mummies
File No: 21/1
RESTRICTED
Note for P41
Mega Trangit Scheme
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Discussion between Secretary of State (Trode and Industry) and the Governor on 31 March 1973
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NOTHING TO BE WRITTEN IN THIS MARGIN
Wt. 43560/43 4/63
Ed. (53)
Lunderground railway
During his general moeting with the Govenor and Hong Kong officiels on the afternoon of 31 March, (a coeral record of which is on the file of Secretary of State's visit 3/1' (B)) there was a brief discussion of the Mesa Trenait Scheme,
The
It arose out of a roference to the Japanese practice of undercutting on major contracta. FINANCIAL SECRETARY goid that it was illustrative of the Japanese aspronch that when he had discusa- ion with them in November the Japanese consortium had said that they world consult with the Jaronese Prime Minister to see whether the Jananese Government really wonted Japan to go all out for the scheme. If this was the game then everthing nossible would be done to make it possible to facilitete. This was demonstrative of thair co-ordinated single minded neproach and their readiness to cut their bids very shermly. the other hand they were "a clumsy bunch" for a buyer to do business with and ther certainly Jaboured under some difficulties in the Masa Transit Scheme negotiation because of this clumsiness,
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On
NR WALKER anid that nevertheless he engaged that if they were really determined to rn to ret the Mass Tranait Scheme th ou would be prepared to undereut ruthlessly. Their objzctive would he to ret a "track recor?" for building underground nchemes so as to give them on eden in the arcing market for undercround railvąja in this mrt of the world. Their prices for future contracts might steadily edre' unonce they had established a monopoly but once they had established it it monla be difficult to unseat them.
The Finanotel Secretary said that he thought that thi a same motive should alar influence the other competine consortia all of whom must be looking to the possibility of getting the many other L contrecta in prospect. MP WALKER said that there was something in this armiment and the British Government for their pant were doing all that they possibly could to assist the British maup. With this nasistance the British grouna price would certainly be more than competitive. But neither Britain nor eny of the other bidding countries had the sort of arster which the Japanese had that would allow them to knock es much as 30% off the price and take a loss as a way of winning sub- sequent contracts, The foot was that the Japanese did not operate on the normal risk factor.
During the discussion Mr Haddon-Cave referred to the Angle Frenco German consortium.
MR WALKER commented that he did not repard it es
/very Anglo.
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