TNAG-0772-FCO40-976-Modernisation-and-electrification-of-the-Kowloon-Canton-Rail-1978 — Page 45

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2007 NO. 51

14 NOV 07

OFFICER

PA

PESI HY Action Ter

GRS 264

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FM FCO 101704Z NOVEMBER 78

TOP CO

No

TO IMMEDIATE HONG KONG

TELEGRAM NUMBER 848 OF 10 NOVEMBER

Sve 30

PERSONAL FOR GOVERNOR ONLY FROM CORTAZZI

KOWLOON/CANTON RAILWAY

1. WE WERE VERY CONCERNED TO LEARN FROM MARCH THAT METRO CAMMELL'S (MET CAM) TENDER FOR THE CONTRACT TO SUPPLY PASSENGER ROLLING STOCK FOR THE KCR WAS SOME POUNDS STERLING 7 MILLION ABOVE THAT OF THE EUROPEAN CONSORTIUM WHO WE UNDERSTAND PROVIDE THE MOST

SERIOUS COMPETITION.

2. IN CONSULTATION WITH MET CAM, THE DEPARTMENTS CONCERNED IN WHITEHALL HAVE BEEN URGENTLY EXLORING WAYS OF BRIDGING THE GAP. THEY HAVE SO FAR SUCCEEDED IN REDUCING MET CAM'S PRICE BY POUNDS

STERLING 4 MILLION AND THERE ARE HOPES OF LOWERING IT STILL

FURTHER.

3. APART FROM ITS COMMERCIAL SIGNIFICANCE THIS CONTRACT HAS, AS YOU WILL REALISE, IMPORTANT POLITICAL IMPLICATIONS. THE FIRM WHICH WINS IT WILL STAND A VERY GOOD CHANCE OF SUPPLYING MATCHING EQUIPMENT FOR THE MODERNISATION OF THE LINE TO CANTON ON THE CHINESE SIDE OF THE BORDER, FOR WHICH TRANSMARK ARE ALSO LIKELY TO GET THE CONSULTANCY. THERE ARE CLEAR POLITICAL ADVANTAGES IN HAVING THE WHOLE CANTON/HONG KONG RAIL ROUTE MODERNISED BY BRITISH FIRMS. MOREOVER, FAILURE BY MET CAM TO WIN A CONTRACT PREPARED BY BRITISH CONSULTANTS TO BRITISH SPECIFICATIONS AND IN BRITISH TERRITORY COULD HAVE WIDER IMPLICATIONS FOR UK/HONG KONG AND UK/CHINA TRADE. 4. I SHOULD THEREFORE BE GRATEFUL FOR ANYTHING YOU CAN DO TO SWING THE CONTRACT MET CAM'S WAY. IF THIS CANNOT BE DONE ON THE BASIS OF THE PRESENT FIGURES, THE NEXT BEST SOLUTION WOULD BE TO CALL FOR NEW TENDERS SO THAT MET CAM CAN STAY IN THE RACE.

OWEN FILES

HD IH Kṣ G D #DIFED

·MR CORTAZZI

MR MURRAY

1

COPIES TO MR.D.N.ROYCE. ED. DOT

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