CONFIDENTIAL
HKA 182/3
Pa
mms 2/3
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126053
MDHOAN 0632
CONFIDENTIAL
FM FCO
TO IMMEDIATE SEOUL
TELNO 81
OF 27170OZ FEBRUARY 92
PERSONAL FOR AMBASSADOR FROM RICKETTS, HKD
HONG KONG NEW AIRPORT: KOREAN BID
1.
TOP COPY Q DIST?
ONE OF THE MAIN INFRASTRUCTURE CONTRACTS ASSOCIATED WITH HONG KONG'S NEW AIRPORT PROJECT IS A BRIDGE TO LANTAU ISLAND. FOUR CONSORTIA HAVE SUBMITTED BIDS, INCLUDING AN ANGLO-JAPANESE CONSORTIUM LED BY TRAFALGAR HOUSE AND THE KOREAN HYUNDAI ENGINEERING, AND CONSTRUCTION CO LTD. THE HONG KONG GOVERNMENT (HKG) ARE DUE TO DECIDE/BETWEEN BIDS IN THE FIRST WEEK OF APRIL.
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2. WE UNDERSTAND IN STRICT CONFIDENCE THAT THE KOREANS SUBMITTED BY FAR THE LOWEST TENDER RUMOURED TO BE SOME HKD5 BN. THE ANGLO-JAPANESE CONSORTIUM SUBMITTED A MORE EXPENSIVE TENDER BUT IS APPARENTLY VERY WELL PLACED.
3.
THERE HAS BEEN SOME FAIRLY OPEN QUESTIONING IN HONG KONG OF
THE KOREANS' TECHNICAL ABILITY TO CONSTRUCT WHAT WOULD BE ONE OF THE LARGEST-SPAN BRIDGES IN THE WORLD AND TO DO SO ON TIME AND
ON BUDGET. WE UNDERSTAND THAT THE TECHNICAL SPECIFICATIONS IN THEIR TENDER FOR THIS PROJECT WERE UP TO SCRATCH (THERE WAS OF COURSE A PREQUALIFICATION EXERCISE). GIVEN THE APPARENTLY SIGNIFICANT DIFFERENCE IN PRICE, IT IS POSSIBLE THAT THE HKG MAY TAKE A RISK AND GO FOR THE KOREANS.
4. IN VIEW OF THE CRUCIAL IMPORTANCE OF THIS PROJECT FOR HONG KONG, AND THE MAJOR BRITISH COMMERCIAL INTEREST IN THE ANGLO-JAPANESE CONSORTIUM, IT IS VERY IMPORTANT TO US THAT HKG SHOULD TAKE THEIR DECISIONS IN FULL KNOWLEDGE OF ALL THE FACTS.
5.
WE SHOULD BE GRATEFUL FOR ANY COMMENTS YOU CAN MAKE ON THE KOREANS' ABILITY TO HANDLE THIS PROJECT, WHICH IS WE UNDERSTAND FOR A MUCH LONGER AND MORE TECHNICALLY DEMANDING BRIDGE THAN
THEY HAVE EVER BUILT BEFORE. WE WOULD ALSO BE INTERESTED TO HAVE YOUR VIEW ON THE LIKELIHOOD OF THE KOREAN GOVERNMENT BAILING OUT HYUNDAI, TAKING ACCOUNT OF CHUNG'S POLITICAL POSITION, IF THEY GET INTO DIFFICULTIES ON THE PROJECTS. WE
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CONFIDENTIAL
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