CONFIDENTIAL
F4
130615
MDHOAN 4031
CONFIDENTIAL
FM FCO
TO IMMEDIATE BTC HONG KONG
TELNO 230
OF 04103OZ NOV 91
INFO ROUTINE TOKYO, PEKING
(
Mary 182/1
YOUR TELNOS 302 AND 311: HONG KONG AIRPORT PROJECT: FINANCIAL PROPOSALS AND MAIN BRIDGE CONTRACT
1. THANK YOU FOR ALERTING US TO THE HONG KONG GOVERNMENT COMMENTS ABOUT LACK OF CONTACT BY THE ANGLO-JAPANESE CONSORTIUM REGARDING THE FINANCIAL PACKAGE FOR THE MAIN BRIDGE CONTRACT. THEY HAVE GIVEN RISE TO CONSIDERABLE CONCERN HERE.
2.
DTI HAVE BRIEFED SIR GORDON MANZIE AND SCHRODERS (DETAILS
SEPARATELY). THEIR FORTHCOMING VISIT TO HONG KONG IS TIMELY.
3. WE ARE ASKING HKG SEPARATELY FOR CLARIFICATION OF THEIR CURRENT APPROACH TO FINANCIAL PROPOSALS, IE WHETHER THEIR INCLUSION IS NO LONGER OPTIONAL BUT A PRECONDITION OF A SUCCESSFUL BID.
4. WE ARE FAXING TO YOU A COPY OF THE NOTE OF THE MEETING BETWEEN BURNS (AUSS) AND SCHRODERS ON 29 OCTOBER. ALTHOUGH THEY REMAIN CRITICAL OF THE HKG RESPONSE TO AJC'S ATTEMPT TO MAKE A PRE-EMPTIVE BID LAST YEAR, WHICH LED TO SOME MONTHS OF DISILLUSIONMENT, THEY ARE NOW FIRMLY RE-ENGAGED. BUT THEY FIND HKG'S APPROACH TO A FINANCIAL PACKAGE FOR THE BRIDGE VERY FUZZY. THEY BELIEVE THAT ALL THE KEY PARAMETERS (VALUE OF CONCESSION, THROUGH-PUT OF TRAFFIC, ETC) ARE TOO VAGUE, UNCERTAIN, OR YET TO BE DECIDED FOR ANY BRITISH (AS OPPOSED, SAY TO A FRENCH) BANK TO WANT TO BE SPECIFIC. SCHRODERS CONFIRMED THAT THEY WILL BE TALKING TO THE HKG SHORTLY AT A SENIOR LEVEL, BUT FEEL THAT ANY FINANCIAL PACKAGE NOW WILL FAIL IF IT IS TOO SPECIFIC. THEIR AIM IS TO GET ENGAGED IN A NEGOTIATION WITH THE HKG OUT OF WHICH THEY HOPE GREATER CLARITY WILL EVENTUALLY EMERGE.
5.
SCHRODERS ALSO SAID THAT THERE WAS A GREAT DEAL OF DOUBT IN BANKING CIRCLES ABOUT MAKING A COMMITMENT TO HONG KONG. THEY ARE TALKING TO A WIDE RANGE OF EUROPEAN, US AND JAPANESE BANKS, BUT IT IS UPHILL WORK. THE JAPANESE IN PARTICULAR ARE VERY CAUTIOUS NOW IN THE ABSENCE OF AN EXTERNAL (IE, NON HONG KONG)
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CONFIDENTIAL
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