TNAG-0422-FCO40-468-Construction-of-an-underground-railway-system-in-Hong-Kong-1973 — Page 56

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Sir D. Mation 8/3

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MR ROYLE

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8/3

Abistari

CONFIDENTIAL

HONG KONG MASS TRANSIT SYSTEM

1.

(i)

I Krik Hack lovi

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in right

Please keep me

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intramed,

Suring the next few weeks, as development, take place.

A.R.

On the points raised in Mr Stuart's submission below:-

I agree generally with the argumentation to the

effect that we should not respond to the Japanese approach at this stage, but wait to see how the

British consortium fare in their next round

with the Hong Kong Government. Meantime, I suggest it might be as well to give some thought to an analysis of the pros and cons of a joint consortium deal either with the Japanese or with the Europeans, taking into account the political factors across

the international board as well as the financial and

economic.

(ii) While an "independent expert" (paragraph 9 of

Mr Stuart's minute) might bring some useful influence to bear on the somewhat simplistic

attitude which the Hong Kong Government seems to be adopting at present, like Mr Wilford I am not at all clear exactly how he can be introduced into the scenario. I suggest Mr Stuart might pursue this question further with the DTI.

(iii) I agree also that for the time being we should hold

in reserve the ammunition of a Ministerial message

to the Governor. I cannot really believe that,

after the further round of talks with the various

consortia, the Hong Kong Government will find themselves in a position to make a realistic and firm comparison between the advantages of the

consortium and the multi-contract approach. time to weigh in effectively will be before the Executive Council takes stock of all this again in April. As Mr Stuart says we shall probably

7 March 1973

have to move fast when we have heard how the

talks with the British consortium have gone.

Woman Walim

(Duncan Watson)

CONFIDENTIAL

The