TNAG-0422-FCO40-468-Construction-of-an-underground-railway-system-in-Hong-Kong-1973 — Page 132

DECISION IN PRINCIPLE TAKEN LAST JUNE, THAT IS TO SAY,

THE DECISION IN PRINCIPLE TO PROCEED WITH THE CONSTRUCTION

OF THE FULL MASS TRANSIT RAILWAY - SHOULD NOW BE PUBLICLY

·

CONFIRMED. AT THE SAME TIME, THE GOVERNMENT HAS DECIDED TO

PROCEED IMMEDIATELY WITH CONSTRUCTING THE FIRST FOUR OF THE NINE STAGES OF THE FULL SYSTEM, TO THIS END PREPARATORY ENGINEERING DESIGN WORK, SOIL INVESTIGATIONS, AND SO ON ARE ALREADY IN HAND.

IN RESPONSE TO A GENERAL INVITATION ISSUED BY THE STEERING GROUP IN JULY LAST YEAR, NO FEWER THAN 21 COMPANIES AND CONSORTIA, COMPRISING FINANCIAL, ENGINEERING AND OTHER INTERESTS IN HONG KONG AND SEVEN MAJOR INDUSTRIAL COUNTRIES, SUBMITTED PRELIMINARY PROPOSALS FOR THE FINANCING, CONSTRUCTION, EQUIPMENT AND EVEN THE OPERATION OF THE MASS TRANSIT RAILWAY: NOT TO MENTION NEARLY 39 OTHERS WHICH HAVE EXPRESSED AN INTEREST OR OFFERED TO ASSIST, IN ONE WAY OR ANOTHER, IN THE PROJECT. THIS WIDESPREAD INTERNATIONAL INTEREST IN THE PROJECT MEANS THAT WE CAN

LOOK FORWARD TO TRUE INTERNATIONAL COMPETITION FOR THE CONTRACT

OR CONTRACTS FOR THE CONSTRUCTION AND EQUIPMENT OF THE

MASS TRANSIT RAILWAY.

SIR, I HAVE SAID 'CONTRACT OR CONTRACTS'' DELIBERATELY BECAUSE, BROADLY SPEAKING, THE MASS TRANSIT RAILWAY PROJECT COULD BE HANDLED IN EITHER ONE OF TWO WAYS. ON THE ONE HAND, THE WHOLE PROJECT - FINANCE, ENGINEERING, EQUIPMENT · COULD BE AWARDED AS ONE SINGLE CONTRACT, ON WHAT IS KNOWN AS A TURNKEY BASIS,

TO A SINGLE CONSORTIUM SELECTED EITHER BY TENDER OR BY

NEGOTIATION. ON THE OTHER HAND, THE PROJECT COULD BE SPLIT UP INTO A NUMBER OF CONTRACTS, EACH TO BE LET SEPARATELY BY INTERNATIONAL

COMPETITIVE TENDER, WITH THE FINANCING ARRANGEMENTS BEING HANDLED BY

A GROUP OF MERCHANT BANKERS SPECIALLY RETAINED FOR THE PURPOSE.

JUDGING FROM THE PROPOSALS RECEIVED BY THE STEERING GROUP, AND

FROM THE EXPLORATORY DISCUSSIONS SUBSEQUENTLY HELD BY THE GROUP

WITH CERTAIN PROPOSERS, IT IS CLEAR THAT BOTH OF THESE APPROACHES THAT IS TO SAY, A SINGLE- CONTRACT APPROACH AND A MULTI-CONTRACT

APPROACH - WOULD BE EQUALLY FEASIBLE. IT IS CLEAR ALSO THAT THE

ADVANTAGES AND DISADVANTAGES ARE FINELY BALANCED AS BETWEEN THESE APPROACHES, HAVING REGARD TO SUCH CONSIDERATIONS AS THE AVAIL- ADILITY AND TERMS OF EXPORT CREDIT FINANCE, THE LIKELY PRICE OF THE PROJECT, THE LIKELY STARTING DATE AND THE OVERALL PERIOD OF CONSTRUCTION: AND TO THE WHOLE RANGE OF PROBLEMS CONNECTED

WITH THE MANAGEMENT OF THE PROJECT DURING THE CONSTRUCTION PHASE.

-2-

/THE STEERING