TNAG-2693-FCO40-3896-Meetings-and-calls-on-Alastair-Goodlad--Minister-of-State-fo-1993 — Page 9

CONFIDENTIAL

FM HONG KONG

TO DESKBY 23113OZ FCO TELNO 1920

OF 231025Z DECEMBER 93

AND TO IMMEDIATE

PEKING

CONFIDENTIAL

HLIA 301/1

LOJA 1994

? Mr Whitney's files

28

000774

MDHIAN 8102

TOP COPY Q DIST?

PERSONAL FOR RICKETTS.

FROM DINHAM, GOVERNMENT HOUSE.

YOUR TELNO 1088:

CALL BY LORD PRIOR ON MR.GOODLAD.

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1.

OUR COMMENTS ON THE TWO MAIN ISSUES RAISED BY LORD PRIOR ARE AS FOLLOWS:

(I) MTRC TENDER FOR ROLLING STOCK FOR AIRPORT RAILWAY.

BTC ARE IN CLOSE TOUCH WITH GEC-ALSTHOM ABOUT THEIR BID FOR THE ROLLING STOCK FOR THE NEW AIRPORT RAILWAY. GEC-A'S CONCERN IS THAT, BECAUSE THEIR BID MET FULLY THE SOPHISTICATED SPECIFICATION SET DOWN BY MTRC, IT IS PROBABLY THE MOST EXPENSIVE BID ON THE TABLE. THEY ARE CONCERNED THAT IT IS BEING IGNORED IN MTRC'S EVALUATION PROCESS AND THEY HAVE ASKED TO BE ALLOWED TO PUT IN A REVISED BID. MATHERS (MTRC CHAIRMAN), WHOM MR.GOODLAD WILL MEET AT DINNER ON 7 JANUARY, HAS MADE IT CLEAR TO CORNISH THAT IF THEY HAD SUBMITTED A BID WHICH COMPLIED FULLY WITH THE SPECIFICATION, THEY HAD LITTLE TO FEAR HE HAD GONE OUT OF HIS WAY TO REJECT SUGGESTIONS BY LEGCO OF FAVOURITISM TOWARDS BRITISH SUPPLIERS AND HAD INSISTED THAT MTRC WOULD CONTINUE TO TAKE DECISIONS BASED ON QUALITY, PRICE AND NOTHING ELSE. BUT THERE WAS NO QUESTION OF ALLOWING GEC-A OR ANY OTHER BIDDER TO PUT IN A REVISED BID OR TO MAKE ADJUSTMENTS. THE ICAC WERE WATCHING THE EVALUATION PROCESS CLOSELY. THERE WOULD BE SHARP QUESTIONS ASKED WHATEVER FINAL DECISION THE MTRC BOARD TOOK AND IT WAS VITAL TO MTRC THAT THE ENTIRE PROCESS SHOULD BE DEMONSTRABLY ABOVE BOARD. HE CLAIMED THAT MTRC WERE ASKING DETAILED QUESTIONS OF GEC-A ABOUT

THEIR BID

BID]

2. MATHERS IS NOW ON LEAVE. CORNISH'S CONVERSATION WITH HIM

PREDATES THE RECENT SPATE OF STATEMENTS FROM CHINA THREATENING DISCRIMINATION AGAINST BRITISH TRADE. MATHERS MADE IT CLEAR TO BTC THAT HE HIMSELF WAS NOT INVOLVED IN THE EVALUATION PROCESS WHICH WAS TAKING PLACE BELOW HIS LEVEL. [BUT WE ARE CERTAIN THAT IF THERE

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