CONFIDENTIAL
INWARD TELEGRAM
TO THE COMMONWEALTH OFFICE (The Secretary of State)
FROM HONG KONG (Sir D. Trench)
Cypher D. 13 June, 1967.
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CONFIDENTIAL No. 833.
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My telegram No. 439.
Cross-Harbour Tunnel.
GUNT FOR REDISTRATION
I have been informed by the Tunnel Company who have it in writing from E.C.G.D. that finalisation of the proposed loan finance for Costain's tender (which is the one recommended by their consulting engineers) is "necessarily subject to the satisfactory solution of the current situation in Hong Kong".
2. If it became publicly known that the tunnel project was to be indefinitely postponed because of the present confrontation with the Communists there is no doubt that this disclosure would seriously undermine public confidence which is at present only being maintained with difficulty. Further- more, position would be aggravated by knowledge that the brake was being applied by E.C.G.D. which is regarded as an instrument of H.M.G. which would then be seen to be failing to support Hong Kong in its hour of need.
3. While appreciating E.C.G.D.'s viewpoint I consider that there are strong grounds for H.M.G. guaranteeing the contract in the national interest under section 2 of the E.C.G. Act and would earnestly request that this be given urgent consideration. In this connection, I understand that neither the Wheelock Marden nor Hutchison groups are now willing to act as guarantors for the other equity subscribers.
40 Meanwhile, I am considering whether notiwthstanding Hong Kong's financial and economic problems arising out of the confrontation this Government could improve slightly upon its participation beyond 12 and a half per cent of equity or $15 million, whichever is the lesser.
Distribution
H.K. WID C'
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