(c) E.C.G.D.'s normal requirements are complied with.
particular:
(i)
(ii)
(iii)
That they are given a lien on all the company's earnings and no attempt will be made to press a prior claim for dividends or other charges.
In
That the Hong Kong Government guarantee is given in the form required by E.C.G.D., i.e. a lien on the Hong Kong Government's funds held in London in a viable form acceptable to E.C.G.D.
t
The repayment guarantee from the Hong Kong Government (and H.M.G.'s backing 50 per cent commitment) will be called on in the event of failure to pay in any circumstances, whether political, technical or operational. This may seem obvious, but there is some danger that the Hong Kong Government might think it is asking us for a guarantee against major political risks only, and so regard its own guarantee as similarly restricted. But it is normal E.C.G.D. practice to look to the guarantor to make good any failure by the borrower to repay even if, for example, this arises from poor performance in operating the Tunnel, and hence inadequate revenues to service the loan.
(a) The Hong Kong Government will recognise that, at a future
time if its guarantee is called, it might then be hard- pressed to use its overseas assets for other purposes. This is a consideration which you and the Hong Kong Government need to take into account now, in reaching the decision on whether to give the necessary guarantees for the Tunnel to proceed. There can be no question of increasing H.M.G.'s 50 per cent share at a later stage.
(e) The contractors will have risks in advance ordering and construction outlays. They will no doubt seek to minimise these risks by providing in the contract for regular and speedy payments for work completed, by progress payments and advances for outlay, and by quick cash settlement for goods shipped from the U.K. It will
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