TNAG-0772-FCO40-976-Modernisation-and-electrification-of-the-Kowloon-Canton-Rail-1978 — Page 35

HKIS 03/2

RECEIVED REGISTRY NO. 51 1 7 NOV 1978

OFFICER

REGIMTAY

3

Flag A

Flags

B & C

Mr Murray

HONG KONG:

INDER

No

PA

Action Taten

MODERNISATION OF KOWLOON/CANTON RAILWAY (KCR)

1. The Hong Kong Government are about to award a contract for the supply of new rolling stock for the KCR. It is important that the British contender in the field, Metrocammell (Metcan) should obtain the business, but their initial bid was much the highest of the four

received. Together with Metcam and their sub-contractors, the departments concerned in Whitehall have been making strenuous efforts to bridge the gap between the Metcam bid and that of their nearest competitor. My submission of 10 November described the state of play at that date. As a result Mr Cortazzi sent a telegram to the Governor asking him to use his influence to swing the contract Metcan's way.

Copies of that telegram and of the Governor's reply

are attached.

2.・ The Metcam price has now been reduced to the point where it is Flag fully competitive. Mr March's telegram No CREDA 344 proposes a method, agreed with the Governor for getting that price formally accepted. It involves, in effect, a British Government guarantee

that it will not be exceeded.

THIS IS A COPY

THE ORIGINAL HAS BEEN RETAINED IN THE DEPARTMENT UNDER SECTION 09 OF THE PUBLIC RECORDS ACT 1900

it might be helpful if you or

Mr Cortazzi were to telephone Mr Knighton to confirm the political importance which we attach to this contract.

17 November 1978

>

SECRET

RJT McLaren

Hong Kong and General Department