TNAG-2140-FCO40-3059-Hong-Kong-Port-and-Airport-Development-Strategy-(PADS)-1990 — Page 52

CONFIDENTIAL

FM BTC HONG KONG

TO IMMEDIATE DTI

TELNO OTTER 75

OF 11041OZ APRIL 90

INFO PRIORITY FCO

CONFIDENTIAL

-Pq=

PADS

176523

MDHIAN 8198

HKC 18212

18

FOR ADAMS, HEAD OF PEP

HONG KONG AIRPORT:

1.

RECENT DEVELOPMENTS

THE HONG KONG GOVERNMENT HAVE ANNOUNCED THAT THE PROJECT MANAGEMENT CONTRACT HAD BEEN AWARDED TO BECHTEL. THIS IS THE FIRST MAJOR CONTRACT TO BE AWARDED IN THIS PROJECT. THE WORK WILL BE DONE BY BECHTEL USA. VERY LITTLE WILL GO TO BECHTEL UK AND ALMOST NOTHING TO HALCROW.

2. A DECISION ON THE MASTER PLAN CONSULTANCY WAS EXPECTED LAST WEEK BY THE MAIN CONTESTANTS. THEY UNDERSTAND THERE HAS BEEN SOME DISAGREEMENT ON THE GOVERNMENT SIDE AND THAT A DECISION SHOULD NOW BE TAKEN AT A MEETING ON 17 APRIL WITH AN ANNOUNCEMENT ON 18 APRIL AND NEGOTIATIONS WITH THE SUCCESSFUL COMPANY TAKEN ON 23 OR 24 APRIL FOR WORK TO START IN JUNE. THE LEADING CONTENDERS APPEAR TO BE PARSONS, AUSTIN AND BECHTEL, ALL OF THE USA. ALL HAVE BRITISH ASSOCIATES. THE LARGEST BRITISH CONTENT APPEARS TO BE THE AUSTIN GROUP WHO HAVE A JOINT VENTURE PARTNERSHIP WITH ACER OF THE UK, WITH ACER EXPECTING TO GET 50 PERCENT OF THE WORK, AND OTHER BRITISH ASSOCIATES GETTING SOME OF THE REMAINDER. THERE IS ALSO A SIGNIFICANT BRITISH CONTENT IN THE BECHTEL GROUP WHO WOULD GIVE SOME OF THE WORK TO BECHTEL UK AND A CONSIDERABLE PROPORTION TO HALCROW OF THE UK. THE PARSONS GROUP ARE ASSOCIATED WITH MOTT MCDONALD AND WITH SCOTT, WILSON KIRKPATRICK.

3.

THERE WILL BE A CALL FOR TENDERS IN JUNE FOR THE WESTERN KOWLOON RECLAMATION (TO RECLAIM THE AREA FOR THE ROAD AND RAILWAY LINKS) FOR DREDGING AND A SEA WALL TO THE VALUE OF PDS STG 15.7M (HKD200 MILLION). SO FAR AS I AM AWARE NO BRITISH COMPANIES HAVE SHOWN AN INTEREST IN THIS WORK. IT WOULD BE A GREAT PITY IF WE DO NOT HAVE CONTENDERS FOR ALL THE LARGE CONTRACTS.

4.

ANOTHER MAJOR CONTRACT LIKELY TO BE PUT TO TENDER IN SEPTEMBER OR OCTOBER IS THE PDS STG 23.6M (HKD 300 MILLION) CONTRACT WITH PROVISION TO EXTEND TO PDS STG 39.3M CHKD500 MILLION) FOR THE

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CONFIDENTIAL