TNAG-2408-FCO40-3502-Hong-Kong-Port-and-Airport-Development-Strategy-(PADS)-Brit-1992 — Page 126

CONFIDENTIAL

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CONFIDENTIAL

FM BTC HONG KONG

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OF 08125OZ MARCH 92

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HONG KONG AIRPORT PROJECT: DESIGN CONTRACT FOR THE TERMINAL

1. WE HAVE NOT REPORTED FORMALLY THE AWARD, ANNOUNCED LAST WEEK, OF THE CONTRACT FOR THE TERMINAL DESIGN TO THE LARGELY BRITISH GROUP CONSISTING OF MOTT CONNELL, BAA AND NORMAN FOSTER. IT IS A CONTRACT WORTH ABOUT GBP50 MILLION TO GBP60 MILLION AND IS SIGNIFICANT NOT ONLY FOR ITSELF BUT ALSO BECAUSE THE DESIGN IS LIKELY TO INFLUENCE THE CHOICE OF SIZEABLE QUANTITIES OF THE TERMINAL EQUIPMENT IN DUE COURSE.

2. THIS IS DOUBTLESS THE LARGEST CONTRACT AWARDED SO FAR TO A BRITISH GROUP. IT SHOULD BE SEEN MORE IN THE PROGRESSION OF SUCCESSFUL CONTRACTS WON BY BRITISH CONSULTANTS, RATHER THAN AS A MAJOR WORKS CONTRACT. IT WILL DO LITTLE FOR OUR TRADE FIGURES: BUT WILL ADD VERY USEFULLY TO OUR INVISIBLE EARNINGS. IT IS STILL A VERY SMALL CONTRACT COMPARED WITH THE BRIDGE OR THE PLATFORM.

3. THE AWARD HAS ALREADY ATTRACTED CRITICISM, NOT ONLY FROM WITHIN HONG KONG AND FROM MEMBERS OF LEGCO, BUT NOW FROM LU PENG AND CHINA. THIS SEEMS LARGELY BECAUSE IT HAS BEEN REVEALED THAT THE BRITISH GROUP WAS THE MOST EXPENSIVE OF THE THREE WHO REACHED THE FINAL SHORT-LIST (FROM SOME THIRTY-FIVE GROUPS ORIGINALLY IN CONTENTION). IT IS CLEARLY UNFORTUNATE THAT THERE SHOULD BE SUCH CRITICISM AT THE PRESENT TIME WHEN THE AWARD OF THE MAIN BRIDGE CONTRACT IS SO CLOSE WHERE WE HOPE THE BRITISH GROUP WILL WIN BUT, IF THEY ARE TO DO SO, IT WILL HAVE TO BE AWARDED OVER THE MUCH CHEAPER KOREAN BID. IT IS A PITY THEREFORE THAT THIS DESIGN CONTRACT HAS RECEIVED SO MUCH PUBLICITY.

4. THE AWARD TO THIS GROUP DID NOT SURPRISE ME. IT WAS CLEAR THAT THEY WERE WELL FAVOURED BY RICHARD ALLEN WHEN HE PERSONALLY LOOKED AFTER AND ARRANGED THE PROGRAMME FOR SIR JOHN EGAN, CHIEF EXECUTIVE OF BAA, THROUGHOUT HIS MAIN VISIT IN PURSUIT OF THIS CONTRACT.

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