TNAG-0772-FCO40-976-Modernisation-and-electrification-of-the-Kowloon-Canton-Rail-1978 — Page 5

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CONFEDERAT

ITNINAMA ALAISINY NO.

SHY NO. STA

IND

TRADE AND AID CONTINGENCY HONG KONG

Y POJECT,

но тестирам

HD, Feo

58

Proposal

The overall project is for the improvement of that section of the Kowloon to Canton railway which runs on Hong 20 territory. Transmark has completed a feasibility study of the project for the Hong Kong Government and are to be involved as management consultants to oversee the project to completion. The civil engineering work includes double-tracking of the line (it is currently single-tracked), new tunnelling and other improvements and for transporation the consultents have recommended the use of three-car electric multiple units powered by an overhead traction system. Metro-Cam are leading a UK consortium bidding to supply the rail-car sets and the value of this part of the package is estimated at £44.4 million and the consultancy £3 million.

Time-Scale

The Hong Kong Government are likely to take a decision on the award of the rail-cer project on 20 December. A decision on the ATCF proposal will therefore have to be communicated to Hong Kong by Tuesday 19 December.

Proposal for Aid

Although Hong Kong is not normally in receipt of UK aid this is a project of considerable importance to her development. It is proposed that a loan be made under ATCP Varient 4 (68 interest over 25 years with 3 years grace) to cover the element in the consultancy work covering the signalling, trains and power supply (approx £750,000). This would require a total ATCF input of about £2.5 million.

Potential UK Sunoliers

Metro-Cam with GEC and various sub-contractors.

Industrial Case

A successful bid by Metro-Cam would provide some (400 jobs for direct workers for a 3-year period plus a similar number in subcontracting firms), C2,400 man-years of work These would be jobs preserved rather than new ones, and would be principally in the Birmingham and Manchester areas Apart from direct employment effects, failure in Hong Kong would be exploited by Metro Cam's international competitors with potentially ruinous effects on prospects on gaining future sales, including the second stage of the Hong Kong mass transit underground railway. This would put the company at a grave disadvantage in a world market for new railway development which could be in the region of several £000 ms over the next few years.

The loss of competitive edge could lead to a progressive weakening in our ability to win orders, which would have severe longer-lena effects on the railway rolling-stock and equipment manufacturers.