TNAG-0423-FCO40-469-Construction-of-an-underground-railway-system-in-Hong-Kong-1973 — Page 192

1

HAVEDIATE

CYPHER/CAT A

GFS 825

FM MANILA #23236Z

CONFIDENTIAL

TESTARUU

FILL, GOLY

AKIOD

No.1

CONFIDENTIAL.

Lakk ? //4

TO IMMEDIATE ECGD TELNO EXCED 25 OF 2 APRIL.

1973

PERSONAL FOR FELL ECGD FROM MASON: MASS TRANSIT.

Chad o

CREZ

MersCH welch Sis Walsu

1. THE FOLLOWING IMPRESSIONS ARE TAKEN FROM A MEETING BETWEEN

THE SECRETARY OF STATE AND THE GOVERNOR AT WHICH OTHERS, INCLUDING

HADDON CAVE, WERE PRESENT: AND A TALK BETWEEN JONES, ASTON AND MYSELF. I DID NOT, AT THE GOVERNOR'S SUGGESTION SEE HADDON-CAVE

ALONE MYSELF.

2. MY OVERALL IMPRESSION IS THAT THE BRITISH CONSORTIUM'S CHANGES

HAVE NOT IMPROVED SINCE THEY WERE HERE.

FIRST, THE TIME TABLE HAS SLIPPED, AND IT SEEMS IMPROBABLE THAT HADDON-CAVE WILL POSTPONE HIS LEAVE. THIS WILL LEAVE THE NEXT

ROUND TO BE CONDUCTED BY JONES, WHO IS UNLIKELY TO SEEK A DECISION BEFORE HADDON-CAVE'S RETURN IN MID OR LATE JUNE.

SECOND, THE HONG KONG SIDE HAVE BEEN IMPRESSED BY THE FRENCH, GERMAN, GKN COMBINATION, IN WHICH THEY PRESUMABLY SEE POLITICAL ADVANTAGE. (WE EMPHASIZED THAT GKN HAD RECEIVED NO ECGD OFFER,

AND COULD NOT EXPECT SIMILAR TERMS TO THOSE AVAILABLE TO THE CONSORTIUM).

THIRD, THE JAPANESE SEEM TO BE THOUGHT HERE TO BE COMING THROUGH STRONGLY, BECAUSE OF THEIR PRELIMINARY MENTION OF A US DOLLAR 400 MILLION FIXED PRICE, AND OF THE BELIEF HERE THAT THEY MAY HAVE HOISTED IN THE GUARANTEE PROBLEM. I GATHER THAT THEY HAVE

UNDERTAKEN TO RETURN IN EARLY MAY WITH A FIGURE FOR E AND M,

AND PERHAPS WITH A FIRMER OVERALL FIXED PRICE. I TOLD JONES THAT

IF THE JAPANESE PROVIDED THIS THEY WOULD BE BUYING THE CONTRACT,

ALL IS THOUGHT TO HINGE ON THE ATTITUDE OF THE JAPANESE GOVERNMENT, AS IT IS RECOGNISED THAT IF THEY WANT TO THE JAPANESE CAN AND

WILL BUY THE CONTRACT. (THE SECRETARY OF STATE SKILLFULLY USED

THIS AT HIS MEETING AS A REASON FOR QUR NOT MAKING A PRE-EMPTIVE

BID). HENRY KESWICK OF JARDINES TOLD CAINES THAT HE THOUGHT THE JAPANESE GOVERNMENT WERE NOW SUPPORTING, AND EXPRESSED BOTH

CONFIDENCE IN JAPANESE SUCCESS AND THE OLD JARDINE GRUDGE AGAINST GEC.

FOURTH, ALL THE CONSORTIA REMAIN IN THE RACE, AGAINST WHAT HADDON-CAVE HAD HOPED.

13.

CONFIDENTIAL