(b)

(c)

(a)

The Airport Platform

As already noted, the airport is to be constructed on reclaimed land between two islands; and major reclamation work is required at an early stage not least because a considerable period is required to allow the ground to settle before construction work begins. The Anglo/Japanese consortium had planned to submit a pre- emptive bid for this at this stage, but the HKG has made it clear that this would not be welcome, both because various key design parameters have not been decided, and because it would complicate discussions with the PRC - see below para 12.

The Airport Itself (ie terminal buildings, runways, equipment such as radar)

These contracts are not expected until a later stage but, with our support, the UK Airports Group (a consortium of British firms in this sector) made a very successful presentation to the Hong Kong Government in the Spring of

A further presentation is likely this Spring.

The Rail Link

This too is likely to be a later contract. British firms such as Metro Cammell and Balfour Beatty have a good record on rail work in Hong Kong and should be well placed to bid strongly for this work. Metro-Cammell have a small assembly plant in Hong Kong and, since their first contact in 1978, they have supplied over a thousand railway carriages for the Kowloon Canton Railway (KCR) and the Mass Transit Railway Corporation (MTRC).

There have been reports in Hong Kong that the HKG is considering proceeding without a rail link to the airport at all; but our contacts tend to confirm that a rail link is considered essential it is simply the timing that is in question, and one view is that the rail link is not required until a year or two after the airport is open.

CURRENT ISSUES

Relations with the Hong Kong Government (HKG)

7. Discussions on the airport project have been taking place

Sverrigh against a backcloth of complex issues relating to the Transfer

of Power in 1997, Tiananmen Square, the controversy about passports, rights of abode, etc. The background to discussion about the airport and other projects is therefore unusually complex and sensitive.

8. Hong Kong's prosperity is founded on an open market and the presumption of free trade and open competition. The HKG's decisions are scrutinised vigorously, and we can expect them to be scrupulous in the process of awarding projects. There can be no expectation that the HKG will simply award these

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