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CONFIDENTIAL
98
2 February, 1968.
Hong Kong Harbour Tunnel
1
ichael Montague of B.3.E.C., Asia, passed through here last week, and during a stag dimer
Rave. for him Foter Scales the Managing Director of Theolock Harden took me on one side to talk about the Tunnel. De covered familiar ground, but the burden of his song was that the Tunnel Company are still interested in getting the project under way. (This is hardly surprising sinco they face about 6 million fees for the consultants if the project finally proves abortive). He assured me that the eculty subscribers could raise the equity without too much difficulty. As far as the Tunnel Company are concerned the project is stalled by the failure of the Hong Kong Coternment and the British Government (i.c. Export Credit Guarantee Department) to come to terms. He asked whether a senior official or 4.0...). would come to Hong Kong to make a last effort to get the project off the ground,
Following this dinner I took Montague to see Scales in his office the next morning. I was unable to be present at the interview myscle owing to an engagement elsewhere, and Montague did not have time to tell me what transpired. No & you will extract this information from him in London.
3. The day after Hentague left here I received a visit from Randall of Costains. y attempts to get him an intervi with the Hong Kong Govermont produced a meeting betwebn me and John Cowperthwaito, the Financial Secretary. Comper- thwaite said that it was quite impossible for him or his From a department to meet the prospective contractors. subsequent conversation It emerged that he is still feeling very bitter over the way this project has been handled in Thitehall, He said that the British Government having offered to underwrite half the guarantee, had then dcliber- ately raised the conditions quoted by 1.0.3.D. in a manner which they knew would be unacceptable to Hong Kong. This seemed pretty strong language to me but Cowperthwaitc confirmed that this was his view.
I understand that a meeting between the Government and the Tunnel Company was held on 26 January. I am not clear what transpired but I presume the Government must
J.. Cowers, Joq., C.R.E.D.
CONFIDENTI AL
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