CONFIDENTIAL
FM BTC HONG KONG
TO IMMEDIATE DTI
TELNO OTTER 229
OF 091015Z DECEMBER 91
AND TO FCO
CONFIDENTIAL
171
TOP COPY Q DIST?
071574
MDHIAN 5426
INFO IMMEDIATE TOKYO, SEOUL
HKB 182/3
DTI FOR HALL, PEP.
MY TELNO 220: HONG KONG AIRPORT PROJECT: MAIN BRIDGE CONTRACT.
SUMMARY
1.
TRAFALGAR HOUSE, THE MAIN BRITISH HOPE FOR THIS POUNDS 600 MILLION CONTRACT, HAVE SOME DIFFICULTIES WITH THEIR BID, BUT NONETHELESS ARE EXPECTING TO BE STRONGLY COMPETITIVE. TENDERS
CLOSE ON 16 DECEMBER. THE IMPLICATIONS NOT ONLY FOR BRITISH PROSPECTS FOR WINNING THIS CONTRACT, BUT FOR THE SUCCESS OF THE CONTRACT AS A WHOLE, ARE CONSIDERABLE.
DETAIL
2. MYERS, THE DIRECTOR RESPONSIBLE FOR PUTTING TOGETHER THE TRAFALGAR HOUSE-COSTAIN-MITSUI BID FOR THE CONTRACT FOR THE MAIN BRIDGE FOR THE HONG KONG AIRPORT PROJECT, WAS IN HONG KONG AT THE END OF LAST WEEK. I SAW HIM BRIEFLY ON 6 DECEMBER. HE ASKED TO
SEE ME URGENTLY ON 7 DECEMBER AND CALLED WHILE LORD CAITHNESS AND TIBBER, HIS PRIVATE SECRETARY, AND RICKETTS, HEAD OF HKD, FCO, WERE ALSO PRESENT AT MY FLAT, SO HE WAS ALSO ABLE TO MEET WITH THEM.
3. MYERS EXPLAINED THAT THIS WAS AN UNUSUALLY DIFFICULT
CONTRACT ON WHICH TO BID. BY DRAWING UP TERMS OF CONTRACT ON WHICH ALL THE RISK WERE PLACED ON THE CONTRACTOR, THE HONG KONG ADMINISTRATION WERE MAKING CONDITIONS MORE ONEROUS THAN ANY HE HAD EVER KNOW. HE WAS PLEASED TO HAVE HEARD OF ECGD'S AGREEMENT IN PRINCIPLE TO COVER THEIR BID. HOWEVER THIS WOULD PROBABLY ONLY COVER ABOUT HALF THE VALUE OF THE BID SINCE THAT WAS THE VALUE OF PROBABLE SUPPLIES FROM THE UK. MOREOVER MUCH OF THE EXPENDITURE
WHICH WILL BE UNDER THE ECGD UMBRELLA WOULD COME EARLY IN THE CONTRACT. MOST OF THE LATER, AND THEREFORE MORE RISKY, EXPENDITURE, WOULD COME LATER IN THE CONTRACT PERIOD. NEITHER
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CONFIDENTIAL