TNAG-0563-FCO40-658-Construction-of-an-underground-railway-system-in-Hong-Kong-1975 — Page 120

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SECRET

Date

17th December 1974

23rd December 1974

9th to 10th January 1975

- 3

Contents of Talks

(b) if it decides it cannot

proceed both sides should discuss terms for breaking off negotiations;

(c)

if it decides it can proceed, the revised proposal must be "broadly within the spirit of the Letter of Intent"; and

(d) meanwhile, engineering

representatives from both sides must reach agreed conclusions on appropriate design solutions. Between 7th December and 16th December continuous

engineering discussion took place in Hong Kong.

Japanese Consortium again visited Hong Kong. Informed the

Basis

Provisional Authority that it was unable to proceed (i.e. unable to make a revised proposal "broadly within the spirit of the Letter of Intent"). The Provisional Authority informed the Consortium that it could only release the Consortium from its obligations under the Letter of Intent if it agreed to pay compensation. of compensation outlined. Consortium reserved its position but agreed to receive a team representing the Provisional Authority in Tokyo to present an initial statement of a claim for compensation. Consortium also agreed to give definitive response by mid-January 1975.

Provisional Authority team visiteu Tokyo. Presented and explained

an initial statement for compensation.

Japanese Consortium visited Hong Kong. The Consortium told the Provisional Authority that it was under no legal obligation to pay compensation but that, as a gesture of goodwill,

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