CONTAINER BERTHS AT HONG KONG
Background
1.
In preparation for the introduction of container shipping services
between Europe and the Far East and between the US and the Far East by
1972, the Hong Kong Government is developing a deep-sea container terminal
on reclaimed land at Kwai Chung, just west of the Kowloon peninsula. The
Hong Kong Government accordingly invited tenders in April for the development
of 4 container berths at this site. The awards made this month are as
follows:
No 1 berth
No 2 berth
No 3 berth
No 4 berth
Problem
2.
Modern Terminals Ltd on behalf of their majority
shareholder OCL/Ben Line Containers Ltd, which is
jointly owned by the UK consortium Overseas Containers Ltd (OCL) and the UK Company Ben Line (Containers) Ltd (which is controlled by Ellerman Line and Ben Line).
Kowloon Container Warehouse Co Ltd on behalf of
Oyama Shipping Co Ltd, a small Japanese line. Sea-Land/Orient on behalf of Sea-Land Service Inc
of the USA.
No serious bid.
OCL, who are a major British container ship operator combining the
container interests of 4 of the largest and most progressive British shipping lines (P & 0, Ocean, Furness Withy and British and Commonwealth) have indicated to the Board of Trade the importance to OCL of securing two berths (for which they put in bids) to handle the trade to be carried by
the new container service between Europe and the Far East to be introduced in June 1972 by them and Ben/Ellerman and by some other (German and Japanese) lines in the Far Eastern Freight Conference. A letter to the
Board of Trade from the Commercial Counsellor in the British Embassy in
Tokyo in July, resulting from an earlier expression of concern by OCL over
an approach by Oyama to the British Ambassador in Tokyo, was copied to
Sir John Cowperthwaite. Copies of this letter and of the reply are attached.
3.
The latest cause for concern to OCL is that their bid for a second
berth, No 2, alongside No 1 berth which was awarded to them, was rejected in
favour of a much higher bid by Oyama. In OCL's view Oyama's bid was about 2/3 higher than was prudent and was based on a flimsy and speculative
assessment of the amount of container traffic that Oyama could reasonably
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