TNAG-0422-FCO40-468-Construction-of-an-underground-railway-system-in-Hong-Kong-1973 — Page 46

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-jel

To follow. HH.. no 194

15/2.

SEE ANNEX 1 (1)

香港

督府

(Mr Wilfind has xer)

PERSONAL

My des Janson

Жит

Ihr Stunt

Will

aw

vage for

Ju please to be cuculated as welis my

Quis

54

let ure

ave a de aft och marques in the forener.

GOVERNMENT HOUSE,

HONG KONG

сбили

HKK 21/4

21/2

16th February 1973

Enter

MASS TRANSIT RAILWAY

The decision of the Executive Council

on Tuesday that the railway was a viable proposition and that we should go ahead and negotiate, brings us to the active phase of this exercise.

2.

You will have available the Executive Council paper (XCC (73)10) and the minutes, and also the text of Philip Haddon-Cave's statement in the Legislative Council on Wednesday (our tel. 178). You will see from this that while the decision is to enter into further discussions with four ¡consortia, including the Japanese and British, no

decision has been taken as to whether a consortium or multi-contract approach should be followed, far less as to which consortium is the forward runner. As things stand we still have not the data on which to take a decision on either of these issues.

3.

We can of course only find out what the outcome of a multi-contract approach would be by actually going to tender - from which there would be no withdrawal. We can therefore only test out this type of approach by committing ourselves to it though we have a pretty clear idea about what its merits and demerits would be. But the actual prices we could obtain would come from the results of the calls to tender only.

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4.

On the other hand it is possible that during further negotiation with the consortia we could get a better idea from each group as to what their price would be, and adding this to the various other facilities they offer, such as ECGD type credit, merchant banking facilities and project management,

Sir Duncan Watson, KCMG

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