TNAG-0422-FCO40-468-Construction-of-an-underground-railway-system-in-Hong-Kong-1973 — Page 129

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FM HONGKONG 1408452

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TO PRIORITY ESD TEL ESBOT 47 OF 14 FEB

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COTTERILL CIGGD) AND FCD FOR STUART CUKIO0) AND FINLAYSON (EPD)

473

FINANCIAL SECRETARY INFORMED LEGCO THIS (14TH) AFTERNOON THAT GOVERNMENT HAVE CONFIRMED THAT DECISION IN PRINCIPLE OF JUNE 1972 TO CONSTRICT THE FULL HTS AND HAVE DECIDED TO PROCEED IMMEDIATELY WITH CONSTRUCTION OF FIRST 4 STATES BY CARRYING ON PREPARATORY DESIGN WORK AND SOIL TESTS ALREADY PUT IN HAND,

2. RESPONSE TO INVITATION IN JUME HAU ESTABLISHED THAT FULL SCHEME WOULD BE FINANCIALLY VIABLE AND THAT THERE COULD BE 'TRUE INTER- NATIONAL COMPETITION FOR THE CONTRACT OR CONTRACTS

3. HE STRESSED THE POSSIBILITY OF HAVING A NUMBER OF CONTRACTS AND MADE THE POINT THAT THE ADVANTAGES AND DISADVANTAGES BETWEEN **TURNKEY' AND **MULTICONTRACTS'. ARE **FINELY BALANCED**, MULTI CONTRACT HAD **MANY ATTRACTIONS'' INCLUDING, THAT IT WOULD FACILITATS MORE COMPETITION AND MIGHT HAVE A LOWER PRICE. BUT THIS 19 A VERY BIG PROJECT AND SOME CERTAINTY OVER COORDINATION AND OVER DEGREE AND DURATION OF FINANCE IN EXPORT CREDIT OBTAINABLE BY SINGLE CONTRACT ARRANGEMENT COULD OFFSET DISADVANTAGES OF HIGHER PRICE.

4. BECAUSE SUFFICIENT INFORMATION NOT YET AVAILABLE FROM ANY OF THE SINGLE CONTRACT CONSORTIA ON PRICE AND FINANCIAL TEANG GOVERNMENT INTEND TO HOLD FURTHER DISCUSSIONS WITH '*CERTAIN** CONSORTIA WITH A STREET TIMETAGLE. HE RE-EMPHASISED THAT THIS DOES NOT INDICATE THAT SINGLE CONTRACT APPROACH HAS BEEN DECIDED ON. CCOMMENT. THIS WAY HAVE OREN PROMPTED PARTLY BY CONCErst OVER POSSIBLE REACTION OF HIGHLY VOLATILE STOCK MARKET WHICH IS HOVERING OVER EVERY HINT OF WHO NIGHT GET CONTRACT. BUT IT IS AT LEAST AS MUCH A WARNING TO CONSORTIA OF TOUGH DARGAINING AREAU),

5. GOVERNMENT HAVE DECIDED THAT OPERATION OF MTS ALTHOUGH ON COMMERCIAL LINES MUST DE SUBACT TO THEATER DEGREE OF GOVERNMENT CONTROL THAN IN PUBLIC TRANSPORT HITHERTO. IT WILL THEREFORE BE RUN BY A PUBLIC CORPORATION CREATED UNDER PUBLIC ORDINANCE AND INITIALLY AT LEAST OWNED BY GOVERNMENT. GOVERNMENT WILL TAKE EQUITY HOLDING IN FORM OF CASH, LAND AND CERTAIN EXPENDITURE HITHERTO CHARGED TO REVENUS. PUBBLIC WILL ALSO 66 ASKED TO SUBSCRIBE,

STATEMENT FINISHED WITH ASSURANCE THAT CONSTRUCTION WOULD BE ORGANISED TO COME MINIMUM POSSIBLE INCONVENIENCE TO PUBLIC.

7. FULL TEXT FOLLOWS BY BAG.

ASTON

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