TNAG-0425-FCO40-471-Construction-of-an-underground-railway-system-in-Hong-Kong-1973 — Page 93

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290

CONFIDENTIAL

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11. Crouton

་ ་་་ཏད་པའི་མཚན་;

SECRETARY OF STATE FOR TRADE AND

FCS/73/86

21/0

NDUSTRY

HKlad to enter

Distribution

PS/POS PS/ MR Royle

(299

Sir D. Watson Sir J. Killick / Me Wiggen 22-т машина/не youde

HR Tebbit / MR SEOH

Mr. Howard - Simeth

(cabinet

FED

WED Finance

P RECIC:

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Hong Kong Mass Transit System

bij HKK 21/~

In my minute to the Minister for Trade and

Consumer Affairs of 9 November, I suggested that the, Hong

Kong Steering Group might not agree to validate the Anglo-

lalian bid in its present form. I also suggested that to

support our bid we might point out some of the implications

of the Japanese proposals and contrast these with the

attractions of our own. You made these points in your

message to the Governor of 18 November, with which I fully

agree.

2.

But, as we anticipated, the Governor has now replied

that, despite our arguments, the bid in its present form is

not adequate and is not likely to be validated for serious

negotiation alongside the Japanese pre-emptive bid. I believe

we must accept this as a fact. From Hong Kong's point of view

our bid is at present defective both in substance and in

presentation.

On the substance the absence of a price and the

insistence on an escalation clause are important, while the

terms in which the offer is drafted appear vague and

unsatisfactory in Hong Kong.

3.

I am uncertain how far the Anglo-Italian consortium,

and particularly GEC and Costains, are genuinely unable to

CONFIDENTIAL

/improve

office)