GRS 270
IMMEDIATE
CYPHER/CAT A
F/ FCO 1618552
CONFIDENTIAL
CONFIDENTIAL
(HK)
286
285
HKK21/4
NOVEMBER 1973
TO IMMEDIATE GOVERNOR HONG KONG TELNO 1175 OF 16
PERSONAL FOR GOVERNOR FROM SIR DUNCAN WATSON
1. YOUR TELS 1315 OF 1316 HAVE CROSSED WITH INSTRUCTIONS
TO ASTON TO MAKE CERTAIN POINTS AT YOUR END ON CLAGUE'S
LETTER, AND I ALSO EXPECT THAT YOU WILL BE RECEIVING BY TOMORROW A PERSONAL MESSAGE FROM MR PETER WALKER (WHICH HAS BEEN DELAYED AND WILL NOW TAKE ACCOUNT OF
YOUR INITIAL REACTIONS AS REPORTED TO DTI BY ASTON EARLIER
TO-DAY). I AM SURE YOU WILL SEE THAT ALL THIS IS HOISTED IN BEFORE MEETING OF STEERING GROUP ON MONDAY. MEANTIME, WE ARE IMMEDIATELY PASSING ON YOUR VIEWS TO THOSE CONCERNED.
2. WE ARE NOT SURPRISED AT YOUR REACTION, BUT THE FACT
OF THE MATTER IS THAT THE INCLUSION OF THE ITALIANS IN
THE NEW CONSORTIUM HAS NOT LED TO RESOLUTION IN COMMERCIAL
JUDGMENT AT THIS END OF THE DIFFICULTIES POSED BY THE
CEILING PRICE REQUIREMENT. THE CONSORTIUM WANT MORE TECHNICAL INFORMATION BEFORE COMMITTING THEMSELVES, BUT WE ARE ASSURED THEY ARE THINKING IN TERMS OF A PRICE THAT WILL BE FULLY COMPETITIVE WITH THE JAPANESE, EVEN WITH ESCALATION ARRANGEMENTS. WE HAD ALREADY MADE CLEAR TO ALL CONCERNED THE PROBLEMS TO WHICH THIS UNCERTAINTY IN THEIR BID WOULD GIVE RISE, DUT AGAINST THIS THERE IS STRONG FEELING HERE THAT THE DEGREE OF FLEXIBILITY INVOLVED IN VALIDATING THE JAPANESE BID JUSTIFIES A CLAIM TO SIMILAR INDULGENCE TOWARDS THE CONSORTIUM'S PROPOSALS. WE ARE GLAD TO SEE FROM YOUR TELEGRAM THAT NO DOORS WILL BE CLOSED ON MONDAY,
DOUGLAS-HOME
FILES
HKIOD
TRED
PS/MR ROYLE
SIRD WATSON
MR YOU DE
MR TAYLOR MR MARSHALL.
CONFIDENTIAL
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