SECRET AND PERSONAL
Prime Minister goes to Hong Kong, he is assured by the
they can
get DTI that they have done everything possible to win the
contract, but that the Anglo-Italian bid has not even
been validated for negotiation by the Hong Kong
Government, in competition with Japanese proposals
which a large body of opinion here still considers
to be cynical and unrealistic; then the chances of
Ministerial support for the whole range of Hong Kong's
needs must be diminished.
10.
I do not know what has gone wrong during the latest
in Hong Kong. negotiations with the consortium. According to Aston,
at the end of these negotiations Haddon-Cave said that
the Steering Group regarded the new Anglo-Italian
proposals as an acceptable counter-bid. All concerned
were said to be confident that the counter-bid would be
Exco put forward to EXCO-with the Steering Group's
recommendation that it be accepted as a basis for
further negotiations in competition with the Japanese.
Your subsequent telegram no. 1397 therefore came as
a shock. We of course take the point about the higher
ceiling price. But the point is that this is indeed
a ceiling and that the consortium expect when the
surveys are complete to be able to put in a figure
present
well below the Japanese bid. Again we accept that you
cannot risk losing the Japanese pre-emptive offer; but
it seems from paragraph 7 of your message to Mr Walker
Exco
yout that this would only be the case if EXO followed the
second alternative of saying that all bids were still
open. If this is so, you would appear to lose nothing
your first possibility of
by validating the Anglo-Italian bid as it stands.
/11.
SECRET AND PERSONAL
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