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053705
MDHIAN 6177
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FM BTC HONG KONG
TO IMMEDIATE DTI
TELNO OTTER 004
OF 020915Z JANUARY 91
INFO PRIORITY FCO, PEKING, TOKYO, ECGD
FOR ADAMS PEP
351 90/HKC182/2
MY TELNO OTTER 227: HONG KONG AIRPORT PROJECT
Pa
нив 182 13
91
1. AS INDICATED IN MY TUR, THIS IS NOW A FAST-BREAKING SCENE. THE FOLLOWING FURTHER INFORMATION COMES LARGELY IN CONFIDENCE FROM PRIVATE SECTOR SOURCES INCLUDING JOHN DOWNER, CHAIRMAN OF MAUNSELL WHO ARE PREPARING THE AIRPORT MASTER PLAN AND ARE THEREFORE WELL-INFORMED.
ADVANCED WORK CONTRACT AT CHEP LAP KOK
2. DOWNER CONFIRMED AND ADDED TO THE INFORMATION IN MY TUR. THE SUCCESSFUL BIDDER WAS KUMAGAI OF JAPAN WHO WILL RECEIVE A LETTER FROM THE HKG ON 14 JANUARY CONFIRMING THIS. (SINCE IT WAS EARLIER PLANNED TO ISSUE THE LETTER ON 2 JANUARY, DOWNER BELIEVES IT IS DELAYED TO ALLOW THE NEXT ROUND OF TALKS WITH THE CHINESE TO BE COMPLETED: THEY END 12 JANUARY.) KUMAGAI'S BID WAS HKD310
MILLION. NITSUMISHI WERE 340 MILLION. BOUYGES AND ASSOCIATES 360 MILLION, AND GAMMON/COSTAIN 550 MILLION. MAUNSELL AS ADVISERS TO THE GOVERNMENT ON THIS CONTRACT HAD ESTIMATED THE COST FOR THE GOVERNMENT AS HKD 450 MILLION DOWNER SAYS HE BELIEVES KUMAGAI
MUST BE PREPARED TO TAKE A SUBSTANTIAL LOSS AT A PRICE OF HKD 310
MILLION AND RECALLED THE MONEY THEY LOST ON THE HONG KONG BANK CONTRACT. THESE FIGURES ARE CLEARLY BAD NEWS FOR BRITISH PROSPECTS. NO AMOUNT OF SUPPORT FROM HMG IS LIKELY TO HELP
BRITISH COMPANIES IF THEY CANNOT GET CLOSER THAN THIS IN THE BIDDING. MOREOVER IF KUMAGAI ARE PREPARED TO TAKE A LOSS OR LESS
THAN NORMAL MARGINS THEN IT WOULD INDICATE THE SERIOUSNESS OF THEIR INTENTIONS IN GETTING THE SUBSEQUENT LARGER CONTRACTS.
THE RAIL LINK
3. THERE WILL BE A CRITICAL GOVERNMENT MEETING ON SATURDAY 5 JANUARY WHEN THE FUTURE OF THE RAIL LINK WILL BE DISCUSSED AND PROBABLY DECIDED. DOWNER TELLS ME THAT, CONTRARY TO THE REPORTS IN MY TUR, THE GOVERNMENT ARE BEING ADVISED TO PROCEED WITH THE RAIL LINK ALTHOUGH ARE BEING OFFERED THE OPTION OF DELAYING IT BY
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