TNAG-0563-FCO40-658-Construction-of-an-underground-railway-system-in-Hong-Kong-1975 — Page 153

0003160 G.F. 316

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5.

4

Second, the Japanese

Consortium argued that their

difficulties stemmed from certain

unforeseen developments that had hit

the Japanese economy as a result

of the oil crisis in late 1973 and

early 1974. Be that as it may, the

fact remains that the effects of the

oil crisis must have been apparent for

the Consortium during the period between

the Hong Kong Government's acceptance of

the Consortium's pre-emptive bid (11th

December 1973) and the signing of the

Letter of Intent (15th February 1974).

The Provisional Authority had naturally

assumed that these developments had

been fully taken into account during

the period preceding the signing of

the Letter of Intent. The Consortium

could have withdrawn or asked for

modifications in the terms of the

Letter of Intent during this period.

But, for its own obscure reasons, it

has waited until now to withdraw.

6.

Third, by the terms of the

Letter of Intent the Consortium

explicitly undertook to provide design

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