TNAG-2250-FCO40-3233-Hong-Kong-police-patrol-boats-1991 — Page 46

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PATROL CRAFT FOR ROYAL HONG KONG MARINE POLICE (RHKMP)

1.

Vosper Thorneycroft and F.B.M Marine have tendered for this contract, which would be worth about £25-30 million sterling to the UK if they were successful. We understand the RHKMP have been favourably impressed and both designs would satisfy the customer's operational requirements. The RHKMP can make independent decisions on equipment purchases, with sums allocated by HKG, and allocation of contracts by the Central Tender Board. Procurement is carried out by competitive tender and generally no favouritism is shown to British (or any other) suppliers.

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2.

In this case tender documents were issued on 24 August to five companies: Vosper Thorneycroft, FBM Marine and three non-UK companies (believed to be from Hong Kong, Australia and Thailand). Tenders had to be returned by 23 November 1990. We understand that a problem arose all the tenders submitted were well above the target and therefore the RHKMP have asked for revised bids. The Marine Department of the Hong Kong Government are evaluating these bids on behalf of RHKMP and hope to have a firm recommendation to put to the Central Tender Board by March 1991. Part of this problem was undoubtedly due to required improvements in the original specification for the craft. Clarification talks with bidding companies are taking place now with a contract likely to be signed in April 1991.

3.

Mr Lilley, (DTI), was briefed on this contract by MOD prior to his recent visit. Both UK companies bids are thought to be very competitive. Mr Lilley raised both this and the PADS contract with the Governor and expressed his hope that British companies would be successful in these contracts. The Governor responded that he would be happy if British companies were to be successful by making the best bids!

4.

Neither MOD nor DTI have any more recent news, and we must assume that the Tender Board is presently considering the various merits of the bids they have received.

5. An intervention at this somewhat delicate stage, would raise the old chestnut of an attempt to tilt the playing field and might be best avoided. Pressure to the effect that in defence related issues Hong Kong should "buy British" might not go down too well given the complete impasse there is over funding the Royal Naval Presence Afloat. In short I think there are few political arguments we could legitimately adduce to push the British case.

ALGABS