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airport contract to British firms; and overt and public pressure to this end would certainly be counterproductive. fenior is the clovers and rude: Tuzy here
and that inc 9. Conversely, however, it would be extraordinary if British firms did not win a major part of the overall project. There is a legitimate expectation that, given HMG's commitment to the colony and their support on the passport issue etc, the HKG can reasonably be expected sympathetic to UK bids,
Fall provided of course that they and meet the HKG's requirements. There is also a recognition within the HKG that it is highly desirable to have strong continuing UK Sovereignt
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interest in Hong Kong following the Transfer of Power.
We thus have some political leverage but it has its limitations, tape!
and needs to belexploited with care: The former Prime Minister and the Foreign Secretary have conveyed their aspirations expectations clearly but diplomatically and in confidence to
the Governor (this is not a matter which will have been discussed directly with other parties within the HKG). This is an issue which was also raised on Mr Sainsbury's visit to Hong Kong in September. There may well be lobbying by companies alleging that the HKG is actively resistant to UK firms winning business; we are monitoring the award of contracts carefully, and it would certainly be right to take up with the HKG any solid evidence of problems of this sort.
The Handling of Contracts
10. As already noted, foreign (notably US) firms have acquired a strong position in relation to the airport project, notably Bechtel as programme managers and Morgan Stanley as overall financial advisers. The extent of US influence concerns us. There is some evidence that some of the companies concerned, especially Bechtel, are seeking to widen the scope of their appointment and to recommend that the project is broken down in a manner which will almost certainly be against UK interests.
11. The handling of the award of contracts is essentially a matter for the HKG, but it is legitimate to express concern informally about the extent of US influence and about the implications of breaking down the project into small packages. The HKG's normal pattern is to break major projects into small packages and launch separate competitions for each of them. Given the timescale for this project - the opening of the first runway by 1997 - it is essential to move quickly; and this strongly suggests, if not negotiated contracts, at any rate limited competitions for key early elements of the project.
12. Work thus far has concentrated on the main contracts, but we believe there will also be major sub-contracting opportunities arising from the PADS project. We are currently evaluating the case for an exercise to promote UK involvement in PADS sub-contracts, based on the work done by the Channel Tunnel Unit.
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