dti
the department for Enterprise
3. UK firms are pursuing all the key elements of this important project. They have been given strong Government support in doing so. Both you and your predecessors have pressed UK interests on visits to Hong Kong and at meetings here in London and elsewhere; and the Prime Minister expressed his support for UK firms on his recent visit to China and Hong Kong. The new airport presents arguably the single largest opportunity in project activity world wide; it is also crucial to the future confidence of Hong Kong.
4.
A substantial part of the value of the project will clearly be local cost. The position naturally varies from project to project: the reclamation work required for the airport platform will have a high level of local cost while the specialist radar equipment, for example, will be largely off-shore value. Annex A sets out some very rough estimates of timing and UK value for the key elements of the airport project.
Black Point
5. The airport is by no means the only current opportunity in Hong Kong. GEC Alsthom is currently in discussion with China Light and Power about the Black Point project - major power station for Hong Kong. There are hopes that they will be awarded a negotiated contract for this project; we expect progress on this over the next few months. Annex A also sets out our current estimate of the UK value which may arise on Black Point. There are one or two other project opportunities as well.
UK Value : ECGD Cover
6. It is important to emphasise that the figures in Annex A are necessarily uncertain, but they suggest that UK firms could be aiming to win UK value worth up to £2000 million over the next two or three years. That is not to say that we realistically expect to win that volume of business, but rather that it is the level of project pursuit which we might reasonably wish to support.
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7 We must assume that ECGD cover will be required if UK firms are to win the business. This issue has been raised in general terms with Ministers by the Governor and other senior Hong Kong Government people. It was raised here recently when Richard Allen, the Chief Executive of the Provisional Airport Authority, called on Mr Sainsbury on 20 September. Sir David Ford, the Chief Secretary, raised it again with us during a call on PEP on 4 October; and the Governor has referred again to the issue during his visit to the UK this week. The availability of ECGD cover is obviously important to the companies pursuing the business; it will also be perceived as an important statement of HMG's commitment to the future of Hong Kong.
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