TNAG-2142-FCO40-3061-Hong-Kong-Port-and-Airport-Development-Strategy-(PADS)-1990 — Page 52

CONFIDENTIAL

CONDENTIAL

FM BTC HONG KONG

TO IMMEDIATE FCO

TELNO 249

OF 30091OZ JULY 90

HKC 182 12

RECEIVED IN RECHTRY

O 1 AUG 1990

DESK OFFICE!

AND TO IMMEDIATE DTI, TOKYODEX

102

TOP COPY QDIST?

103

011523

MDHIAN 0620

TOKYO TELNO 610 TO FCO AND TOKYO TELELETTER FROM HUMFREY TO PEP1

DTI OF 11 JULY : HONG KONG AIRPORT PROJECT

1. WE HAVE OF COURSE REPORTED WIMPEY'S INTEREST IN THIS PROJECT (E.G. OUR OTTER 126 OF 25 MAY) AND THE VISITS OF FORREST, THEIR BUSINESS DEVELOPMENT MANAGER. I ALSO MET WITH MCIVER, MANAGING DIRECTOR OF WIMPEY INTERNATIONAL, FORREST, AND WOOD AND KENNEDY (BOTH DIRECTORS) DURING MY RECENT DUTY TOUR. THE LINE I HAVE TAKEN WITH THEM CAND WITH THE OTHER MAJOR CONSTRUCTION COMPANIES WITH WHOM I MET ON MY DUTY TOUR) WAS THAT THE PADS PROJECT IS SO VERY LARGE, AND IS LIKELY TO BE DIVIDED INTO FOUR OR FIVE MAJOR SECTIONS (I.E. THE AIRPORT ITSELF: MAJOR ROAD AND RAIL PROJECTS: THE FIXED LINK TO LANTAU WHETHER BRIDGE OR TUNNEL: AND TWO MORE CROSS HARBOUR TUNNELS FOR THE ROAD AND RAIL LINKS) AND THAT THERE IS LIKELY TO BE PLENTY OF WORK FOR EVERYONE. I HAVE TOLD THEM THAT HMG HAS COMMITTED ITS SUPPORT TO THE TRAFALGAR HOUSE?COSTAIN/MITSUI CONSORTIUM AND THAT WE ARE NOT ABLE TO GIVE ANY OFFICIAL BACKING TO ANYONE IN A STRAIGHT CONFRONTATION WITH THAT GROUP. HOWEVER, THE ANGLO JAPANESE GROUP IS SETTING ITS SIGHTS PRIMARILY ON THE FIXED LINK AND ON THE AIRPORT PLATFORM. EVEN ON THE MOST OPTIMISTIC ASSESSMENT OF THEIR LIKELY SUCCESS, IT WOULD STILL LEAVE OTHER MAJOR WORK FOR OTHER COMPETING COMPANIES AND GROUPS. MOREOVER THE HONG KONG GOVERNMENT IS LIKELY TO WANT TO SPREAD ITS OWN RISKS BY AWARDING DIFFERENT PARTS OF THE PROJECT TO DIFFERENT GROUPS. I HAVE THEREFORE CONTINUED TO ENCOURAGE OTHER BRITISH CONSTRUCTION COMPANIES TO TAKE AN INTEREST, WHILE MAKING CLEAR OUR COMMITMENT TO TH/COSTAIN/MITSUI. (THIS COMMITMENT OF COURSE MEANS THAT SOME OF THE OTHER BRITISH COMPANIES UNDERSTANDABLY ARE BEING RETICENT WITH

US ABOUT THEIR INTEREST).

2. MY OWN FEAR, WHICH I HAVE EXPRESSED IN PREVIOUS REPORTING, IS THAT EVEN IF THE TRAFALGAR HOUSE/COSTAIN/MITSUI GROUP ARE WHOLLY SUCCESSFUL AND GET BOTH THE FIXED LINK AND THE AIRPORT PLATFORM, WE WOULD STILL END UP WITH A BRITISH HALF SHARE (WITH THE OTHER HALF GOING TO THE JAPANESE) IN WHAT WOULD PROBABLY BE ABOUT A QUARTER OR LESS OF THE TOTAL PROJECT. ON A MORE PESSIMISTIC SCENARIO, THE

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CONFIDENTIAL