TNAG-0425-FCO40-471-Construction-of-an-underground-railway-system-in-Hong-Kong-1973 — Page 46

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(8)

should follow that increases in Hong Kong costs may be paid

without jeopardizing the self-liquidating nature of the MTS,

as cost of living increases would from time to time both

justify and require fare adjustments,

Alternative Three

This would be a variation of Alternative One. Under the

protection of the bid ceiling price of HK$

at the time when it becomes possible to stipulate the contract

price, we would offer the Steering Group the option of adopting

a normal unit price type contract (based on measurement of

actual quantities) for the Civil works,

Everything else would

remain equal.

The difference would be mainly that the contract price need no

longer cover physical contingencies and quantity overruns

relating to civil works, and could therefore be as low as

HK$

By that time soil information and design work would be complete

and the Steering Group, assisted by its consultants, may well

find it more attractive on the basis of facts to cover those

risks directly rather than through the Contractor. As all

this implies that the Contractor would then be willing to

relinquish the prospect of a greater profit, we would not wish

the credibility of our proposal to be undermined.

It rests on