TNAG-0426-FCO40-472-Construction-of-an-underground-railway-system-in-Hong-Kong-1973 — Page 130

Govt to beg

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BY PETER LOKE

The Hongkong Government will immediately begin negotiations with the huge Mitsubishi consortium, represented locally by Jardine, Matheson and Co Ltd, to conclude a contract for the construction of the multi-million dollar mass transit railway.

$5,000-million piece of news dropped by the Government at 8.30 last night put the Japanese group well clear of the field to clinch the biggest public project ever launched in the Colony.

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The decision was reached after yesterday's meeting of the Executive Council which was later described as having been one of the longest on record. It is clear the decision was taken only after the most exhaustive discussions.

While the mass media were yesterday informed of an "important announcement" to come later on in the evening, Managing Director of Jardine, Matheson, Mr David Newbigging. was being informed of the decision.

In a late night interview with the S.C.M. Post, Mr Newbigging said: "I am very pleased with the decision He added hopefully that the "letter of intent would be signed in the New Year."

admitted

Mr Newbigging that the announcement by the Government last night was only the first stage of a long series of negotiations to come before the final contract could be signed.

"But I am confident that our Japanese partners will be able to meet the requirements laid down by the Government,” he added.

On the assumption that the consortium would secure the contract, Mr Newbigging said it would then take "a maximum of five years to deliver the goods."

However, he expressed confidence that the consortium would be able to fulfil its commitments to the best of its ability.

Mr Newbigging said he had no doubt that the consortium could start construction work immediately, as it had already spent two full years mapping out the project. Construction

AN ARTIST'S STATION.

IMPRESSION

could start in April next year, as soon as the negotiations are completed.

He said a number of the other partners in the Mitsubishi consortium had also established

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presence in Hongkong because of their participation in other public and private projects here.

Mr Newbigging and his Special Projects Manager, Mr Roger Gunn, have been the "key negotiating personnel" for the Mitsubishi consortium during the two years since the Government expressed its first desire to build the mass transit railway.

Asked what had been the the success, Mr "key" to Newbigging said it was the ability of the Japanese partners to offer the terms well within the Government ceiling of $5,000 million to construct the four stages of the tube.

He also elaborated that the $5,000-million figure would be. the absolute "maximum" the consortium accepted regardless of the floating Yen.

The Chairman and Managing Director of Mitsubishi (HK) Ltd, Mr A. Ito, said he was delighted to hear that the Mitsubishi consortium had been selected to enter into final negotiations for a contract with the Hongkong Government,

“1 have always been confident that we have offered the best terms and we shall also be doing the very best for Hongkong," he added.

Sir Douglas Clague, the Chairman of Hutchison International which heads up the Anglo-Italian Consortium recently forged to battle with the Japanese for the contract, said last night he was "not a bit 'downhearted" by the news.

"It will be interesting to see: what develops," remarked Sir Douglas: Anybody who quotes a fixed price for project of this magnitude is being very brave indeed in the

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AD FUNGAMPLEZ

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"I note the paragraph in the official Government statement says that if the negotiations with the Japanese fall through, consideration will be given to negotiating with one or both of other consortia," Sir Douglas added.

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The full text of the Government statement on the project reads:

The Government announced that it has decided to enter into negotiations with the Japanese consortium, represented locally by Jardine, Matheson and Co Ltd, to see whether it is possible to conclude a contract for the construction and equipment of the first four stages of the mass transit railway.

This decision has been taken following upon ä series of discussions which have taken place between the Mass Transit Steering Group and the three consortia which had put forward single contract

proposals.

In announcing this decision, a Government spokesman stressed that the negotiations will take a number of months, but will begin immediately. Whether or not the negotiations can be brought to a successful conclusion will depend upon the Japanese consortium's ability and willingness to conform to the Government's detailed requirements for a contract.

The Government spokesma said that one of the most important requirements id down by the Government was that the contract price should be limited to $5,000 million. This was because it was considered that this maximum sum the railway could afford within a given fare structure and bearing in mind the long period over which the debt has to be repaid, resulting in a very heavy interest burden.

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"The Japanese consortium's proposal was the only one which was within

this limitation," he said.

Should it not be possible to conclude a contract with the Japanese consortium, the Government spokesman added, consideration would be given to

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