TNAG-2259-FCO40-3255-Hong-Kong-Port-and-Airport-Development-Strategy-(PADS)-Brit-1991 — Page 247

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From:

RA Burns

HKB 182 13

Date:

9 August 1991

- 5 SEP 1991

Cc:

Sir J Coles

iS GF 1418

88

I Hoar

(mate only)

1418

14/~-

ли

N

Mr Miles

Mr Cox, HKD

(85

AM

А

B

(83)

C

D

Mr Bayne

HONG KONG : PORT AND AIRPORT DEVELOPMENT SCHEME (PADS)

1.

Thank you for your minute of 8 August commenting on Mr Miles' earlier minute of 2 August about the Prime Minister's visit to Peking in early September and what he might say about the tenders for the airport contract.

2.

I agree that it will be helpful to the long-term viability of the airport scheme and the prospects of the Chinese honouring the spirit as well as the letter of their undertakings if Chinese firms are involved in the work. I attach a copy of the airport MOU, from which you will see that this is an explicit feature of the Agreement. The Chief Executive of the Provisional Airport Authority has made it known that those consortia which have prequalified for the Airport Platform contracts are at liberty to adjust their membership to include Chinese firms, providing that this does not affect the fundamental viability of the consortium.

attached.

3. I do not quite share your interpretation of the attitude of the Hong Kong Government hitherto. They are opposed to any overt tilting of the playing-field in the British direction because, by definition, this means that the tax-payers of Hong Kong would be expected to pay somewhat more for the work than could be secured from a totally competitive bid. We all recognise that, particularly with the Fixed Link, there will be more to an assessment of the tenders than price. It will be important to have the work done by a consortium which is really up to the job.

4.

But the Governor had already made it clear in correspondence last spring that, other things being equal, the Hong Kong Government would hope that British firms would do well. It is hard to see that he could say more without explicitly implying that the Hong Kong Government would be prepared to accept a British bid even it was not competitive and even if this was at some additional cost to the finances of the Hong Kong Government.

5.

There are also, as you rightly say, some anxieties vis à vis the Chinese, because any suggestion that we were fixing the contract process in the British favour would fuel the

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