MR CLOAKE
cc Mr Cortazzi
Mr O'Keeffe
CONFIDENTIAL
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29 DEL.75
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24/12
HKK 21/~
29/12
HONG KONG
MASS TRANSIT PROJECT
While I sympathise with, and applaud, Mr Kinnear's enthusiasm to see UK firms get a share of the HongKorg mass transit project, I do not believe that there is any action, as the FCO, need to take at this end. It is my impression that ECGD, to whom of course Mr Shore, as their responsible Minister, has fully made known his interest, have so arranged matters that British bids for the electrical and mechanical contracts are now competitive with the French and the German competition. I shall be surprised if we do not obtain a reasonable share (i.e. over £50 m worth) of the E & M contracts.
gang
2. It will be a matter for regret if the Secretary of State has to face criticism in Hong Kong, when he visits there,about British participation in this project; but I believe that such criticism will be ill-informed and irrelevant. The history of this project has been, to put it mildly, chequered (cf Sir Douglas Clague's present troubles with his own Board); and I can well understand any British constructional firm not wishing to become involved in the civil engineering side. The E & M side offers better prospects (and, incidentally, fewer problems with local costs I will indeed stick my neck out and offer to bet against any firm involved in the civil engineering side of this project emerging with a profit. Finally, although the FCO must of course be interested in the political implications of British firms participating in the project, I should emphasise that we, unlike ECGD, with Treasury support, are being asked to undertake no financial risk: in my view this should make us very cautious about advising the Secretary of State to bring pressure to bear on the Departments more directly concerned.
23 December 1975
JC M Mason
CONFIDENTIAL
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