TNAG-0423-FCO40-469-Construction-of-an-underground-railway-system-in-Hong-Kong-1973 — Page 62

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Yes

Yes.

Mw.

the deed

Mr.

consortium.

This has caused Mr Cotterill, in his minute, to

record that it is touch and go whether the British group will

be selected for the final round. The other consortia apparently

propose to set up special companies in Hong Kong to negotiate

a true package deal. Our industry's proposition is in effect

two separate contracts. This could mean, for example, that if

the civil engineering side failed to get the tunnels dug in

time, the mechanical group could ask the Hong Kong Government

to compensate them for the resultant delays to their half of

the work. The Hong Kong negotiators argue understandably that

this would have the disadvantages of a fragmented contract

without the advantages of open tender.

4. The other problem, of which I am assured the Hong Kong

Government is unaware, is that the civil side of the consortium

now want to hive off 30% of their work to European contractors.

I have spoken to Mr Glaves-Smith of DTI. I said that from the

FCO's point of view the decision whether to sub-contract some

of the work to others was primarily a technical one. But if

it was decided in principle to do so it would be much better to

get the contract first and talk about sub-contracting afterwards.

I was also sure that if the Hong Kong Government adopted the

consortium approach they would insist on dealing with a single

entity.

5.

Mr Glaves-Smith said that his Secretary of State was calling

an urgent meeting to discuss ways of ensuring that the members

of the UK consortium got together in a single entity which

/would