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Province, to allow Hong Kong to follow up its success in
exporting manufacturing jobs there by transferring
labour-intensive service sector jobs (airline accounts,
financial paperwork etc) as well.
6.
On the airport project, Rafael Hui (Project Coordinator in HKG) briefed me on the present position. One point which
I had not appreciated clearly before was the extent to which
HKG hopes to lay off the risks in the project through lump sum contracts and project insurance. Mr Heap was concerned
that the consortia would respond by putting in very high
tenders to cover themselves against unforseeable risks (or
that some consortia such as the Koreans might bid
unrealistically low but then be unable to complete the contracts if the going got rough). Since returning I have mentioned the Korean point to Mr Adams at the DTI, who tells
me that the Koreans are now well-known internationally for
biting off more than they can chew. One more reason for HKG
to look beyond the numerical bottom line in awarding
contracts.
7. I asked businessmen whether they though that the airport project would crowd out other capital projects. Most thought that this would be manageable (the airport project was not significantly larger than the MTR project at
constant prices). Goodstadt was more worried that the
project would soak up energy and talent within HKG at a time
when there were many other requirements for innovative new thinking.
8.
Mr Galsworthy will be holding the first meeting of the Airport Committee on 12 November. It is unlikely to get into substance immediately. But in the months ahead it will
need to take three issues: a franchise for the MTR
corporation to operate the airport's railway; the franchise
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