TNAG-0272-FCO40-308-Scheme-for-development-of-container-terminal-at-Hong-Kong-1970 — Page 38

1

At their press conference (re addendum) KCW talked of 100,000-180,000

containers a year.

Oyama's strong suit was his backing in Japan from interests other than the main international shipping Lines, with a link to Mitsubishi who would, we understand, obtain building contracts for the No. 2 berth.

The MTL tender price was very close on £lm. The construction cost

anticipated for two berths is of the order of £12 m. A single berth would

cost about £7 m. CDC have offered us a loan of £2 m., although there is the question of a reduction if we only get one berth. (The reduction might not be more than about £1⁄21⁄2 m.)

We would intend putting through the berth something of the order of 1600 containers per week, (i.e. the aggregate of inward and outward containers).

We understand that Sea-Land are eager to talk to one or two other

operators about putting containers through their berth. Even with their

extensive trailer park system they should have space for this.

In all the above we are not implying that HKG are in any sense unsympathetic

to MTL.; merely that, understandable as the policy of spreading the berth

leases may be, it causes great embarrassment to us and does not seem to give

an advantage to HKG other than the short term gain of a higher price for the

lease. However there has come to our notice the possible availability of the

25 acre area at right angles to No. 1 berth, originally reserved for a desalin-

isation plant, but we understand no longer so reserved.

This "No. 5 berth" area (it has not been officially designated as a berth)

is entirely acceptable to MTL and to OCL/ACT. We emphatically do not want to

bail Oyama out on throughput, to the detriment of people like Kowloon Wharf,

or saddle ourselves with extra expense, inadequate capacity or lack of control

of our terminal operation. It is our intention not to talk to KCW other than

about technical construction aspects of the berths.

ADDENDUM:

1)

We were advised by our Tokyo agents that KCW press conference on 21st

August revealed the following:

Reclamation work to be undertaken by MSK for HKD20-25 million. 2. Construction work to be undertaken by MHI for HKD 23 million

1:

3.

(minimum).

Share allocation in Company not yet finalised since HK do not require this to be finalised at this stage. Deposit of IIKD.2.5

million has been procured by Oyama.