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very real Chinese concerns that the whole object of the exercise is to syphon off the riches of Hong Kong to the UK. They should have been reassured in some part by the MOU arrangements, but the fear will persist, and the risks that this would become fanned into a public controversy are not to be ignored.
6.
One question that arises, as you say, is whether the consortia should be encouraged to involve British as well as Chinese firms. I have discussed this with Mr Adams of the DTI, who points out that the DTI have no interest in simply a fig-leaf participation by British firms. What is wanted is that the British involvement should be substantial. This is the rationale behind the Anglo-Japanese consortium. In fact, I believe that, of the strongest bidders, British firms are significant in the Anglo-Japanese consortium and the French consortium in bidding for the Bridge. They are not represented in the Japanese consortium led by C Itoh, and would be unlikely to gain more than a toe-hold if that was made a condition. For the Airport Platform, British firms are quite well represented in the bidding.
7.
Of course, we should urge the Hong Kong Government not to tilt the playing-field against British firms by an over-scrupulous concern to appear to be treating all firms equally. I really do not think that this is the case at present. There were suspicions about this last year, when the Hong Kong Government refused to accept the tactic being pursued by Trafalgar House for a pre-emptive bid. But we are ensuring that all the British firms talk in detail with the Hong Kong Government about the tenders, and what variations upon them they could offer, before putting in their bids. Since the tenders are not due to be in before mid-December, there is plenty of time for these discussions to take place, and so the issue of discrimination against British firms is not for the moment a real one.
8.
We shall need to watch the situation at the turn of the year, as the bids are evaluated. But the nature of the tendering process in Hong Kong (where, for many years, there has been great attention to ways of ensuring that there is no favouritism or corruption in the procedures) means that it is quite impossible for the Governor to intervene.
Lord Caithness and I have, however, spoken both to the Governor and to the Chief Secretary to impress upon them our hope that, in view of all the political efforts made by the British Government to secure the Airport Agreement, it would be very odd indeed if British firms got none of the pickings. And we have pointed to the fact that, of the five major contracts so far awarded, two have gone to the Japanese and two to the Americans.
9. I have impressed upon both the Governor and
Sir David Ford that what we want to avoid are surprises.
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