GR 380
IMMEDIATE
DEDI p
DESKBY 198188Z
CYPHER/CAT A
FM FCO 181446Z
DEDIP
HKK 21/4
CONFIDENTIAL
280
PA
290
2
3-хп
CONFIDENTIAL.
TO IMMEDIATE GOVERNOR HONG KONG TEL NO PERSONAL 1179 OF 18 NOVEMBER, 73 FOLLOWING MESSAGE PERSONAL FOR GOVERNOR FROM SECRETARY OF STATE FOR TRADE AND INDUSTRY.
MASS TRANSIT.
BEGINS
YOU WILL KNOW THAT AN ANGLO-ITALIAN GROUP HAS BEEN FORMED TO
COMPETE FOR THE CONTRACT TO BUILD A MASS TRANSIT SYSTEM IN HONG
KONG, AND THAT THE GROUP HAVE PUT FORWARD IN A LETTER TO THE HONG
KONG STEERING GROUP FOR THE MASS TRANSIT SCHEME A PROPOSAL WHICH,
WHEN DEVELOPED, COULD THEY BELIEVE MATCH AND BEAT THAT FROM THE
JAPANESE, I HAVE ALSO HEARD THAT YOUR INITIAL REACTION IS THAT THE
GROUP MUST DO MORE IF THEY ARE TO STAY IN THE RACE. I HOPE YOU
WILL PAUSE A MOMENT BEFORE CARRYING THIS TO A POINT AT WHICH
ALL COMPETITION TO THE JAPANESE BID IS ELIMINATED. IN THIS CONTEXT
IT MAY HELP YOU TO KNOW THAT THIS NEW GROUP HAVE THE SAME FIRM
SUPPORT FROM THE UK GOVERNMENT THAT WAS ENJOYED BY THE WHOLLY UK
GROUP WHICH PRECEDED IT. ASTON HAS INSTRUCTIONS TO MAKE THIS CLEAR
AT HIS LEVEL AND TO PUT FORWORD CERTAIN POINTS NOT COVERED IN ANY
DETAIL IN THIS MESSAGE WHICH, ON STRAIGHT TRADE PROMOTION GROUNDS,
COULD ARGUE FOR KEEPING THE ANGLO-ITALIAN CONSORTIUM IN THE RACE.
BRIEFLY, THE UK GOVERNMENT BELIEVE THAT THE ANGLO-ITALIAN GROUP WILL BE STRONG TECHNICALLY, THAT THEY WILL BE ABLE TO PUT IN A
HIGHLY COMPETITIVE PRICE AND THAT THE FLEXIBILITY OVER THE
STEERING GROUP'S ''REQUIREMENTS' SHOWN TOWARDS THE JAPANESE
PRE-EMPTIVE BID, EG ON THE MATTER OF A GUARANTEE, SHOULD BE MATCHED
Y A SIMILAR FLEXIBILITY TOWARDS THE ANGLO-ITALIAN CONSORTIUM.
COULD I ASK YOU ALSO TO TAKE CERTAIN OTHER POINTS INTO CONSIDERATION.
FIRST I DO NOT DOUBT THAT YOU WILL BE ASKING YOURSELVES WHETHER
THE BID FROM THE JAPANESE EXPRESSED 14 YEN MIGHT NOT IMPLY AN ELEMENT
ESCALATION DESPITE ITS SEEMING FIXITY? IF PAST PERFORMANCE
CONFIDENTIAL
/IS ANY
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