5. BOTH FIXED PRICE TENDER AND TENDERS WITH PROVISION FOR ESCALATION
WILL BE CONSIDERED. THOMPSON HOPES TO GET FIXED PRICE TENDERS FOR
E SHORTER COTRACTS BUT ACCEPTS THAT ESCALATION FOR THE LONGER
CONTRACTS IS. THE ONLY FEASIBLE WAY TO PROCEED WITH INFLATION AT PRESENT LEVELS. WHERE THERE IS PROVISON FOR ESCALATION THE TENDERERS WILL BE EXPECTED TO DECLARE THE LABOUR AND MATERIAL CONTENT OF THEIR
OFFER. AND THERE WILL BE PROVISON FOR ESCALATION OF THE COST OF THESE, PROBABLY LINKED TO NATIONAL INDICES.
6. ON EQUIPMENT IT IS NOT THE INTENTION TO STICK RIGIDLY TO SET
DIMENSIONS FOR ROLLING STOCK, AS STANDARD COACHES RATHER THAN PROTOTYPES WILL BE BOTH CHEAPER AND MORE READILY AVAILABLE.
7 CONTRACTS WILL BE OF SUFFICIENT SIZE TO ATTRACT THE BEST POSSIBLE
EXPORT CREDIT TERMS. THOMPSON DOES NOT RULE OUT THE POSSIBILITY OF A GOVERNMENT GUARANTEE, BUT CLEARLY THIS IS SOMETHING WHICH HAS NOT BEEN AGREED WITH THE GOVERNMENT. HE IS LOOKING FOR EXPORT CREDIT
TO COVER 50 TO 60 PER CENT OF THE TOTAL VALUE OF THE SCHEME
OVER 10 TO 12 YEARS WITH CAPITALISATION OF INTEREST. TENDERERS WILL
BE ABLE TO BID EITHER IN HONG KONG DOLLARS OR AGREED CURRENCIES. A
LINE OF CREDIT FOR LOCAL CONTRACTORS OR JOINT VENTURES WILL BE A POSSIBILITY, PARTICULARLY AS THE PROVISIONAL AUTHORITY WOULD LIKE TO ENCOURAGE AS MUCH LOCAL MANUFACTURE AS POSSIBLE.
8. THOMPSON IS UNDER NO ILLUSION ABOUT THE DIFFICULTY OF RAISING MONEY IN PRESENT CONDITIONS. HE HAS IN MIND, AS A BACK UP, THE POSSIBILITY OF PREMIUM BOND FINANCING FOR PART OF THE COST.
9. PAUL ANDREWS, THE ENGINEER IN CHARGE OF THE PROJECT, WILL BE IN LONDON FOR TWO WEEKS FROM 3 FEBRUARY, WHERE HE WILL BE JOINED BY RIDLEY (AT PRESENT WITH NEWCASSTTLE METRO). THE MAIN PURPOSE WILL BE TO RECRUIT MORE STAFF FOR THE AUTHORITY, BUT I SAID WE WOULD BE
GLAD TO ARRANGE ANY MEETINGS THEY MIGHT WISH TO HAVE WITH
BRITISH INTERESTS. WE GAVE COHEN (CRE4) AS A CONTACT AND WILL FOLLOW THIS ONE UP.
10. THE BROCHURE REFERRED TO IN THE ADVERTISEMENT IS BEING PREPARED
HERE BY COULSON OF FREEMAN FOX AND PARTNERS. HE HOPES TO GET IT
TO THE PRINTERS TOMORROW AND IT SHOULD BE AVAILABLE IN HONG KONG BY
THE MIDDLE OF NEXT WEEK AND IN LONDON BY 23 JANUARY.
11. TO AVOID DELAY CONSULTING YOU, MAY I LEAVE IT TO YOU TO PUT OUT A MARKET POINTER THROUGH EIS BASED ON PARA 2 OF THIS TELEGRAM.
KINNEAR.
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