TNAG-0508-FCO40-573-Construction-of-underground-railway-system-in-Hong-Kong-1974 — Page 111

Reference.........

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Mr Stuart, HKIOD

MASS TRANSIT HONG KONG

RECET IN REGISTRY 0.51 2- APR 1974

Akkal

2

me with

papers

1. In his minute of 11 March Mr Wilford recorded that a British businessman, Mr Denis Lennon, had told him that the Japanese had increased their price by more than 40% for a big project in India during the course of construction. You asked if we could find out what project in India this businessman could be referring to and if there were any further details available to us about this dramatic price increase.

2. Japan is singularly short of major projects in India. Our own guess is that he must be referring to one or other of the Japanese contracts for fertilizer plants. The DTI also think that it must be one of them. However, neither they nor we have any indication that such drastic price increases have taken place. We have also sounded out the Commercial Counsellor at the Indian High Commission on the more general problem of recent massive price increases by foreign contractors in India. According to him there have been increases by most foreign contractors, both as regards their local costs and the necessary imports for major contracts. However, so far as he knows, these have been generally in line with the inflationary tendencies in the industrialized countries and the Japanese and our other competitors have not increased their prices any more than we have.

29 March 1974

Cc:

Mr Wilford Mr Youde

Genge Chlum.

G B Chalmers

South Asian Department

(17293) Dd.897465 400m 1/73 G.W.B.Ltd. Gp.863