RESTRICTED
HKB 182/3
121
106147
MDLIAN 9861
1 2 NOV 1991
28/10/91
AMENDED DISTRIBUTION
TOP COPY Q DIST?
RESTRICTED
FM PEKING
TO ROUTINE F C 0
TELNO 1821
OF 29063OZ OCTOBER 91
AND TO ROUTINE BTC HONG KONG
117
(116
YOUR TELNO 213 TO BTC HONG KONG AND BTC HONG KONG TELNO 301:
BALFOUR BEATTY AND PADS
1. MALWYN JONES, MANAGING DIRECTOR OF BALFOUR BEATTY CONSTRUCTION INTERNATIONAL, CALLED ON ME AT SHORT NOTICE ON THE AFTERNOON OF 25 OCTOBER TO DISCUSS THE BALFOUR BEATTY APPROACH
TO THE PADS PROJECT.
2.
WE WENT OVER MUCH OF THE GROUND COVERED IN JONES' CONVERSATION WITH BURNS REPORTED IN TUR.
BALFOUR BEATTY HAD, JONES SAID, WAITED UNTIL AFTER THE PRIME MINISTER'S VISIT TO CHINA AND HONG KONG BEFORE DECIDING WHETHER TO INVOLVE CHINESE COMPANIES IN THEIR BID FOR THE SITE PREPARATION PROJECT. HE WAS NOW VISITING PEKING (FOR THE FIRST TIME) TO DISCUSS THE CITIC APPROACH VIA SIR R DAVIDSON. BB HAD ORIGINALLY PLANNED TO LOOK TO CITIC FOR BLASTING SERVICES AND EXPLOSIVE SUPPLY, BUT IT HAD BECOME CLEAR THAT CITIC NOW WISHED TO TAKE ON A LARGER ROLE. JONES WAS SEEING CITIC VICE PRESIDENT WANG JUN THE NEXT DAY TO DISCUSS THIS IN MORE DETAIL. I COMMENDED CITIC AS A COMMERCIALLY VIABLE ORGANISATION WITH GOOD POLITICAL
CONNECTIONS.
3.
JONES AGAIN RAISED THE QUESTION OF PRE-ALLOCATION OF CONTRACTS. HE HAD HEARD THAT A DEAL HAD BEEN STRUCK BETWEEN BRITAIN AND CHINA TO SELECT COMPANIES FOR CERTAIN ELEMENTS OF THE PROJECT. I POINTED OUT THAT BECAUSE OF THE TRANSPARENT BIDDING PROCEDURES EMPLOYED IN HONG KONG SUCH PRE-SELECTION WOULD BE IMPOSSIBLE. THERE WAS NO QUESTION OF A TILTED PLAYING FIELD.
4. JONES ALSO RAISED THE QUESTION OF CHINESE GOVERNMENT APPROVAL FOR CHINESE CORPORATIONS WHO WISHED TO BE INVOLVED IN THE PADS PROJECT, AND THE SUGGESTION THAT APPROVAL WOULD NOT BE FORTHCOMING UNTIL IT BECAME CLEARER WHICH CONSORTIUM WAS LIKELY TO WIN. I SAID THAT THIS SEEMED HIGHLY IMPROBABLE. THE CHINESE COULD NOT DICTATE WHO WON CONTRACTS, AND WOULD NOT TRY
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