CONFIDENTIAL
071574
MDHIAN 5426
THEIR GROUP WOULD BE COMPETITIVE IN OTHER ASPECTS OF THE BID. AS FAR AS MITSUI'S PARTICIPATION WAS CONCERNED, OBVIOUSLY IT WAS CLEARLY TAKING A RISK TO BREAK ONE OF THE PRE-QUALIFYING RULES BY DROPPING A MAJOR PARTNER IN THE GROUP. MOREOVER, IF THE GROUP WAS NARROWED TO ONLY TWO BRITISH COMPANIES THEN IT WOULD BE MUCH SMALLER THAN ANY OF THE OTHER COMPETING GROUPS, WHICH MIGHT APPEAR A LITTLE MORE RISKY TO THE CLIENT. HOWEVER, THESE WERE RISKS THAT THE GROUP WOULD BE WELL-PLACED TO ASSESS.
7.
MYERS WAS RETURNING TO THE UK ON THE NIGHT OF 7 DECEMBER AND SAID THAT HE WOULD BE HAVING MEETINGS DURING 8 DECEMBER WITH DIRECTORS OF TRAFALGAR HOUSE AND COSTAIN. IT WAS A MASSIVE AND RISKY BID, BUT THEY HAD PUT VERY LARGE SUMS INTO IT ALREADY AND THEY THOUGHT THEIR BID WOULD BE AS GOOD AS ANY OTHER. THEY THOUGHT THEY WOULD BE COMPETITIVE IN PRICE WITH THE JAPANESE, AND SUSPECTED THAT THE JAPANESE TOO WOULD BE VERY CONCERNED ABOUT THE RISKS AND ABOUT THE FINANCIAL PACKAGE. THEY UNDERSTOOD THE EUROPEAN GROUP LEAD BY BOUYGUES OF FRANCE WAS IN SOME DISARRAY: THIS WOULD BE DANGEROUS SINCE THEY COULD, OUT OF IGNORANCE OF THE TRUE COSTS, PUT IN A BID SIGNIFICANTLY LOWER OR SIGNIFICANTLY HIGHER THAN THOSE WHO KNEW WHAT THEY WERE DOING (BY IMPLICATION, THEMSELVES AND THE JAPANESE). THE REMAINING GROUP, THE KOREANS, WERE THE MOST DANGEROUS OF ALL. IN HIS VIEW, MYERS SAID, THEY SHOULD NEVER HAVE BEEN PRE-QUALIFIED: THEY HAD NEVER DONE ANYTHING COMPARABLE. BUT THEY MAY GET THE SUPPORT OF THE KOREAN GOVERNMENT WHICH WOULD ENABLE THEM TO IGNORE THE RISK FACTOR WHICH WOULD BE LIKELY TO PUSH UP THE BIDS OF THE OTHERS, AND THIS COULD MAKE THEM HUNDREDS OF MILLIONS OF POUNDS CHEAPER. IF THE KOREANS GET THE CONTRACT MYERS THOUGHT SOMEONE ELSE MIGHT WELL HAVE TO COME IN AND FINISH IT LATER.
8.
THERE WILL CLEARLY BE A GREAT DEAL OF MANOEUVRING BY ALL GROUPS AND BY COMPANIES WITHIN ALL GROUPS IN THE REMAINING WEEK BEFORE THE BIDS CLOSE. MYERS ALSO MADE IT CLEAR THAT THEY WOULD NOT PUT IN AN UNQUALIFIED BID, WHICH ALSO RISKS HAVING THEIR BID DISQUALIFIED, BUT HE SAID THAT WITH THE POSSIBLE EXCEPTION OF THE KOREANS NO ONE ELSE WOULD RISK AN UNQUALIFIED BID UNDER THE HONG KONG TERMS. LEADING PLAYERS FROM ALL GROUPS WILL BE IN HONG KONG THIS WEEK. WE WILL TRY TO PICK UP AS MUCH INFORMATION AS WE CAN ABOUT WHAT THEY ARE DOING, BUT THE FINAL SHAPE OF THE BIDS WILL NOT BE DETERMINED UNTIL THE VERY LAST MOMENT.
HEAP
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