Mr Mc Quee M. Welliams
Murtagen
GRS 220
CONFIDENTIAL
FM DOT 181800Z SEP 81
IMMEDIATE BTC HONG KONG
Sp
173/1
7173/1
Me Clift
f.b.
•HKG D TRESS KAO
my No. 5b26
21 SEP 1981
Hire
TELEGRAM NUMBER CREDA 175 OF 18 SEPTEMBER
FROM DURIE P E P METRO CAMMELL
INDEX
PA
No
1. THE SITUATION, AS FAR AS METCAM IS CONCERNE FOLLOWING A MEETING ON MONDAY BETWEEN MR GARDNER OF THE LAIRD
GROUP AND SIR PETER CAREY, THE DEPARTMENT OF INDUSTRY IS LIKELY
TO BE ABLE TO OFFER SUFFICIENT SUPPORT TO METRO CAMMELL UNDER
THE SCIENCE AND TECHNOLOGY ACT TO ENABLE METCAM TO TAKE FIXED PRICE CONTRACTS FOR BOTH THE ISLAND LINE AND FOR THE K CR, THOUGH THEY WILL NEED TO BARGAIN HARD ON BOTH TO REDUCE THEIR OWN LIABILITY AS FAR AS POSSIBLE. HOWEVER, LARGELY BECAUSE OF DELAYS ON METCAM'S SIDE, WE WILL NOT FINALLY KNOW THE ANSWER UNTIL NEXT WEEKEND.
2. METCAM ARE CONFIDENT THAT THEY WILL BE ABLE TO MEET THE M.T R'S TIMETABLE AND TO ENTER INTO FINAL NEGOTIATIONS WITH MR THOMPSON IN THE WEEK BEGINNING 29 SEPTEMBER. THEIR REPRESENT- ATIVES WILL NO DOUBT HAVE KEPT YOU FULLY IN THE PICTURE ABOUT THEIR DISCUSSIONS WITH THE MTR THIS WEEK. SUBJECT THEREFORE TO ANY COMMENTS THEY MAY HAVE MADE TO YOU, I WOULD SUGGEST THAT SIR KEITH JOSEPH SHOULD BE ADVISED TO TAKE THE FOLLOWING LINE IN HIS DISCUSSIONS WITH THE M T R.
(A) HE IS GLAD THAT MR THOMPSON HAS GIVEN METCAM THE OPPORTUNITY TO NEGOTIATE A CONTRACT FOR THE CARS FOR THE ISLAND LINE. PARTICULARLY IN VIEW OF THE EXCELLENT RECORD OF METCAM IN HONG KONG ON THE EARLIER STAGES OF THE M T R, THIS IS SOMETHING WHICH IS BOTH IN THE INTEREST OF M TR AND OF METCAM.
B) NEVERTHELESS IT HAS NOT BEEN EASY FOR METCAM TO WORK OUT THE BEST WAY OF TAKING THE EXCHANGE RISKS WHICH THE M T R WILL BE PUTTING ON THEM BY INSISTING ON A FIXED PRICE CONTRACT IN H K DOLLARS AND HE UNDERSTANDS THAT THEY ARE EVEN NOW FINALISING THEIR OWN ARRANGEMENTS TO DO THIS. HE IS CONFIDENT THAT THEY WILL VERY SHORTLY BE IN A POSITION TO ENTER INTO FINAL NEGOTIATIONS.
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3. THE SAME IS TRUE, MUTATIS MUTANDIS, FOR THE K CR THOUGH YOU SHOULD BE AWARE THAT METCAM WOULD HOPE TO PURSUADE THE HONG KONG AUTHORITIES TO AGREE TO A SLIGHTLY HIGHER PRICE THAN THE ONE THEY HAVE PROPOSED. IN NEITHER REPEAT NEITHER CASE SHOULD IT BE HINTED THAT THERE IS EXCEPTIONAL GOVERNMENT ASSISTANCE. 4. AS FAR AS OTHER CONTRACTS FOR THE ISLAND LINE ARE CONCERNED,
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