TNAG-0563-FCO40-658-Construction-of-an-underground-railway-system-in-Hong-Kong-1975 — Page 183

ADVANCE COPIES

5

RECEIVED IN

REGISTRY No. 51

20 JAN:975

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PS to PUS

HOFO GB4/13

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00 F C O

GR 130

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FM HONG KONG 130215Z

SECRET

Je last cel

I dhe IICIO

Idel FŔ Itu TRE

TO IMMEDIATE F C O TELNO 44 OF 13 JANUARY.

PERSONAL FOR SIR DUNCAN WATSON.

MASS TRANSIT RAILWAY.

FD

Mr Hanya

Th

Mr Tiny's old Mr Bhude

孔

13/1

r/i

1511

THE JAPANESE CONSORTIUM HAVE INFORMED THE PROVISIONAL AUTHORITY

THAT IT IS UNABLE TO CONCLUDE NEGOTIATIONS FOR A CONTRACT, THEIR

EXCUSE FOR FAILING TO MEET THEIR MORAL AND COMMERCIAL OBLIGATIONS

UNDER THE LETTER OF INTENT SIGNED LAST FEBRUARY IS THAT THEY COULD

NOT HAVE REASONABLY FORESEEN THE CURRENT DIFFICULTIES FACING THE

JAPANESE ECONOMY. THIS WE DO NOT ACCEPT AND, UNLESS THE CONSORTIUM

OFFERS US A REASONABLE SUM BY WAY OF COMPENSATION, WE SHALL BE

FORCED TO SPELL OUT OUR VIEW OF THE CONSORTIUM'S PERFORMANCE IN

SOME DETAIL.

2. ON TUESDAY (14TH) EXECUTIVE COUNCIL WILL BE ASKED TO ADVISE WHETHER WE SHOULD PROCEEED WITH THE CONSTRUCTIONS OF A MODIFIED

INITIAL SYSTEM ON THE BASIS OF A MULTI-CONTRACT APPROACH OR DROP THE PROJECT ALTOGETHER. THE ARGUMENTS FOR AND AGAINST EACH COURSE

OF ACTION AND THE RECENT HISTORY OF THE NEGOTIATIONS ARE SET OUT IN MEMORANDUM XCS(75)1, A COPY OF WHICH WILL BE IN BAG NO. AS

LEAVING HERE ON TUESDAY.

MACLEHOSE

BENN