Mesis also
nee anking & Nes pelical hish.
assets on which there is to be a lien earn more
or less than 5%.
Para. 4 (c) (iii)
The second sentence inverts the real
point to some extent. We are aware that we
are expected to contribute to meeting the
commercial and technical risks. But we are also
being asked to meet half the political risk,
which, it is understood, is not required under
E.C.G.D. rules. It may be reasonable that
Hong Kong should meet half the political risk if
Britain meets half the commercial risk; but
that lays open to question the other stipulations.
(Such as the nature of the lien).
Para. 4 (e)
The purport of this is not entirely clear. It is not limited to the laying out
of loan funds and seems to be designed to
protect the contractor in relation to certain
risks. These risks are normal commercial ones
and, even if E.C.G.D. is involved in guaranteeing them beyond the loan element (which is not clear),
it does not seem appropriate to lay this require-
ment on to Hong Kong Government. The Govern-
ment is in any case only one shareholder out
of six or seven and can at most undertake to use
its best endeavours.
But possibly the purport of the clause
has been misunderstood.
2.
One other point arises on guarantees.
The Treasury letter is based on the assumption
/that,