If Metro-Cam do not secure the two Hong Kong contracts they will have a serious gap in their order books in the early 1980 which may put the viability of the company at risk.
Commercial/Trade Case
Involvement in the Hong Kong section of the Kowloon to Canton railway could be a foundation for further railway orders on the China leg of the line as well as other Chinese plans for major new rail and infrastructure expansion. Both Transmark, Metro-Cam and GEC are likely to be interested in these developments in China. Failure by Metro-Cam on the KCR project may well jeopardise their bid on the Hong Kong mass transit underground railway project. The number of projects of this nature in which UK companies might be involved is extremely limited - to no more than one or two a year and it is essential, therefore, that every effort be made to secure this work in Hong Kong.
Development Case
Hong
The rail-link with China is Hong Kong's life-line. Kong is dependent on China for vital supplies, particularly of basic foodstuffs which accounted for 30 of her imports from China in 1977. (17% of Hong Kong's total imports were from China.) The present single-track railway suffers from substantial freight congestion and the project will case this problem substantially. Equally, it will relieve the heavy volume of traffic using the road network to the benefit of passengers as well as freight carriers.
Other Factors
The UK bid for the rail-cars is against substantial international competition. The UK bid for the rail-cars is known to be as low as possible but the Japanese bid,
with geographic proximity and low shipping costs, is below the Metro-Can price.
Conclusion
It is recommended that application be granted in principle for a loan of £2.5 million conditional upon the award of the rail-car contract to a UK company.
2
$
No comments yet.
Private notes are available after approval.