CONFIDENTIAL
providing the railway equipment for the rail link to the new airport. British companies may have an advantage since British
signalling equipment is already in use in the rest of the Hong Kong
railway system.
Hong Kong Government's attitude to involvement of British companies
13. The Hong Kong Government will be disposed to encourage maximum competition for the many contracts which will make up the overall project. French, US and Japanese companies are already showing great interest and the competition will be fierce.
14. The Senior British Trade Commissioner has expressed concern
that British firms may be at a disadvantage in applying for major Hong Kong Government contracts, including the new airport project.
Mr Heap has drawn particular attention to government pressure allegedly applied by the Americans to help win contracts for US firms in Hong Kong and to a widely held suspicion amongst British firms that the Hong Kong Government are so keen to be seen not to be showing favour to British suppliers that they verge towards putting them at a slight disadvantage. In a conversation with Mr Heap on 12 December, Sir Piers Jacobs, the Financial Secretary, admitted
that this could well be the case.
15. Mr Heap has drawn attention to the fact that only one UK contender (Bechtel (UK)/Halcrow) has been shortlisted for the first airport consultancy project and that the British Airports Authority, which put forward a very professional bid, failed to be shortlisted. It would be helpful if the Secretary of State could draw the Governor's attention to the strong interest being shown by British companies in the airport project and indicate that HMG is attaches comsiderable importance to significant participants by British
consultants and companies.
ROFAIT (4)
Hong Kong Department
10 January 1989
CONFIDENTIAL
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