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(a) the contract was in several parts,
e.g. aprons, runways, terminal buildings and freight buildings
the first of which has already been put out to tender;
(b) public opinion would insist on
contracts being submitted to public tender;
(c)
it would create great difficulties
over the use of local materials such
as cement and steel reinforcing bars.
The Governor also emphasised that it would not be possible to avoid public tender.
4. (c) above puzzles me a little, and I do not know whether Moreton argued the point. But we never envisaged a British contractor
importing materials available locally and
obviously more cheaply, and had excluded such items from our calculation of the possible "British content" eligible for ECGD-backed
finance.
5. On this aspect of the discussions Moreton concludes that it will not be possible to
persuade Hong Kong to place the whole contract in British hands on the basis we were proposing. But it was clear to him that Hong Kong would
regard it as a helpful contribution if HMG
were to let it be known in advance that ECGD
cover would be available for any part of the
contract awarded to British firms. He
understands, however, that a public declaration
on these lines could have its disadvantages
for us in that it might stimulate counter
offers from other countries.
6. The discussions next turned to a
development of which I think you may be
unaware. Hong Kong have submitted applica- tions for a 50% C.D. & W. grant towards the cost of the improved air traffic control system (see paragraph 3(v) of our memorandum); the amount involved is £(300,000), i.e. 50% of the estimated total cost of £(600,000). There
are precedents for the use of C.D. & W. funds
/ for such
Figures in brackets
to be confirmed
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