TNAG-0564-FCO40-659-Construction-of-an-underground-railway-system-in-Hong-Kong-1975 — Page 158

NOTE

In connection with the proposed appointment at

3 00 p.m. on Thursday 10 April, I spoke this morning with Mr. Thompson, Chairman Designate of the Mass Transit Authority, and explained that I had learned from Mr. O'Keefe that the delegation were concerned with the proposed offer of contracts for the revised Mass Transit Scheme, and particularly as regards (i) the number of individual contracts being offered; (ii) the difficulty of tendering for civil engineering works with the present amount of data on soil conditions, and (iii) the terms of contract governing escalation of prices.

2.

Mr. Thompson expressed surprise that the group should ask for an interview with H.E. in view of the fact that (i) as regards G.E.C., Lord Nelson their Deputy Chairman, was seeing Mr. Thompson tomorrow in Hong Kong and there were only nine or ten E & M contracts and these could be tendered for in association. Mr. Thompson himself was not aware of G.E.C. having difficulties over the Provisional Authority's proposals; (ii) as regards civil engineering, it was essential if the scheme was to be completed as soon as possible that a multi contract procedure be used;

in any case the terms of tender allowed for the association of individual contracts; no UK Civil Engineering Companies had registerpd to receive the detailed conditions of contract which were only going to be issued next week (there had been, in fact, a good response from non UK companies in this field); Balfour Beatty had a director in Hong Kong who was due to see Mr. Thompson tomorrow; Tarmac, although known to Mr. Thompson as a leading critic of the Authority's proposals, was not in direct touch with the Authority in Hong Kong; and Mr. Thompson had learned both from his own Consultants, Freeman Fox, and other independent Consultants passing through Hong Kong, as well as Consultants resident in Hong Kong, that UK Civil Engineering Contractors were simply not interested in Far Eastern or South-east Asian projects because of the volume of "cost plus" work which they had in the Middle East, allied with their own financial difficulties.

3.

Mr. Thompson nevertheless was very willing to look at whatever representations the Group might make to Sir Murray, if the latter still wished to see them in the light of what Mr. Thompson had said, or alternatively Mr. Thompson himself expected to be in London in the second or third week of May (? accompanied by the Financial Secretary) on financial and ECGD business, when he would be willing to see the group to discover what their problems

were.

STK/SVS

9th April, 1975

(S.T. Kidd), COMMISSIONER