TNAG-0563-FCO40-658-Construction-of-an-underground-railway-system-in-Hong-Kong-1975 — Page 94

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XCS(75)1

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It would seem that the Modified Initial System is viable and the maximum loans outstanding are at acceptable levels.

Proposed Method of Implementation

23

The foregoing assessment of the viability of the proposed Modified Inital System is made on the assumption that it would proceed on a multi-contract basis. This is the only practical course open to the Government at present, because the single contract approach

means:

either (a) returning to the Main Sequence;

or

(b) inviting other parties to form themselves into

consortia.

Of these two courses of action (a) is not recommended, partly because it would mean going back to only two consortia and this would un- acceptably limit competition, partly because it could take a year before a formal contract could be signed and partly because there can be no certainty that such complicated negotiations would not again break down. The alternative at (b) is even less desirable because additional time would be required to allow interested parties to form consortia before they could be invited to bid for the project and, if successful, to negotiate a contract.

24

In July 1973, on Honourable Members' advice, the decision was taken to adopt the single contract approach (i. e. awarding the contract for construction and equipment to one con- sortium). This approach was adopted partly because it was thought to limit uncertainty as to the total price of the project and the amount and terms of export credit; and partly because it placed overall responsibility on one contractor.

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