGE CONTRACT HAVE
BEEN TOLD IN WRITING AND ORALLY THAT THE INCLUSION OF AN OFFER OF FINANCE IS NOT (NOT) A REQUIREMENT OF THE TENDER. THAT SAID, THE DOCUMENTS ALSO MAKE IT CLEAR THAT OFFERS OF FINANCE MAY ENHANCE A TENDER IF THEY ARE STRUCTURED TO ASSIST GOVERNMENT IN ITS
OBJECTIVE OF PRIVATIZING THE BRIDGE AND/OR ARE TERMS MORE FAVOURABLE THAN THOSE CURRENTLY AVAILABLE TO GOVERNMENT FOR NON-
CONTRACT-RELATED FINANCING. WE RESERVE THE RIGHT TO ACCEPT A BID
WITH OR WITHOUT A FINANCE OFFER.
3.
NATURALLY, IN A HIGHLY COMPETITIVE SITUATION ANY CONSORTIUM WHICH DOES NOT MAKE AN OFFER OF FINANCE MAY FIND ITSELF AT A DISADVANTAGE AS AGAINST THOSE WHICH DO. CONSORTIA WOULD THEREFORE BE WELL ADVISED TO INCLUDE AN OFFER OF FINANCE. IT WAS THIS MESSAGE THAT BOTH I AND THE FINANCIAL SECRETARY (NOT THE SECRETARY FOR THE TREASURY) WERE PASSING ON TO BAYNE AND BROADBENT. I SAID THAT I HAD HEARD THAT THE ANGLO-JAPANESE CONSORTIUM HAD NOT SHOWN MUCH INTEREST IN THE FINANCIAL PACKAGE. ON THE OTHER HAND, THE ALL-JAPANESE GROUP HAD. IT SHOULD BE HELPFUL FOR THEM TO KNOW THIS.
4.
I ALSO SAID THAT I HOPED THERE WOULD BE NO DIFFICULTY WITH ECGD COVER FOR THE ANGLO-JAPANESE CONSORTIUM BID FOR THE LANTAU FIXED CROSSING. THIS WAS IMPORTANT FOR TWO REASONS:
(A) POLITICALLY, HMG MUST NOT BE SEEN TO BE HESITANT ABOUT HONG KONG RISK: AND
(B) COMMERCIALLY, THERE WOULD BE VERY STRONG COMPETITION FOR THE LFC CONTRACT. NOBODY HERE WANTED TO SEE UK BIDS PUT AT A DISADVANTAGE BY PROBLEMS ABOUT ADEQUATE ECGD COVERAGE.
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