CONFIDENTIAL
122457
MDLIAN 4690
FOR MUCH LESS SOPHISTICATED VESSELS). THE REQUIREMENT WILL THEREFORE BE EXAMINED BY THE FINANCE COMMITTEE WHO WOULD HAVE TO PROVIDE THE EXTRA MONEY CAND WHO COULD THEREFORE DECIDE TO SCALE BACK THE REQUIREMENT) BEFORE GOING TO THE TENDER BOARD FOR THE FINAL CHOICE. BOTH THE FINANCE COMMITTEE AND THE TENDER BOARD MEETINGS ARE LIKELY TO TAKE PLACE DURING MAY.
4. IF VOSPER THORNYCROFT DO NOT GET THIS ORDER THEY WILL HAVE TO RELEASE 200 OF THEIR TOTAL WORKFORCE OF 2,500 IMMEDIATELY FROM THEIR SOUTHAMPTON SHIPYARD AND FURTHER REDUNDANCIES MIGHT FOLLOW. IF THEY ARE SUCCESSFUL IT WILL BE A NEW DESIGN WHICH WILL GET THEM BACK INTO THIS CLASS OF BOAT WHICH THEY WOULD HOPE TO SELL ELSEWHERE, WHICH EXPLAINS THEIR WILLINGNESS TO TAKE ON THE CONTRACT AT A POSSIBLE LOSS.
5. VOSPER THORNYCROFT BELIEVE THEY HAVE A BETTER PRODUCT THAN ASI BUT FEAR THE EFFECTS OF AN AUSTRALIAN GOVERNMENT SHIPBUILDING SUBSIDY AVAILABLE TO ASI OF UP TO 18 PERCENT ON COST. THE AUSTRALIANS HAVE SUPPLIED A SIMILAR CRAFT TO PAPUA NEW GUINEA UNDER AN AID PROGRAMME WHERE, VOSPER THORNYCROFT SAY, IT HAS NOT BEEN VERY SUCCESSFUL.
6. VOSPER THORNYCROFT HAVE SPENT MORE THAN POUNDS 0.25 MILLION CON AN ANNUAL TURNOVER OF POUNDS 80 MILLION) IN PURSUING THIS ORDER. THEY HAVE PAID NUMEROUS VISITS AND HAVE DONE ALL THAT COULD BE ASKED OF THEM. WE HAVE GIVEN THEM ALL THE ASSISTANCE WE CAN.
7. ALTHOUGH THE ORDER IS NOT LARGE IN GLOBAL OR EVEN HONG KONG TERMS IT IS VERY IMPORTANT TO THIS COMPANY. I APPRECIATE OF COURSE THE DIFFICULTIES IN INTERVENING IN OPEN AND WHOLLY FAIR TENDERING SITUATIONS. I ALSO REALISE THAT ANY ATTEMPT TO DO SO IS NOT LIKELY TO PRODUCE AN ANSWER OTHER THAN THAT THE RESULT WILL BE DETERMINED BY AN OBJECTIVE ASSESSMENT OF THE VARIOUS BIDDERS. HOWEVER THIS IS IMPORTANT DEFENCE EQUIPMENT FOR HONG KONG. IT IS AN IMPORTANT EXPORT ORDER FOR THE UK. IN MOST OTHER PARTS OF THE WORLD WE WOULD SURELY GIVE A BRITISH COMPANY IN SUCH A SITUATION FULL POLITICAL SUPPORT.
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8 I THEREFORE WONDER WHETHER WE COULD NOT PULL OUT A FURTHER STOP. A PERSONAL AND CONFIDENTIAL LETTER FROM THE SECRETARY OF STATE OR LORD CAITHNESS TO THE GOVERNOR COULD SAY THAT MINISTERS ARE WATCHING THIS ORDER CLOSELY AND HOPE VERY MUCH THAT THE BRITISH FIRM(S) ARE SUCCESSFUL CA COMPLICATION IS THAT ANOTHER
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