TNAG-0422-FCO40-468-Construction-of-an-underground-railway-system-in-Hong-Kong-1973 — Page 118

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12. TERMS. WE CAN EXPECT TO BE PRESSED FOR BOTH A REDUCTION

OF INTEREST RATE AND TO FIRM UP CAPITAL ISATION OF INTEREST.

AS PREVIOUSLY REPORTED WE HAVE HAD A NUMBER OF SEPARATE

INDICATIONS THAT LATTER IS EXPECTED ALMOST WITHOUT FURTHER

ASK ING. WE KNOW FROM OUR CONTACTS AND YOURS THAT JAPANESE

ALREADY HAVE OFFERED IT, BUT HAVE YET BEEN UNABLE TO GET

ANY FURTHER INDICATION HERE OF THE PRECISE TERMS.

11.

WE HAVE NOW HEARD, FROM TWO

PACKAGE OR FRAGMENTATION.

SEPARATE AND NORMALLY RELIABLE SOURCES THAT QUOTE GOVERNMENT'S

UNQUOTE PREFERENCE IS FOR A PACKAGE DEAL AND THAT THEY WILL

ONLY GO FOR FRAGMENTATION IF THE PACKAGE PROPOSALS PROVED TOTALLY

UNACCEPTABLE AND IN PARTICULAR DID NOT MEET THE REQUIREMENTS

AS TO PRICE. THIS IS A SLIGHT IMPROVEMENT OVER THE PREVIOUS

UNCERTAINTY. ACCORDING TO THESE SOURCES THE SHORT LIST NOW

CONSISTS OF THE FOLLOWING FOUR PROPOSERS ONLY: U.K., ITALY, FRANCO/GERMAN AND JAPANESE. ALL OF THESE ARE PACKAGE PROPOSALS. THERE APPEARS TO BE NO PRESENT INTENTION AT THIS STAGE TO

NEGOTIATE FURTHER WITH THE FINANCIAL CONSORTIA. BUT THE

POSSIBILITY OF RETURNING TO THEM IS CERTAINLY NOT RULED OUT -

SEE PARAGRAPHS 3 AND 4 OF MY ESBOT 47.

12. COMPETITION. - THE KADOORIE GROUP PROJECT MANAGEMENT

PROPOSAL SEEMS NOW TO BE ELIMINATED SINCE IT DEPENDED ON

HAVING OPERATING FRANCHISE (SEE PARAGRAPH 5 OF ESBOT 47).

/WE HAVE