RESTRICTED
106012
MDLIAN 9087
RESTRICTED
FM BTC HONG KONG
TO PRIORITY INTRA
TELNO INTRA 104
OF 151020Z APRIL 92
AND TO PRIORITY SEOUL, FCO
AND TO ROUTINE ECGD, TOKYO, PEKING
67
HKA 182/3
la
TOP COPY Q DIST?
MY TELNO INTRA 88: HONG KONG AIRPORT PROJECT: THE MAIN BRIDGE.
SUMMARY
1.
THE WAR OF WORDS, WHICH HYUNDAI ARE DOUBTLESS ORCHESTRATING, CONTINUES IN THE HONG KONG PRESS. REPORT SUGGEST THE HONG KONG ADMINISTRATION ARE SEEKING A VERY LARGE PERFORMANCE BOND FROM HYUNDAI. HYUNDAI'S CHINESE JOINT VENTURE PARTNER SHOUTS FOUL.
DETAIL
2.
THE SOUTH CHINA MORNING POST OF 15 APRIL CARRIED A PROMINENT FRONT PAGE ARTICLE UNDER THE HEADING 'ROW OVER TENDER FOR NEW BRIDGE'. THE REPORT CLAIMS THAT MACLEOD (FINANCIAL SECRETARY) HAS ASKED HYUNDAI FOR A FINANCIAL GUARANTEE IN ADDITION TO THE 10 PER
CENT PERFORMANCE BOND WHICH WAS SUBMITTED WITH THEIR TENDER DOCUMENT, TO TAKE THE FORM OF AN IRREVOCABLE LETTER OF CREDIT FOR HK DOLLARS TWO BILLION. ACCORDING TO THE REPORT, HYUNDAI ARE ASKED FOR FIRM GUARANTEES TO COVER 50 PERCENT OF THEIR BID PRICE. HYUNDAI'S HONG KONG DIRECTOR HAS SAID THAT HYUNDAI ARE NOT IN A
POSITION TO PROVIDE SUCH AN UNREALISTIC GUARANTEE AND THAT IT IS UNFAIR TO SINGLE THE COMPANY OUT IN THIS WAY, PARTICULARLY SINCE THERE WAS NO SUGGESTION IN THE TENDER DOCUMENT THAT A FURTHER FINANCIAL GUARANTEE WOULD BE REQUIRED. HIS HEAD OFFICE MAY LODGE
A PROTEST THROUGH DIPLOMATIC CHANNELS.
3. HYUNDAI'S CHINESE JOINT VENTURE PARTNER, CHINA ROAD AND BRIDGE ENGINEERING HAVE JOINED THE FRAY, CRITICISING THIS LATEST DEVELOPMENT AS BOTH UNFAIR AND OUT OF KEEPING WITH INTERNATIONAL PRACTICE ON MAJOR CONTRACTS. CHINA ROAD AND BRIDGE ARE REPORTED
TO HAVE SAID THAT THEY WILL REFUSE TO COMPLY WITH THIS REQUIREMENT. BOTH HYUNDAI AND CHINA ROAD AND BRIDGE ARE MAKING THE POINT THAT IF THE HONG KONG ADMINISTRATION THOUGHT THAT THEY WERE NOT CAPABLE OF BUILDING THE BRIDGE IN THE TIMESCALE SPECIFIED THEY SHOULD NOT HAVE PREQUALIFIED THEM. CHINA ROAD AND
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