TNAG-0563-FCO40-658-Construction-of-an-underground-railway-system-in-Hong-Kong-1975 — Page 145

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at the time it signed the Letter of

Intent and that they could not now be

surmounted. At a meeting held in

November 1974 the Consortium asked for

a revision of the price ceiling from

$5 billion to $6 billion together with

provision for price escalation.

3.

The Provisional Authority

could not accept this request. It

holds the view that the Consortium

should have been able to assess the

effects of the oil crisis on Japan's

economy during the period between the

Hong Kong Government s acceptance of

its pre-emptive bid (11th December 1973)

and the time it signed a Letter of

Intent (15th February 1974). The

Consortium could have withdraw from

negotiations both during and after

this period but the fact remains that

it did not intimate its withdrawal

until mid-December 1974.

4.

The Provisional Authority

therefore considers that the Consortium

has committed an error in judgement

which will result in Hong Kong

suffering a year's delay in building

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