TNAG-2967-FCO40-4246-Future-of-Hong-Kong-British-Consulate-General-inclusion-of--1993 — Page 59

CONFIDENTIAL

3.

Lord Prior also updated Mr Goodlad on the Kuala Lumpur

(Sepang) Airport Project in Malaysia. Lord Prior said that

progress was slow. It had been decided that GEC should not be

part of the full AJAC consortium, but should be a sub-contractor

to BICC/Trafalgar as it was primarily a construction project.

However, GEC representatives would continue to be closely

involved in the project management and John Lippet would remain on the AJAC Representative Group. Lord Prior explained that the underlying reason for the change was to do with the project financing ie GEC were reluctant to give the joint and several

guarantee that the Malaysians were insisting on. Lord Prior

said the project must start by 1 October at the latest. One

potential problem was that, because the Malaysians had local

elections coming up, they were determined that the earth moving

contracts (worth £280 million) should be placed with local

firms. However, Balfour Beatty felt that, although it may be

possible to let some of the contracts to local firms, the scale

of the project was such that a massive international effort would be required. Lord Prior described the contract as moving

earth from an area the size of a football pitch every hour for 18 months, from a jungle site.

Annadèle Bouch.

Annadele Bouch

meet.ma.ADM

SLM

CONFIDENTIAL