TNAG-0564-FCO40-659-Construction-of-an-underground-railway-system-in-Hong-Kong-1975 — Page 155

الهاد

Sir Murray MacLehose

HONG KONG: MASS TRANSIT RAILWAY (MTR) PROJECT

1.

Representatives of British contracting firms will be calling on you on 10 April at 3.00 p.m. (room W79). We have arranged this meeting at the request of the Department of Trade, who will also

be represented, and I understand that the contractors' representatives will wish to discuss the system of tendering for the Mass Transit Railway.

2. None of the main British civil engineering companies have shown any interest in tendering for the civil work in connection with this project, although the deadline was extended from the end of February to the end of March.

3. The DOT have done their best to stimulate interest, but British industry objects strongly to the MTA's decision to split the civil works into 25 separate contracts. The firms argue that this will give rise to insurmountable problems of co-ordination between different contractors; risk triggering off competitive bidding for scarce skilled labour in Hong Kong; complicate financial arrangements; and make completion deadlines more difficult to meet. The industry

has put its objections to the MTA in a letter from the Export Group for the Constructional Industries (EGCI), summarised in the attached Creda telegram number 60 of 18 March to Mr Kinnear. In effect, the British companies refuse to consider tendering under the present terms and request that these terms be redrawn to take account of the industry's views. The MTA, on the other hand, have said that the present terms have not prevented a number of important foreign companies from registering as potential tenderers. The latter are said to include Hochtief of Germany, SIME of Italy, Kaiser Steel of the USA, Intermetro of Italy, Kumagi Gum of Japan.

1.

British firms have shown slightly more interest on the mechanical and electrical engineering side, but here too it is clear that GEC. for instance, still consider that they were sorely treated by the MTA during the first abortive round in 1973. GEC claim that their tendering costs then amounted to 100,000, and they are not disposed

/to

CONFIDENTIAL

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