TNAG-0424-FCO40-470-Construction-of-an-underground-railway-system-in-Hong-Kong-1973 — Page 21

GPS 287

CONFIDENTIAL

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PRIORITY

CYPHER/CAT-A-

FM FCO 121600Z

DEDIP

CONFIDENTIAL

PEC

(242)

(HK)

top copy

TO PRIORITY GOVERNOR HONG KONG TELNO 1025 OF 12/13/73

PERSONAL FOR GOVERNOR FROM MR ROYLE,

MASS TRANSIT SYSTEM.

2

Be Goodfellow then PLA

1. THE NEGOTIATIONS FOR SETTING UP AN ANGLO-ITALIAN CONSORTIUM ARE NOW GOING AHEAD. THE ITALIANS HAVE READILY AGREED THAT GEC SHOULD TAKE THE LEAD ON THE MECHANICAL AND ELECTRICAL SIDE, BUT BECAUSE THE FINANCIAL ARRANGEMENTS ARE BETTER FOR M AND F THAN FOR THE CIVIL SIDE THEY HAVE STIPULATED THAT BRITISH CONTRACTORS SHOULD TAKE A MINORITY SHARE (ABOUT 25%) OF THE CIVIL WORK AS WELL. THE REMAINING INTERESTED PARTNERS ON THE CIVIL SIDE OF THE BRITISH CONSORTIUM ARE WILLING IN PRINCIPLE TO TAKE PERHAPS A 12 1/2 SHARE, DESPITE THEIR DOUBTS ABOUT HONG KONG'S PRICING POLICY, AND THE EXPORT GROUP FOR THE CONSTRUCTIONAL INDUSTRY ARE URGENTLY CONSIDERING HOW TO CLOSE THE

REMAINING GAP. THEY HAVE PROMISED TO LET DTI KNOW THE RESULTS BY

19 OCTOBER.

尖

2. IF YOU DECIDE THAT THE JAPANESE BID IS VIABLE THE ANGLO/ITALIAN GROUP MIGHT THEN, IN ACCORDANCE WITH HADDON-CAVE'S SUGGESTED TIME- TABLE, HAVE NO MORE THAN THREE WEEKS IN WHICH TO PUT IN A VALID COUNTER-BID. I HAVE NO IDEA IF THIS IS POSSIBLE, SINCE THE GROUP IS NOT YET FORMED, BUT IT IS OBVIOUSLY DESPERATELY SHORT NOTICE FOR A PROJECT OF THIS SIZE. I HOPE THAT THE ARBITRARY REQUIREMENTS OF THE

TIMETABLE WILL NOT BE THE DECIDING FACTOR IN CONSIDERING THE VIABILITY OF A BID FROM AN ANGLO/ITALIAN GROUP WHICH YOU YOURSELF HAVE ENCOURAGED, AS AGAINST AN ALL- JAPANESE BID ABOUT WHICH WE BOTH HAVE STRONG POLITICAL RESERVATIONS,

13. MEANWHILE

CONFIDENTIAL"