TNAG-2144-FCO40-3063-Hong-Kong-Port-and-Airport-Development-Strategy-(PADS)-1990 — Page 127

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PRE-EMPTIVE BID.

(C) THE TIME FACTOR. BECHTEL HAD SAID THAT AT THIS STAGE ANY CONSIDERATION OF A PRE-EMPTIVE BID WOULD BE DISRUPTIVE WHEN THEY HAD MUCH ELSE TO DO.

3. SIR D FORD THOUGHT FOR THESE REASONS HE DID NOT SEE HOW THEY COULD DO OTHER THAN REJECT A PRE-EMPTIVE BID FROM THE AJC GROUP.

4. I REPLIED THAT ON (A) I COULD ADD LITTLE. THE GROUP WAS CERTAINLY AWARE THAT A RANGE OF RUN-WAY SEPARATION WIDTHS WERE BEING CONSIDERED AND PRESUMABLY THEIR BID WOULD THEREFORE PUT A PRICE ON THE DIFFERENT OPTIONS. OR THEY MIGHT QUOTE A RATE PER SQUARE UNIT. BUT I WAS ONLY GUESSING. I COULD SAY HOWEVER THAT THE GROUP, AND COSTAIN IN PARTICULAR, HAD DONE CONSIDERABLE WORK ON THIS AND WOULD CERTAINLY REALISE THAT THERE WERE STILL VARIABLES IN THE SCOPE OF THIS PART OF THE PROJECT. ON (C) I SAID I COULD NOT UNDERSTAND THIS (SIR D FORD SAID I OUGHT TO SPEAK TO TOWNSEND OF BECHTEL MYSELF, WHICH I WILL DO) SINCE SURELY A PRE- EMPTIVE BID WOULD SAVE THEM TIME. I SAID OUR PARTICULAR CONCERN WAS WITH THE POLITICAL ARGUMENTS AT (B). TO DEFER TO CHINESE SENSITIVITIES WOULD SEEM TO PUT BRITISH FIRMS AT A DISADVANTAGE

AND IF EXTENDED TO THE CONTRACT THEMSELVES WOULD PUT UK FIRMS IN A VERY WEAK POSITION. SIR D FORD CONCEDED THAT THIS FACTOR WOULD NOT APPLY TO PRE-EMPTIVE BIDS FROM NON-BRITISH GROUPS (ALTHOUGH THEY WOULD PROBABLY NOT BE ACCEPTED BECAUSE OF THE OTHER REASONS). MOREOVER THERE WOULD CERTAINLY BE NO INTENTION OF EXTENDING THIS APPROACH TO THE AWARD OF CONTRACTS, WHICH WOULD BE ASSESSED ON THE BASIS OF COMPETITIVE BIDDING, WHEN BRITISH COMPANIES WOULD STAND WITH THE REST.

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5. I SAID THAT I THOUGHT THAT THIS MADE THE POSITION CLEAR. TOLD HIM THAT A DECISION BY THE GROUP WAS LIKELY TO BE MADE AT A MEETING ON 2 NOVEMBER. IN LIGHT OF WHAT HE HAD SAID I MYSELF DOUBTED WHETHER IT WOULD BE WISE FOR THEM TO PROCEED WITH A PRE- EMPTIVE BID, BUT WE AGREED THAT THIS WAS A COMMERCIAL DECISION FOR THEM. SIR D FORD EMPHASISED THAT THEY WERE ANXIOUS TO SEE

BRITISH COMPANIES DO WELL.

6. IN LIGHT OF THE ABOVE I SEE NO REASON TO CHANGE THE ADVICE IN MY TELNO 334 TO FCO (PARA 4) THAT THE AJC GROUP WOULD BE GAINING NOTHING, AND PERHAPS PUT THEIR POSITION AT RISK, BY PROCEEDING WITH THE PRE-EMPTIVE BID. IF NONETHELESS THE GROUP ARE KEEN TO PROCEED, THE WEAK POINT IN THE HKG ARGUMENT IS SURELY THAT OVER

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