THE STEERING GROUP GAVE VERY CAREFUL CONSIDERATION TO
THE QUESTION WHETHER TO RECOMMEND A SINGLE-CONTRACT APPROACH
OR A MULTI-CONTRACT APPROACH, THE MULTI-CONTRACT APPROACH
HAS MANY ATTRACTIONS: IN PARTICULAR, THIS APPROACH IS LIKELY TO
GENERATE A GREATER AMOUNT OF COMPETITION WHICH, IN TURN, MIGHT LEAD
TO A LOWER OVERALL CONTRACT PRICE. ON THE OTHER
HAND, THE MASS TRANSIT RAILWAY IS THE FIRST PROJECT OF
ITS KIND IN HONG KONG, IN TERMS BOTH OF THE MAGNITUDE
OF THE CAPITAL REQUIRED AND OF THE LENGTH OF THE CONSTRUCTION
PERIOD. A DEGREE OF CERTAINTY OVER THE AMOUNT AND TERMS
OF EXPORT CREDIT FINANCE AVAILABLE, WHICH IS ONE OF THE MAIN ADVANTAGES OF THE SINGLE-CONTRACT APPROACH, COULD BE OF SOME IMPORTANCE AND, WITHIN LIMITS, COULD WELL OFFSET
THE DISADVANTAGE OF A HIGHER CONTRACT PRICE. A FINAL DECISION
ON WHICH OF THESE TWO APPROACHES TO ADOPT CANNOT NOW BE
MADE WITH CONFIDENCE BECAUSE THE INFORMATION AVAILABLE ON
THE PRICES AND CREDIT TERMS LIKELY TO BE AVAILABLE FROM
THE VARIOUS CONSORTIA WHICH HAVE PUT UP SINGLE-CONTRACT
PROPOSALS IS AS YET INSUFFICIENT TO ENABLE THIS TO BE DONE.
IN THE CIRCUMSTANCES, THE GOVERNMENT HAS DECIDED
THAT FURTHER CONSULTATIONS SHOULD BE HELD WITH SEVERAL OF
THE CONSORTIA WITH A VIEW TO OBTAINING, TO THE MAXIMUM EXTENT POSSIBLE AND WITHIN A STRICT TIME SCHEDULE,, THE
INFORMATION NECESSARY FOR A DECISION TO BE REACHED. I MUST EMPHASISE,
FOR THE AVOIDANCE OF DOUBT, THAT THE FACT THAT THE
GROUP IS TO HOLD FURTHER CONSULTATIONS WITH CERTAIN
CONSORTIA DOES NOT INDICATES A PREFERENCE FOR THE SINGLE-
CONTRACT APPROACH. IN OTHER WORDS, I MUST EMPHASISE THAT A
DECISION ON THE APPROACH TO BE ADOPTED HAS YET TO BE MADE.
BUT, WHATEVER ARRANGEMENTS ARE MADE TO FINANCE, CONSTRUCT AND EQUIP THE MASS TRANSIT RAILWAY, THERE WILL HAVE TO BE
A BODY TO BE RESPONSIBLE FOR IMPLEMENTING THE PROJECT THOUGH
THE EXTENT TO WHICH THE RESPONSIBLE BRODY WOULD HAVE TO
BUILD UP ITS OWN ENGINEERING DESIGN AND PROJECT MANAGEMENT
CAPABILITY FOR THESE TASKS WOULD DEPEND ON WHETHER
A SINGLE OR MULTI-CONTRACT APPROACH WAS ADOPTED. AN ENTITY
WILL ALSO BE REQUIRED TO OPERATE AND MAINTAIN THE SYSTEM AFTER
CONSTRUCTION. IN THIS RESPECT, THE SIZE AND NATURE OF THE PROJECT
-3-
/HAVE CREATED
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