CONFIDENTIAL
(c)
The extent of and nature of the risk falling upon particular British contracting parties, and their relationship with subcontractors and suppliers both British and foreign. In the case of the Tsing Ma suspension bridge, Costain and Trafalgar House are in a consortium with Mitsui; and the precise division of the work between them is not known to us, although we do know that it was the subject of some difficult negotiations. The same, I imagine, applies to Costain in respect of the airport platform.
(a) The scale of such liabilities, risks etc in relation
to the contracting companies' other commitments and activities, and the overall health of those companies.
3. It is far from clear to me how far we can make a stab at answering these questions without asking the companies. My
own belief is that it might be more satisfactory to ask the Bank of England to do the "market analyst's" study foreseen in the fourth indent of Mr Gray's paragraph 2, but presumably the Bank will also need the missing information listed above.
4. For what it is worth, (in my view not much for the reasons given above) I have the following observations, or perhaps more accurately impressions on the companies who have
emarked to us in your minute:
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AMEC: said to be about to declare a loss (property write-offs), but believed to be cash rich. Hong Kong cancellation unwelcome but not disastrous.
Costain: affected badly like others in the UK construction sector. Hong Kong cancellation could be
serious.
Trafalgar House: well known problems, new management, ultimately controlled by Jardines. Future likely to be affected as much by effect of the circumstances envisaged on Jardines.
BICC/Balfour Beatty: present exposure unlikely to be
serious.
GEC Alsthom: present exposure unlikely to be serious.
Gau
DJ HALL
DJH2.167
dti
the department for Enterprise
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