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TO 2.0. THEY WOULD THUS HAVE NO BASIS ON WHICH TO JUDGE THE PRICE

IN A PRE-EMPTIVE BID.

5. A FURTHER FACTOR WAS THAT THE GOVERNMENT TEAM WERE ALL TOO BUSY ON THE PROJECT TO BE ABLE TO DIVERT TO EVALUATE A PRE-

EMPTIVE BID.

6. NONETHELESS THE HONG KONG GOVERNMENT WAS PLEASED THAT THE AJC GROUP WAS SHOWING SUCH INTEREST, PARTICULARLY SINCE THEY

UNDERSTOOD THAT FINANCING WAS PART OF THE PROPOSED PACKAGE. BUT

THIS WAS NOT THE TIME FOR SUCH A MOVE.

7. TO THIS POINT TOWNSEND HAD MADE NO MENTION OF SENSITIVITY TO

CHINA'S REACTION TO A BRITISH PRE-EMPTIVE BID BEING A FACTOR. I

AM SURE THIS WAS DELIBERATE. I RESPONDED THAT I COULD SEE THE

STRENGTH OF HIS ARGUMENTS BUT ASKED WHETHER THIS PRECLUDED A PRE-

EMPTIVE BID LATER. I POINTED OUT THAT THE ADVANTAGE OF A PRE- EMPTIVE BID WAS TO SAVE TIME, WHICH WAS SURELY ATTRACTIVE, AND PERHAPS EVEN ESSENTIAL, TO THE HKG. TOWNSEND SAID THEY WERE VERY ANXIOUS TO GET THE RECLAMATION WORK UNDER WAY. IT WAS A CRITICAL PATH ITEM. NEXT YEAR THEY MIGHT HAVE A CLEARER UNDERSTANDING OF CHINESE EXPECTATIONS. THIS PART OF THE PROJECT WOULD ATTRACT CONSIDERABLE CHINESE INTEREST, AND THEY WOULD JUMP UP AND DOWN' IF CONFRONTED WITH A PRE-EMPTIVE BID. LAND TRANSFER FROM THE GOVERNMENT TO THE AIRPORT AUTHORITY WAS, UNDER THE JOINT DECLARATION AND OTHER AGREEMENTS, A DELICATE PROCESS. IF ANYTHING UNUSUAL WAS DONE CHE CLEARLY MEANT A PRE-EMPTIVE BID) 'IT COULD CREATE EXTERNAL EVENTS THAT WOULD SLOW THE PROCESS DOWN'. IN ANY EVENT IT WOULD BE NEXT YEAR BEFORE THE AIRPORT PLATFORM COULD

BEGIN TO BE DISCUSSED. ASSUMING THAT THE HKG KEEP TO ITS TARGET OF THE AIRPORT OPENING IN EARLY 1997 (AND HE IMPLIED THAT THIS WAS NO LONGER AS CERTAIN AS PREVIOUSLY), THEN CONTRACT SPECIFICATION AND THE BIDDING PROCESS FOR THE PLATFORM WOULD HAVE TO BE IN PLACE IN EARLY 1991. THE CONTRACT WOULD BE PUT OUT TO BIDDERS IN THE FIRST QUARTER 1991, WITH SELECTION IN THE 3RD QUARTER 1991, AND THE TIMING WOULD BE VERY TIGHT.

8. I ASKED IF THIS IMPLIED THAT A PRE-EMPTIVE BID EARLY NEXT

YEAR MIGHT BE MORE FAVOURABLY RECEIVED WHEN THE VARIABLES HE HAD MENTIONED WOULD LARGELY BE DEFINED. AFTER SOME HESITATION HE SAID HE THOUGHT THAT IT WOULD HAVE TO BE A COMPETITIVE PROCESS AND

INDICATED THAT THIS WOULD BE BECAUSE OF CHINESE REACTIONS. HE

THOUGHT A PRE-EMPTIVE BID AT ANY TIME WOULD HAVE TO BE EITHER REJECTED OUT-RIGHT OR PUT ON THE SHELF INDEFINITELY WITH A HIGH

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