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HKA 182/3
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074065
MDLIAN 3043
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FM BTC HONG KONG
TO PRIORITY DTI
TELNO INTRA 205
OF 03100OZ AUGUST 92
INFO PRIORITY FCO, ECGD
INFO ROUTINE PEKING, BANK OF ENGLAND, TREASURY
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Mr Cane
HONG KONG MAJOR PROJECTS
152
MY TELNO INTRA 198: AIRPORT PLATFORM
SUMMARY
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1. LARGEST OF THE AIRPORT CONTRACTS FOR THE SITE PREPARATION AWARDED TO THE JAPANESE-LED GROUP THAT INCLUDES COSTAIN AND BALLAST NEDHAM (BRITISH AEROSPACE), THOUGHT BETWEEN THEM TO ACCOUNT FOR 42 PERCENT OF POUNDS610 MILLION TOTAL. AIRPORT AUTHORITY GRATEFUL FOR SYMPATHETIC RESPONSE ON CREDIT FROM ECGD AND HMG.
2. THE PAA HAS CHOSEN THE AIRPORT PLATFORM CONTRACTORS CONSORTIUM, LED BY NISHIMATSU CONSTRUCTION, BUT IN WHICH COSTAIN AND BALLAST NEDHAM (BRITISH AEROSPACE) HAVE AN INTEREST. THE DECISION WAS TAKEN AT THE PAA BOARD MEETING ON 31 JULY. THE TENDER PRICE OF HKD9.041 BILLION (APPROX. GBP610 MILLION) WAS THE LOWEST OF THE FOUR SUBMITTED.
3. THE BALFOUR BEATTY-LED CONSORTIUM, WHICH EARLIER LAST WEEK WAS THOUGHT TO BE BEST PLACED, SUBMITTED THE SECOND LOWEST BID, BELIEVED TO BE ABOUT 6 MILLION POUNDS HIGHER THAN THE WINNER'S.
4. THE TENDER PRICE WILL BE VALID UNTIL 30 NOVEMBER 1992. THE PAA WILL NOW ISSUE A LETTER OF INTENT TO THE WINNING CONSORTIUM AND THE CONTRACT IS EXPECTED TO BE AWARDED WHEN DIFFERENCES WITH CHINA HAVE BEEN RESOLVED AND FUNDS APPROVED BY THE LEGISLATIVE COUNCIL.
5. THE FINAL DECISION TURNED LARGELY ON PRICE. THE ENGINEERING WAS RELATIVELY STRAIGHTFORWARD, THOUGH GIVEN THE COMPRESSED TIME- SCALE CLOSE ATTENTION WAS PAID TO THE PROBLEM OF SETTLING. THE EXPERTS CHOSE TO GO FOR A MARINE FILL, THE DREDGED SOLUTION, RATHER THAN THE ROCK FILL PROPOSED BY BALFOUR BEATTY.
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