TNAG-2258-FCO40-3254-Hong-Kong-Port-and-Airport-Development-Strategy-(PADS)-Brit-1991 — Page 228

tel to none

FROM:

1. cc. Mr Burma

Mr Paul/

2. Mr Morris 16/1 Draft For hel. to Mr Heap

RM 15%,

PS/Lord Caithness

ра

1

DATE:

14 January 1991

CC:

Private Secretary Mr McLaren

Ms Marsden, HKD

CONTRACTS FOR PADS: LORD CAITHNESS' TELEPHONE CONVERSATION WITH MR LILLEY

1. Lord Caithness spoke to the Secretary of State for Trade and Industry on the telephone this morning.

2.

Lord Caithness said that there were a number of issues on which he wished to brief the Secretary of State before his visit to Hong Kong.

Lord Caithness said that we would send a telegram to Mr Lilley in Tokyo setting out the situation fully. Mr Lilley should also discuss the issue with the Governor.

3.

Turning to the question of contracts for PADS,

Lord Caithness said that he knew that Mr Lilley and Mr Sainsbury (with whom he had discussed this issue last October) were anxious to ensure that British companies had the best prospects for success and that competition took place on a level playing field. Lord Caithness said that there were good opportunities for British companies to win contracts related to PADS. But in a sophisticated economy like Hong Kong the Governor could not tilt the playing fields in one direction or the other. However, he had said that, if there was nothing to chose between two bids, one of which was British, there would be a natural tendency in Hong Kong to prefer the British bidder over foreign rivals. But it was essential that the bids submitted by British companies were as competitive as possible. The recent example of the advanced work contract for Chep Lap Kok in which the British bid had been the most expensive, was not encouraging. Elsewhere, British companies had not done too badly. of the 22 consultancy contracts awarded so far the UK had either won outright or had a partnership share in 17, with a total contract value of £52 million. But we had failed to win the overall management and financial management contracts, the latter had been a particular disappointment.

Redacted under FOI exemption 27(1)|

14.

Mr Lilley