TNAG-0508-FCO40-573-Construction-of-underground-railway-system-in-Hong-Kong-1974 — Page 112

CONFIDENTIAL

BRITISH OVERSEAS TRADE BOARD

DEPARTMENT OF TRADE AND INDUSTRY

1 VICTORIA STREET

LONDON SW1H OET

01-222 7877

A C Stuart Esq

Hong Kong & Indian Ocean Department

FCO

Great George Street

SW1

26 March 1974

(44)

Dear Bakew

HONG KONG MASS TRANSIT SYSTEM

I had an opportunity yesterday to discuss the developments in Tokyo with Mr Codd of GEC-Elliott Automation with the background described in your letter to me of 20 March very much in mind. Mr Codd said that he was fully aware that the Japanese might have a number of ulterior motives in seeming to invite GEC to participate in the construction of the Hong Kong mass transit system. It could be that the Japanese had in mind some attempt to renegotiate with the Hong Kong Government and hoped to strengthen their hand by having their principal competitor on their side. Maybe, too, the Japanese hoped that an involvement of a British interest might incline the Hong Kong Government to a more accommodating view in any renegotiation. Mr Codd also saw the danger that GEC-Elliott Automation might be cast for the role of fall guys should the Japanese be unable to meet their fixed price obligations.

GEC-Elliott Automation still retained an interest in securing sub- contracts for two parts of the mass transit scheme: the control system and the design and manufacture of rolling stock. The design and installation of the control system was interesting because there were important practical engineering lessons to be learned in making a high density system safe and flexible. The provision of rolling stock was interesting because the technical problems connected with producing rolling stock in which the human conditions were acceptable in a tropical climate were substantial. As solutions were found a technology would evolve which would be highly saleable in many other areas of the world, eg Singapore and Tehran. Against this background GEC-Elliott Automation had decided to play along with the tactical approach which the Japanese had indicated. GEC had therefore addressed a flat letter to Mitsubishi saying that GEC understood that Mitsubishi had received a letter of intent from the Hong Kong Government; that against the substantial UK experience in the con- struction of mass transit systems Mitsubishi might wish to draw

on some UK expertise; GEC therefore enclosed some catalogues and other information indicating their capabilities. GEC-Elliott Automation were now waiting for a reply to this letter.

The issue of whether GEC-Elliott Automation will or will not take part in a Japanese-managed project is really out of our hands. It is almost certainly right that it should be. Ken Cotterill and CRE share the OFP view that the Government have done their bit

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