Dd.033009 Gp.863
CONFIDENTIAL
3.
*
No dust it could be argued that, if the project has und acquired such public, Writical importance, it would
hot in unseasonable
عليكم
& bring further, fo us pussure & bear on the Hay Kay fort for them to bear the whole of
llu
liability for the Guarantee. But This overlookes one basic point in all Nus, namily that рлый puthic piciar in Hay Kang - & I think
NOTHING TO BE WRITTEN IN THIS MARGIN
also in a wider area
9 S. E. Asia - has
brucholme
come & regard this projet as a of Hallelude
su
Halb. towards наль the Colony's future.
g
must go forward. It follows that the guarantee
required by E.C.G.D. must be found.
indeed
5. We have for some time been casting round for
some way of making a tangible gesture of support
towards Hong Kong and of confidence in its future.
We feel that this project provides the opportunity
to make a gesture which would be of the greatest
political value in Hong Kong at this present time,
and which might cost us nothing at all in the final
It would give a considerable fillip to
public confidence, strengthen pro-British sentiment
with its important commercial implications
and
outcome.
-
secure for Britain a major engineering contract
involving large quantities of British steel and
serving in the region as a notable advertisement
for British engineering skill. We have in mind the
assumption by H.M.G. of liability for half the
guarantee required by E.C.G.D. This, we feel,
should make it easier for Hong Kong to reconsider
their attitude towards guaranteeer At worst this
proposal could cost us £5 million, but in practice the
risk is smaller; the liability is proportionate to
the money expended and would be greatest when the
project was completed but not yet earning; it
the
would decrease as revenue enabled repayments of the
loan to be effected.
(
A fear has been expressed
that, because of rising local costs, the loan
required from Lloyds Bank, together with the E.C.G.D.
guarantee, would have to be increased. To avoid a
situation in which we and E.C.G.D. would find
ourselves landed with an open-ended commitment, we
feel that this is a liability which the Company and
CONFIDENTIAL
/the