FLASH
CYPHER/CAT A
FM HONG KONG Ø31100Z
GRPS 830
SECRET
SECRET
HKK 21/4
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339 340 k
TO FLASH F.C.O. TELEGRAM NUMBER 1397 OF 3RD DECEMBER, 1973.
PERSONAL FRO SECRETARY OF STATE FOR TRADE AND INDUSTRY FROM
GOVERNOR.
MASS TRANSIT RAILWAY.
Action is
PA
being Saken
#4-11
THE STEERING GROUP IS NOW EVALUATING THE ANGLO-ITALIAN GROUP'S COUNTER-BID WITH A VIEW TO MY CONSULTING EXECUTIVE COUNCIL ON 11TH DECEMBER (WHEN THE JAPANESE CONSORTIUM'S PRE-EMPTIVE BID BECOMES TIME EXPIRED). THE ANGLO-FRENCH-GERMAN CONSORTIUM HAS ALSO JUST PUT IN A COUNTER-BID BUT, AT FIRST GLANCE, IT IS NOT SUFFICIENTLY SPECIFIC TO ENABLE IT TO BE EVALUATED.
2. WHILE THE ANGLO-ITALIAN COUNTER-BID IS A BRAVE EFFORT AND A VAST IMPROVEMENT ON THAT CONTAINED IN THE LETTER SIGNED BY CLAGUE ON 15TH NOVEMBER, I THINK I SHOULD WARN YOU THAT, AS IT STANDS, IT IS UNLIKELY TO DISSUADE EXECUTIVE COUNCIL FROM ADVISING ME TO AUTHORISE FORMAL NEGOTIATIONS ONLY WITH THE JAPANESE. SOME WAY OF IMPROVING THE BRITISH BID MUST THEREFORE BE FOUND BEFORE THIS FRIDAY (LAST THREE WORDS UNDER-INED) WHEN OUR PAPER FOR EXECUTIVE COUNCIL MUST ISSUE. I AM AFRAID THIS DEADLINE CANNOT BE STRETCHED.
3.
BRIEFLY, THE JAPANESE HAVE OFFERED A LUMP SUM CONTRACT PRICE OF YEN 255,600 MILLION (EQUIVALENT TO HK DOLLARS 4,998 MILLION AT 1ST OCTOBER OR ABOUT HK DOLLARS 4,700 MILLION AT TODAY'S RATE OF EXCHANGE), THIS PRICE IS ALL-INCLUSIVE FOR ESCALATION, UNFORESEEN CIRCUMSTANCES, ETC. WITH ONLY THE USUAL FORCE MAJEURE FACTORS EXCLUDED. ONLY AS REGARDS THE REQUEST FOR A HONG KONG GOVERNMENT GUARANTEE CAN THE JAPANESE BID BE FAULTED (AND WE HAVE NO REASON TO SUPPOSE THAT THE JAPANESE CONSORTIUM WILL NOT MEET THEIR TECHNICAL, FINANCIAL AND CONTRACTUAL OBLIGATIONS).
:
SECRET
/4. BY CONTRAST
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