TNAG-2408-FCO40-3502-Hong-Kong-Port-and-Airport-Development-Strategy-(PADS)-Brit-1992 — Page 52

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FM BTC HONG KONG

TO ROUTINE DTI

TELNO INTRA 96

OF 070902Z APRIL 92

INFO ROUTINE FCO, ECGD, PEKING

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061351

72

MDLIAN 7173

TOP COMP Q DIST?

HKA 182/3

Pa

FOR HALL, HEAD OF PEP

59

MY TELNO INTRA 64: HONG KONG AIRPORT PROJECT: PLATFORM CONTRACT

1. MY TUR REPORTED THE RUMOURED PRICES ON THE BIDS SUBMITTED IN MID-MARCH FOR THIS THE LARGEST OF ALL THE CONTRACTS ASSOCIATED WITH THE NEW AIRPORT PROJECT. STRONG RUMOURS OF TWO FURTHER DEVELOPMENTS ARE CAUSING CONCERN TO THE TWO MAIN BRITISH CONTENDERS. COSTAINS AND BALFOUR BEATTY.

2. THERE ARE WIDE-SPREAD REPORTS IN THE INDUSTRY THAT THE DREGAGES-LED GROUP HAVE IN SOME WAY SUBMITTED A SECOND AND LOWER BID WHICH AT HKD11.9 BILLION IS SLIGHTLY LOWER THAN THAT OF COSTAINS BID WHICH WAS PREVIOUSLY RUMOURED TO HAVE BEEN THE LOWEST. COSTAINS HAVE ASKED ME TO TRY TO FIND OUT WHETHER THIS SECOND AND LOWER BID IS COMPLIANT AND WHETHER IT WAS SUBMITTED PROPERLY AT THE TIME OF THE OTHER BIDS OR WHETHER IT WENT IN AFTERWARDS. I HAVE TOLD THEM THAT I AM ABOUT THE LAST PERSON TO WHOM THE ADMINISTRATION WOULD PASS ON SUCH INFORMATION, BUT THAT WE WOULD MAKE SOUNDINGS AS AND WHERE WE COULD.

3. IT IS ALSO WIDELY RUMOURED THAT THE HK ADMINISTRATION ARE SUFFICIENTLY DISMAYED BY THE DEGREE TO WHICH THE BIDS ARE HIGHER THEN THEIR ESTIMATED COSTS, AND BY THE EXTENT TO WHICH THE EXTRA COSTS COME FROM THE DREDGING SIDE OF THE BIDS, THAT THEY ARE LIKELY TO SEEK RE-BIDS AROUND THE END OF APRIL FOR SUBMISSION A MONTH OR TWO LATER. MOST REPORTS SUGGEST THAT THE RE-BIDDING WOULD RELATE ONLY TO THE DREDGING PART OF THE WORK AND MIGHT CALL FOR CHEAPER, BUT SLOWER, TECHNICAL PROCESS. IF THIS HAPPENS IT WOULD OF COURSE BE UNFORTUNATE FOR THE COSTAIN AND BALFOUR BEATTY LED GROUPS IF, AS WE BELIEVE, THEIR BIDS IN THE FIRST ROUND WERE THE LOWEST AND SECOND LOWEST RESPECTIVELY. IF HOWEVER THE DREGAGES LED GROUP HAVE MANAGED TO GET THEIR NOSE IN FRONT THEN A

RE-BIDDING COULD BE HELPFUL.

4. WE WILL OF COURSE DO OUR BEST TO GET CONFIRMATION OF THESE

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