CONFIDENTIAL
176760
MDHOAN 2600
(ii) CHEUNG MA RAILWAY
Lord Prior said that Li Ka Shing had enlisted his help in Lobbying for the Cheung Ma railway. GEC were also keen for the railway to proceed as they would almost certainly be awarded some of the major contracts. Lord Prior understood that HKG did not favour the project at this stage, and he acknowledged that it was clear that Cheung Kong had not done their homework sufficiently before putting forward the proposal. Lord Prior handed to the Minister a letter which he had sent to Li Ka Shing setting out
He HKG's reservations over the project as he understands them. had told Li that he would raise the matter with the Governor, and suggested that we copy to him his Letter to Li (we are faxing this to you). Lord Prior said he would welcome any further information or guidance which he could pass to Li.
5.
Lord Prior also raised in a fairly low-key manner GEC's concern that our political difficulties with China would affect their chances of winning contracts in China. He said that they were bidding for up to 4 power station contracts in China and he feared that major Hong Kong entrepreneurs such as Li Ka Shing and Gordon Wu might exclude British companies from the bidding to appease the Chinese Government. He said that some people had suggested that GEC had lost the Canton Metro contract as a result
Mr of the Governor's policy on constitutional development. Goodlad rebutted the final point strongly saying that it was HMG's policy (as opposed to the Governor's alone) and that it was fully consistent with our policy towards Hong Kong since the signing of the Joint Declaration.
6. We recognise that you may feel that it would be invidious for HKG to take up the case of an individual British bidder with the MTRC. If so, grateful if SBTC could take action. Any further background would obviously be useful, even if it is not for passing to Lord Prior. Grateful also to know if there is anything further that Lord Prior can tell Li Ka Shing on the Cheung Ma railway. Mr Goodlad told Lord Prior that we would try to respond to him tomorrow (23 December).
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