TNAG-0564-FCO40-659-Construction-of-an-underground-railway-system-in-Hong-Kong-1975 — Page 153

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FILE NOTE

COMMERCIAL IN CONFIDENCE

HONG KONG MASS TRANSIT METROPOLITAN CAMMELL

1

Mr Sansome, Managing Director of Metropolitan Cammell called on Mr Royce to-day to discuss his company's approach to the H K Mass Transit ProjectA. I was also present.

2 Mr Sansome began by emphasing the importance his company attached to securing the contract (No.El) for the railcars (EMU's whose value could exceed £30m) which would fill an awkward gap in Hetćan's produc- tion programme. The contracts Metcars had won for the Piccadilly line extension to London Airport and for the Glasgow rapid transit (RT) system would provide some work; the company expected to secure the contract for the Newcastle RT and believed that as a member of the GEC group pursuing railway electrification contracts in Iran its chances of obtaining Iranian rolling stock orders were good. But none of these contracts would fill the current gap in its production prograrne for 1976/77, and since work on London Transport's next order could not start before 1977 the Hong Kong contract could help the company avoid what could be a serious situation which could put it out of business. Metçam whose capacity was eight cars/week (it has a worksforce of 1000) could survive for a time on 4/5 cars a week but not for one or two years on that level of work.

3 Metcan therefore intend vigorously to pursue the Hong Kong MTA contract. Mir Sansome will be in HK for a week from the 14th April for discussions on the MTA and one or two lesser projects.

He was strongly advised to discuss the position with fir Kinnear of the Post both generally and with respect to the question of local representa- tion which was exercising him at the moment before beginning his round of meetings. I undertook to put Mr Kinnear on warning about the visit.

4

Mr Sansome is an old acquaintance of Mr Ridley and others on the MTA, whom he will be meeting during his visit and believes they are well disposed towards his company. He will seek to influence the drawing up of the rolling stock contract specifications in favour of Metcan Designs.

S Mc Sansome has a provisional agreement with GEC that his company would join a GFC-led consortium if GEC decided to put an M & E package together, but this agreement would not exclude an independent Metcan bid for the EU's of Metcam's participation in R.. a European con- sortium. He will review his company's position if the light of his discussions in Hong Kong.

6 Mir Sansone made a strong plea for British bids to be given the benefit of favourable credit terms, perhaps as favourable as those relating to the British offer on the first bidding round. Mr Royce