CONFIDENTIAL
000774 MDADAN 2346
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WHO
WAS ANY QUESTION OF PRESSURE BEING APPLIED BY CHINA ON MTRC TO EXCLUDE BRITISH CONTRACTORS (YOUR PARA 3) MATHERS WOULD KNOW ABOUT IT. MOREOVER, THERE IS A SECOND BRITISH BIDDER ABB BREL SEEM TO BE SUFFERING NONE OF THE PROBLEMS CONFRONTING GEC-A. ACCORDING TO BTC, THEY ARE IN DETAILED DISCUSSION WITH MTRC AND HAVE BEEN TOLD THAT THE FINAL DECISION ON THE CONTRACT WILL BE TAKEN IN MID-JANUARY. THE4Y HAVE NOT PASSED ON TO BTC ANY SUSPICION OF DISCRIMINATION AGAINST BRITISH SUPPLIERS AND ARE APPARENTLY RATHER BULLISH. BTC BELIEVE THAT THE MORE LIKELY EXPLANATION OF GEC-A'S DIFFICULTIES IS THAT THEY HAVE IRRITATED MTRC, BY EXPECTING TO BE GIVEN AN OPPORTUNITY TO ADJUST THEIR BID.
3.
(II) CHEUNG MA RAILWAY.
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IN ESSENCE, THE HONG KONG GOVERNMENT WILL NEED TO DETERMINE WHETHER THE CHEUNG MA RAILWAY PROPOSAL IS COMPATIBLE WITH OUR RAILWAY DEVELOPMENT STRATEGY, WHICH IS LIKELY TO BE FINALISED EARLY NEXT YEAR. SEPARATELY, CHEUNG KONG NEED TO DO A GOOD DEAL MORE WORK TO CONVINCE US THAT THEY HAVE PUT FORWARD A VIABLE TRANSPORT PROPOSAL. BOTH OF THESE POINTS HAVE BEEN MADE TO CHEUNG KONG ON SEVERAL OCCASIONS BOTH IN WRITING AND DURING MEETINGS. BOTH LI KA-SHING AND HIS SON VICTOR LI ARE AWARE OF THE PRESENT POSITION AND KNOW WHAT IS REQUIRED OF THEM.
4.
TRANSPORT BRANCH HAVE PREPARED A NOTE ON THE LATEST DEVELOPMENTS ON THIS PROPOSAL WHICH WE ARE FAXING TO YOU SEPARATELY. MR.GOODLAD MAY WISH TO PASS THIS TO LORD PRIOR FOR INFORMATION AS IT STANDS OR DRAW ON IT IF HE WISHES TO SPEAK OR WRITE TO LORD PRIOR INSTEAD.
5.
ON LORD PRIOR'S MORE GENERAL CONCERNS (YOUR PARA 5) ABOUT OUR POLITICAL DIFFICULTIES WITH CHINA AFFECTING CONTRACTS, YOU
WILL HAVE SEEN CORNISH'S LETTER OF 22 DECEMBER TO BAKER, DTI. THIS QUOTES GORDON WU AS SAYING THAT HE WILL CONTINUE TO PROPOSE FOR HIS CHINA PROJECTS WHATEVER EQUIPMENT IS BEST IN TERMS OF TECHNICALITIES, PRICE AND DELIVERY, REGARDLESS OF ITS ORIGIN.
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