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Mr. Carter
We and reproter this.
CONFIDENTIAL
13/3
Av i lost Plae speak on this
HWA 21/2
1373
10 March, 1967
Cross-Harbour Tunnel: Hong Kong
When I was in Hong Kong at the beginning of this week I was aperosched by the Hon. 2. Clague who has been opening the tenders for the proposed cross harbour tun..el. ile told me that Costains stood a good chance of getting this £13 m. contract if the terms of their offer could be improved in certain respecte. Eventually he let me jave u nole about the position on a strictly confluenti 1 basis and I enclose
a copy of it.
24
After telain to Cotterill, i saw last night soade, the man dealing with the mat.er i. Coelaine, ahu gave him the gist of the two luprovements in the Costains' offer which Clague was seeking, viz., first that the credit offer shuule cover 70 per cent of the contract price and should run for 72 years from the completion of construction, and second that the requirement should be withuram 101 a joint and several guarantee of all payments by the two flus 1.0 arc the major participante in the fross Harbour Tunnel Company Sta.
Sowden's views were as follows:-
(a) He thinks that Clague's request that the creuit term
should cover as much 58 75 per cent of the contract price la in the nature of a bazaar-haggle and that it ought to be possible to set le a percentage somewhere between 75 per cent and Contain's present oiler, which is I gather 62 per cent.
(b)
Sorden thought that ii (a) were settled in this way, it might be ocsirable to have one year's Lelay before
repayment of principal but not interest starts.
(c) Sowden agrees with Clague that, in order to clinch this
contract, it will be essentiel to have some mouiiication of the tenuirment for a joint and several puarantee of all payments by the two major priti ipants in the Tunnel Company. For one thing this Company will have to unload
Sir Anthony Percival, C...
Ex_ort Credits Guarantee Lepartment
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