CONFIDENTIAL
160128 MDHOAN 2657
HONG KONG GOVERNMENT HAVE BEEN IMPRESSED BY THEIR CAPABILITY AND RANGE OF BACKING.
THE HONG KONG GOVERNMENT HAVE LONG HAD A PRACTICE OF OPEN COMPETITION FOR MAJOR CONTRACTS AND WILL BE KEENLY INTERESTED IN VALUE FOR MONEY. IT FOLLOWS THAT TO WIN MAJOR CONTRACTS, THE PRICE AND TERMS WILL HAVE TO BE RIGHT.
- NEVERTHELESS HONG KONG IS STILL A BRITISH DEPENDENT TERRITORY AND WILL REMAIN SO UNTIL 1997. IT IS THEREFORE REASONABLE TO EXPECT THAT THERE SHOULD BE SIGNIFICANT UK INVOLVEMENT IN A PROJECT OF THIS SIZE.
- WE BELIEVE THE CONSORTIUM STANDS A VERY GOOD CHANCE OF SUCCESS PROVIDED IT CAN OFFER THE FIRM COMMITMENT OF THE COMPANIES AS PLANNED, AND IT IS COMPETITIVE AND MEETS THE REQUIREMENTS OF THE HONG KONG GOVERNMENT.
3. YOU SHOULD DRAW ON THESE POINTS IN SPEAKING TO MITI AND THE MFA, STRESSING THE IMPORTANCE OF THIS PROJECT AS A PRIME OPPORTUNITY FOR ANGLO JAPANESE COOPERATION IN REBUILDING CONFIDENCE IN HONG KONG AND THE FACT THAT IT IS THE JAPANESE SIDE WHICH APPEARS TO BE HOLDING THINGS UP. YOU SHOULD ALSO SEEK TO REASSURE THE JAPANESE GOVERNMENT ABOUT THE CHINESE ATTITUDE TO THE PADS PROJECT. IT MIGHT THEREFORE BE BETTER TO DELAY YOUR APPROACH TO MITI AND THE MFA UNTIL AFTER MR MAUDE'S VISIT TO PEKING ON 24/27 JULY, WHICH WE HOPE WILL HELP TO CLARIFY THE CHINESE POSITION.
4. IT WOULD ALSO BE HELPFUL IF YOU COULD THROW MORE LIGHT ON WHAT APPEARS TO BE AN UNCHARACTERISTIC JAPANESE FAILURE TO GET THEIR ACT TOGETHER. IT IS NOT CLEAR WHETHER THIS IS DUE TO A DESIRE TO DRIVE A HARD COMMERCIAL BARGAIN, FOR EXAMPLE OVER THE WORK SHARE ARRANGEMENTS (AS YOU KNOW WE BELIEVE THAT IT IS VITAL THAT THE UK SHOULD WIN AT LEAST HALF THE WORK WON BY THE CONSORTIUM): TO DOUBTS ABOUT THE FINANCIAL VIABILITY OF THE FIXED LINK (PARTICULARLY AS TRAFALGAR HOUSE HAVE NOT YET SHOWN DETAILED FIGURES TO THE JAPANESE): OR TO A CONTINUING UNCERTAINTY ABOUT WHETHER TO INVEST IN THE PROJECT AT ALL FOR WIDER POLITICAL REASONS SUCH AS THE ATTITUDE OF THE PRC.
5. FOR YOUR OWN INFORMATION, YOU SHOULD BE AWARE THAT:
(I) MITSUI ARE NOW VERY KEEN TO SIGN THE CONTRACT WITH TRAFALGAR HOUSE/COSTAINS BUT THE UK MEMBERS OF THE CONSORTIUM ARE NOT PREPARED TO SIGN UP WITH MITSUI OR TO SHOW THEM ANY DETAILED FIGURES UNTIL MITSUI HAS DEMONSTRATED THAT THEY CAN DELIVER THE OTHER JAPANESE PLAYERS. MANZIE HAS HINTED THAT TRAFALGAR HOUSE/
2
PAGE CONFIDENTIAL
No comments yet.
Private notes are available after approval.