CONFIDENTIAL
174445
MDLIAN 3530
CONTAINED IN THE TENDER DOCUMENTS WILL GIVE AN ADVANTAGE TO THE JAPANESE SINCE THEY REQUIRE A TYPE OF CABLE SPINNING IN WHICH THEY SPECIALISE. GORDON WU HAS MADE A SIMILAR PUBLIC COMMENT IN
THE LAST FEW DAYS.
(B) THE PLATFORM CONTRACT
6. A MEMBER OF THE PROVISIONAL AIRPORT AUTHORITY HAS TOLD ME IN CONFIDENCE THAT THEY HAVE AGREED THE PRE-QUALIFICATION OF GROUPS FOR THE PLATFORM. THERE WILL BE SIX, WHICH WILL INCLUDE BOTH THE BALFOUR BEATTY LED GROUP AND THE GROUP WHICH INCLUDES COSTAIN AND TRAFALGAR HOUSE. HE DID NOT MENTION NOR RECALL THE GROUP WHICH INCLUDES MOWLEM. COMPANIES ARE ABOUT TO BE INFORMED.
(C) TUNG CHUNG DEVELOPMENT PHASE I SITE FORMATION
·
7 PRE-QUALIFICATION BIDS FOR THIS POUNDS 60 MILLION (HKD 750 MILLION) PART OF THE PROJECT WERE INVITED ON 2 AUGUST AND CLOSED
ON 30 AUGUST. IT INVOLVES RECLAMATION OF 48 HECTARES AND LAND SITE FORMATION OF 15 HECTARES, DREDGING FOR THE RECLAMATION, TOGETHER WITH ASSOCIATED SEA WALLS AND BREAKWATERS, AND WILL FORM THE LAND AREA ON LANTAU IMMEDIATELY ADJACENT TO CHEK LAP KOK, WHERE A NEW TOWN, HOTELS ETC WILL BE LOCATED. THERE WERE 58 APPLICATIONS FOR THE DOCUMENTS BUT ONLY 13 WERE SUBMITTED. TWO WERE FROM BRITISH FIRMS: AMEC CONSTRUCTION SOUTH EAST ASIA AND TILEMAN HOLDINGS. WE COULD HAVE HOPED FOR MORE, AFTER CONSIDERABLE EFFORTS BY US AND THE DTI TO INTEREST BRITISH COMPANIES. TENDERS WILL BE INVITED IN LATE OCTOBER. AMEC ARE DETERMINED TO TRY TO BREAK INTO THE AIRPORT SCENE, HAVING MISSED THE BRIDGES AND PLATFORM OPPORTUNITIES. THEY CAME WITH A STRONG TEAM SOME WEEKS AGO, AND THEIR CHAIRMAN (KISJES) IS COMING WITH ANOTHER ON 17 OCTOBER. THEY DESERVE STRONG DTI BACKING: WE ARE
HELPING THEM HERE.
(D) CONTRACT TERMS
8. THERE IS CLEARLY RUMBLING DISCONTENT AMONG THOSE PREPARING BIDS FOR THE BRIDGES, A ND THOSE LIKELY TO QUALIFY TO BID FOR THE PLATFORM, OVER THE HKG'S TERMS, WHICH WILL REQUIRE THE CONTRACTORS TO BEAR ALL THE RISK IN A FIXED PRICE CONTRACT FOR THE FULL PERIOD OF THE WORK, ESPECIALLY IN VIEW OF HONG KONG'S CURRENT INFLATION RATE OF OVER 12 PERCENT. THERE HAVE BEEN PRESS REPORTS THAT THE ALL JAPANESE GROUP MAY EVEN DECLINE TO BID FOR THE BRIDGE ON THESE TERMS. WHILE I ASSUME THIS TO BE UNLIKELY IT IS SURELY SIGNIFICANT THAT THIS PROBLEM APPEARS TO HAVE BEEN THE FIRST SUBJECT RAISED BY THE PRESIDENT OF CITOH WHEN HE CALLED ON THE PRIME MINISTER ON 17 SEPTEMBER (PRIVATE SECRETARY'S MINUTE TO
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CONFIDENTIAL