CONFIDENTIAL
HKB 18213
101
174445
MDLIAN 3530
CONFIDENTIAL
FM BTC HONG KONG
TO PRIORITY DTI
TELNO OTTER 180
OF 301019Z SEPTEMBER 91
AND TO PRIORITY FCO
INFO PRIORITY ECGD, TOKYO
(CORRECTED VERSION)
TOP COPY DIST?
FOR ADAMS, HEAD OF PEP: MILES, HEAD OF JOINT DIRECTORATE: AND OT2/2
HONG KONG AIRPORT PROJECT
SUMMARY
1. THE PACE CONTINUES TO QUICKEN. RECENT DEVELOPMENTS INCLUDE AN APPROACH TO THOSE BIDDING FOR THE BRIDGE CONTRACT TO INCLUDE FINANCING PROPOSALS, THE DISQUALIFICATION OF GORDON WU'S GROUP FROM THOSE BIDDING FOR THE BRIDGES A DECISION (BUT NO ANNOUNCEMENT) ON THE PRE-QUALIFIERS FOR THE AIRPORT PLATFORM, AND SIMILARLY FOR THE RECLAMATION AREA FOR THE AIRPORT NEW TOWN, AND CONTINUING DISCONTENT AMONG CONTRACTORS OVER THE HK GOVERNMENT'S CONDITIONS OF CONTRACT. MIXED FORTUNES FOR BRITISH COMPANIES, BUT WE STILL HAVE CONTENDERS FOR THE MAJOR ELEMENTS IN THE PROJECT.
DETAIL
(A)
BRIDGE CONTRACT
(I) FINANCING
2. THE FCO WAS INFORMED IN HKG TELNO 2804 OF 9 SEPTEMBER (WHICH WE WERE NOT SHOWN HERE UNTIL 22 SEPTEMBER BUT WHICH PRESUMABLY WAS SHARED WITH THE DTI AND ECGD) THAT AN ADDENDUM WOULD BE ADDED ON 18 SEPTEMBER TO THE TENDER DOCUMENTS FOR THE TSING MA BRIDGE, CALLING FOR FINANCING PROPOSALS TO BE INCLUDED WITH THE BID, UNDER THREE DIFFERENT OPTIONS. THIS HAS SINCE BEEN MADE PUBLIC AND I HAVE SOUGHT REACTIONS FROM CERTAIN BRITISH MERCHANT BANKS HERE. NEITHER THEY, NOR WE, KNOW THE DETAILS OF THE TERMS REQUESTED, BUT THEIR REACTIONS ARE THAT UNLESS MORE INFORMATION HAS BEEN INCLUDED IN THE ADDENDUM THAN HAS BEEN MADE PUBLIC CAND WHAT HAS BEEN MADE PUBLIC IS MUCH THE SAME AS IN TELNO 2804) THEN IT IS UNLIKELY THAT BANKS WILL QUOTE FIRM TERMS TO THE TENDERING GROUPS. THE SO-CALLED SHORT TERM LENDING UP TO 1997 IS FOR A LONGER PERIOD THAN MOST SHORT TERM LENDING AND THEREFORE MAY
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