TNAG-1060-FCO40-1310-Mass-Transit-Railway-in-Hong-Kong-1981 — Page 154

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RECEIVED IN REGISTRY NO. 51

EXPORT CREDITS GUARANTEE DEPARTMENT

DECK OFFICER

PO Box No 272 Aldermanbury House Aldermanbury London EC2P 2ELLeken

Telex 883601

J Butterworth Esq

HM Treasury Parliament Street LONDON SW1P SAG

Mr. Morace 22/4

Telephone 01-606 6699 ext

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17

Mr withamson

PD3/44-0/913715/31 i. Ne protilams,

Date

15 April 1981

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HONG KONG - MASS TRANSIT RAILWAY CORPORATION ("MTRC"): ISLAND LINE

1.

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Minaw on the lines mentioned in Para 16 the'. M. A Scare

You will know that, after the China Light & Power "B" station case, the next major project falling for consideration in Hong Kong will be MTRC's Island Line extension. This requires the construction of some 122 Km of route running along the northern side of Hong Kong Island, linked to the two existing stations on the Island, plus thirteen new stations and a new depot. UK companies will, as in the

earlier MTRC cases, compete for the rolling stock, tracklaying, mechanical and electrical equipment. UK civil engineering contractors are also showing a keen interest. The overall project value has been broadly estimated at about £600m.

2.

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MTRC recently issued a prospectus inviting interested parties to pre-qualify to tender: I attach a list of the UK companies who have so applied. We have already received enquiries from several of the UK companies concerned, and the purpose of this letter is to seek your authority to provide support under Section 2 of the EG Act.

3.

The project falls into 3 broad divisions, ie the civil engineering and the equipment contracts dealt with in MTRC's prospectus plus consultancy services. Firm tenders for the main construction contracts are to be submitted between September of this year May of next, with contracts awarded between November 1981 and July 1982 (tenders for some advance contracts will be required earlier than this, but I am not aware that any UK contractor intends to bid for these). The first tenders for equipment contracts have to be submitted in March 1982, with contracts awarded in Summer 1982, and tenders for rolling stock have to be in by 1 January 1982. with contracts awarded in May 1982. Thus, although in some cases the actual contracts will not be signed for some time, we are clearly at the stage when UK contractors require a firm indication of the terms on which ECGD support will be given.

Civil Engineering

4. The construction work is to be split into some 40 separate contracts including a contract for tracklaying and 11 major contracts for bored tunnelling for the under- ground routeway and associated stations. ECGD has not yet received applications for the tunnelling contracts although I understand that Balfour Beatty (in association with Mowlems and Nuttalls) and Kier (in association with Gammon) intend to bid for all the tunnelling work. Other contractors are understood to be considering bidding for a variety of other construction work, but we have seen only one application so far, from Taylor Woodrow who propose to bid for three construction contracts and the tracklaying contract. Henry Boot, who won earlier tracklaying contracts for MTRC will also compete for this item.

5.

Reliable estimates of contract values are not available at this stage. Woodrow have suggested a figure of about £20m for each of the 4 contracts about which

Taylor

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