SOURED relations between Britain and China over Hong Kong's political future was only a minor factor behind British companies' failure in their bids for the Guangzhou subway contracts, a senior Guangzhou official said yesterday. Ou Guangquan, chairman of Guangzhou Urban and Rural Construction Commission, denied that British companies had been penalised by Beijing for the British Government's stance over Hong Kong. Guangzhou last month awarded the city's subway contracts to German companies which had strong backing from the German Government. Mr Ou whose commission oversees the city's urban construction projects said economy, not politics, was the deciding factor. ''Our key consideration is whether their products are competitive in price and quality and delivery terms,'' he said. The Germans were chosen, Mr Ou said, because of their Government's soft loans which carried a lower interest rate and longer repayment period than those provided by their competitors. And British companies, the chairman added, still had an equal chance in competing in the eight remaining Guangzhou subway contracts which carried a total value of about US$200 million (HK$1.54 billion). These contracts covered the supply of electrical equipment, communications, power transformation, elevators and ticketing systems. According to Mr Ou, the Government would soon announce the winners of the remaining contracts. So far, companies from Britain, US, Japan, Italy and Germany have submitted bids. ''We will make a decision [on these contracts] in the first half of this year,'' the chairman said. Meanwhile, Mr Ou yesterday outlined an ambiguous transport plan for the South China metropolis including the second phase subway project and a connecting light-rail system. After completion, the three networks will have a combined daily transport capacity of 1.2-1.5 million passengers. According to Mr Ou, Guangzhou will likely finance the phase II subway construction and the light-rail network through land sale and soft loans provided by foreign governments. While the light rail system will cost about three billion yuan (HK$2.66 billion), cost figures for the phase II subway were not available yet. On a related subject, Mr Ou confirmed that the municipal Government would begin negotiations with the Army and aviation authorities over the future use of the land where Guangzhou Baiyun airport is located. Guangzhou Government announced last year that it would build a new international airport at Huaduo City to replace the heavily-congested Baiyun airport. According to Mr Ou, negotiations have not yet started because the central Government has yet approved the new airport plan. ''I am confident that the army and municipal Government will reach a deal over the land,'' said Mr Ou, who added that Guangzhou wanted to use the revenue generated from the land sale to finance the new airport.