CONFIDENTIAL
HKA 182/3
Pa
CONFIDENTIAL
FM BTC HONG KONG TO PRIORITY DTI
TELNO INTRA 114
OF 281047Z APRIL 92
AND TO PRIORITY FCO
INFO ROUTINE ECGD, PEKING, SEOUL, TOKYO
88
136200
MDLIAN 1722
TOP COPY, Q DIST ?/
FOR HALL, HEAD OF PEP
HONG KONG AIRPORT PROJECT: THE SECOND BRIDGE CONTRACT
1. BIDS FOR THIS MAJOR CONTRACT ARE DUE TO BE SUBMITTED IN JUNE WITH A DECISION COMING LATER IN THE YEAR. ALTHOUGH THE BID SPECIFICATIONS CALLED FOR A STEEL BRIDGE, TRAFALGAR HOUSE AND GAMMON HAVE RECENTLY LEARNT THAT THE INTERNATIONAL GROUP LED BY DREGAGES/BOUYGUES FROM FRANCE IS LIKELY TO SUBMIT A BID FOR A CONCRETE STRUCTURE. THEY ARE THEREFORE PLANNING TO PUT IN TWO BIDS THEMSELVES FOR BOTH STEEL AND CONCRETE BRIDGES.
2. THE PRE-QUALIFIED GROUPS ARE THE SAME FOUR AS FOR THE MAIN
BRIDGE PLUS A KUMAGAI LED GROUP. ALTHOUGH SMALLER THAN THE MAIN BRIDGE, THE VALUE WILL STILL BE IN THE HUNDREDS OF MILLIONS OF POUNDS CLASS. RUMOURS ARE CIRCULATING THAT THE HONG KONG ADMINISTRATION WILL DISCARD A BID FROM THE GROUP THAT WINS THE CONTRACT FOR THE MAIN BRIDGE DUE TO BE ANNOUNCED IN THE NEXT WEEK OR SO. I WOULD BE SURPRISED IF THIS HAPPENED SINCE IT HAS ALWAYS BEEN CLEAR THAT THERE COULD BE ECONOMIES OF SCALE IF THE SAME GROUP DID BOTH IF THEY HAD THE NECESSARY RESOURCES, SINCE THE TWO BRIDGES, TOGETHER WITH THEIR APPROACHING ROAD-WORKS, INTERCONNECT.
3. AGAIN THE BRITISH INTEREST IN CONCENTRATED IN THE TRAFALGAR HOUSE/COSTAIN LED GROUP, BUT KIER AND OTHER LESS BRITISH INTERESTS FORM PART OF THE DREGAGES/BOUYGUES LED GROUP. I ASSUME THERE WILL BE PRESSURE ON THE HONG KONG ADMINISTRATION TO SPREAD THE WORK, AND GIVE IT TO ANOTHER GROUP IF THE ANGLO JAPANESE DO GET THE MAIN BRIDGE. THEY WILL ALSO HAVE A PROBLEM WITH THE HYUNDAI LED GROUP IF THEY ARE TOLD THAT THEIR BID FOR THE MAIN BRIDGE, ALTHOUGH THE LOWEST IS NOT ACCEPTABLE. REPRESENTATIVE OF THE ANGLO JAPANESE GROUP TELL ME THAT THEY ARE CONFIDENT OF PUTTING IN A COMPETITIVE PRICE, ALTHOUGH NATURALLY ENOUGH THEY ARE CONCENTRATING THEIR ENERGIES AT THE MOMENT ON TRYING TO
PAGE 1 CONFIDENTIAL
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