HKK 21/2
MINISTER FOR TRADE AND CONSUMER AFFAIRS
FCS/73/82
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Mh Youde 1h Wilford Su I kilicio/M. Wiggin Mr. Wright / 'Mr Taylor
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As you
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Hong Kong Mass Transit System
Thank you for your letter of 30 October.
know the Hong Kong Government have not accepted the
Japanese demand for a guarantee. But they have
"validated" the Japanese bid, which is denominated in
yen, and also proposes a guarantee.
They have thus
undeniably relaxed the original conditions of their
competition.
2.
As you also know, we have been advised that it is
legally and constitutionally possible for the Hong Kong
Government to give a guarantee to a private contractor
without necessarily involving us as a guarantor of last
resort. We are therefore free to make what tactical use
we choose of Hong Kong's relaxation of its conditions in
favour of the Japanese bid.
3. My own view has been that we should use these
concessions positively, to promote our own bid when it is
ready. If we complain too strongly in advance that
Hong Kong have bent the rules, they might return under our
pressure to the full rigour of their original conditions.
CONFIDENTIAL
/The
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