TNAG-0425-FCO40-471-Construction-of-an-underground-railway-system-in-Hong-Kong-1973 — Page 45

- Danuta Käo cum a

(7)

Civil works:

Labour

10

Materials

%

M & E:

Labour

%

Materials

.%

Annual increases beyond these levels in European escalation

(during negotiation a further distinction would have to be

agreed between Italian and British parameters and related

contract price percentages) are to be construed as events of

force majeure and paid in addition to the contract price.

Other events of force majeure also are to involve payment in

addition to the contract price.

% of the contract price, or HK$

represents the HK dollar part of the contract (Hong Kong labour

and materials payable in Hong Kong dollars). This portion of

the contract price contains no allowance for escalation and

the price bid for Alternative Two is conditional upon agreement

to escalate such portion of the contract price, without limit,"

with the variations of an index to be negotiated. The index

should be meaningful in respect of the cost of living, as

well as of the cost of this type of project construction, in

Hong Kong.

Our thinking in making this proposal is that the Government is

better able to evaluate, and to some extent control, the

oscillations of costs in Hong Kong. More importantly, inasmuch

as the logic of requesting a fixed ceiling price rests on the

need to preserve the adequacy of the planned fare system, it

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