TNAG-0508-FCO40-573-Construction-of-underground-railway-system-in-Hong-Kong-1974 — Page 129

BRITISH EMBASSY

ND.

RECEIVED IN

Chiyoda-ku, TOKYO, Japan

REGISTRY No.52

Telephone: 265-5511 Telex: 232-2270

6/38

K W Cotterill Esq

A S

18 MAR 1974

14 March 1974

HKK 21/2.

Special Guarantees Div

ECGD

59/67 Gresham Street

36

Dear Lotterill,

HONG KONG MASS TRANSIT SCHEME

1.

This in in amplification of Tokyo telegram No EXCED 9 reporting on the contacts now established between GEC and the Japanese consortium bidding for the Hong Kong Mass Transit contract.

2.

Weedon quickly accepted my point that for face reasons the Japanese wanted to see someone present

It was (from London) at a fairly senior level. fortuitous that Arthur Wright, a Director of GEC Power Engineering was here leading the CMBPE delegation and was able to escape from his other duties to become the titular leader of the GEC team.

3. Their first interview on 12 March was with MITI where they were seen by Ozu and also by Koino, Director General, International Trade Administration Bureau. It may not be without significance that Koino led for the Japanese side from MITI during the January talks with Mr Chataway

investment questions.

on

4.

Weedon and Wright received confirmation of the accuracy of the impressions I had gained in my earlier talks with Ozu, viz, that the Japanese were now ready to talk to the British about the supply of equipment on the

electrical and mechanical side worth between 10% and 15% of the value of the whole contract. The MITI people said they did not want the Italian interests involved; they confirmed that the Japanese bid was just below the fixed price set by the Hong Kong Government of HK$5,000 million for the first four of the nine stages. They revealed, somewhat to the surprise of GEC, that they did not expect to conclude the contract with Hong Kong until the autumn. They confirmed that there was a problem on the shortage of materials; they were worried about the fact that the contract was at a fixed price; they would like to see some kind of force majeure clause introduced

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/related

CONFIDENTIAL

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