Ed (2829)
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Reference...
CONFIDENTIAL
10
Sir A. Galsworthy
Cross harbour tunnel, Hong Kong
Sir Anthony Percival telephoned me today to
say that he had been abroad and had only just
seen my letter to him of 10 March. We discussed
the situation in general and I told him I thought
the real need, if Costains were to get the
contract, was to modify the requirement of a
joint and several guarantee by Hutchisons and
Wheelocks. He said that oddly enough this
requirement had not been mentioned at all in a
confidential letter Mr. Clague had just sent to
Lord Rhodes under the impression that Lord Rhodes
was still a Minister in the Board of Trade.
He has now sent me a copy of this letter which
I attach.
One suggestion that occurs to me is that
we might now send a telegram to our Trade
Commissioner in Hong Kong, pointing out that
in what Mr. Clague said and wrote to me he
was insisting that if Costains were to get the
contract their tender needed to be modified
in two respects, first as regards the percentage of the contract to be financed on credit, and
second as regards the sponsors guarantee, but
that this second requirement is not mentioned at
all in the letter Mr. Clague has subsequently
written to Lord Rhodes. Does this mean that the
question of the guarantee is no longer a difficulty? (Hitherto I must admit I have regarded this as the more difficult hurdle to surmount). If the guarantee is still an important obstacle I really think there might be a case for asking the Hong Kong Government to reconsider whether they could not provide it or part of it.
Sir A. Percival tells me that it is usual
practice for the Government of the country in
which an asset of this size is to be located
to offer some guarantee in respect of it. He is ready to produce if required full particulars
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