CONFIDENTIAL
075154 > MDLIAN 0832
470 MILLION IS TO BE LENT BY A GROUP OF BANKS LED BY THE HONG KONG AND SHANGHAI BANK, THE BANK OF CHINA AND DKB OF JAPAN. GORDON WU COMMENTED THAT IF GEC ALSTHOM GET THE ORDER ECGD WOULD THEREFORE NOT TO BE COVERING ANY CHINA RISKS: THEY WOULD BE COVERING ONLY THE BORROWINGS OF THESE BANKS. HE EXPECTED THE BANKS TO RAISE THESE FUNDS IN HONG KONG. (THE QUESTION OF DOG LEGGING FINANCE AS IN PEP/DTIS RECENT FAX WOULD PROBABLY THEREFORE NOT ARISE).
4.
HOPEWELL AND THE GUANGDONG POWER AUTHORITY WERE STILL WORKING THROUGH THE LAST TECHNICAL ASPECTS OF THE BIDS. CE OF THE USA HAD BEEN TOLD THAT THEY WOULD GET THE ORDER FOR THE BOILERS. GEC ALSTHOM WERE STILL FAVOURITES FOR WINNING THE TURBINE ORDER, WORTH APPROXIMATELY POUNDS STR 200 TO 250 MILLION, BUT THE JAPANESE WERE PUTTING UP A VERY STRONG FIGHT, PARTICULARLY MITSUBISHI. GORDON WU SAID HOWEVER THAT THE CHANCES OF SUCCESS FOR GEC ALSTHOM WERE STILL GOOD. I OF COURSE SPOKE STRONGLY IN THEIR SUPPORT.
5.
IT THUS LOOKS AS IF THIS WILL BE THE FIRST OF A NUMBER OF MAJOR CONTRACT OPPORTUNITIES FOR BRITISH COMPANIES IN HONG KONG REACH THE CRUNCH POINT. ECGD'S SUPPORT WILL BE A MAJOR FACTOR. GORDON WU SAID THAT ALTHOUGH GEC WERE NOW GIVING THE PROJECT MUCH MORE ATTENTION THAN BEFORE (AND HE GAVE US SOME CREDIT FOR THIS) HE REPEATED SEVERAL TIMES THAT THEY WERE NOT FIGHTING AS HARD AS THE JAPANESE. IT IS ESSENTIAL IN MY VIEW THAT THEY NOW MOVE IN FOR THE KILL ON THIS, GIVING IT ALL THE RESOURCES THEY HAVE GOT AND PURSUING IT AT AN APPROPRIATELY HIGH LEVEL.
(B)
6.
BANGKOK RAILWAY PROJECT
THIS APPEARS TO HAVE BEEN FINALISED. A CONTRACT WAS SIGNED TOGETHER WITH A BID BOND OF 500 MILLION BAHT ON 6 DECEMBER. GORDON WU SAID THAT ALTHOUGH THEY HAD NOT YET BEEN TOLD (I WILL SEEK DISCREETLY TO REMEDY THIS) OVE ARRUP WERE TO BE HIS LEAD CONSULTANTS FOR THE PROJECT. HE WANTED TO HAVE THE RAILWAY IN OPERATION WITHIN 3 YEARS. EQUIPMENT SUPPLIERS HAD TO BE READY TO MOVE VERY QUICKLY IMMEDIATELY AFTER CHRISTMAS. HE THOUGH GEC ALSTHOM WERE TECHNOLOGICALLY COMPETITIVE WITH THE JAPANESE. HOWEVER THE JAPANESE WERE BEING VERY ACTIVE IN PURSUIT OF THE EQUIPMENT AND ROLLING STOCK CONTRACT, AS ALSO WERE SIEMENS. THE TOTAL VALUE FOR ROLLING STOCK SIGNALS AND RELATED EQUIPMENT WOULD
BE IN THE ORDER OF USD 1 BILLION.
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