Our reference: Your reference:
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CONFIDENTIAL
BRITISH TRADE COMMISSION IN HONG KONG 7th Floor, Shell House, Queen's Road, Central, HONG KONG Mail Address: P.O. Box No. 528, Hong Kong Cable Address: "Uktrade Hongkong"
Telephone: 230176 i
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11 March, 1968
104/E
Dear Ker,
Hong Kong Tunnel
May I refer once more to your SL/CW 24126/35 about the proposed Hong Kong Cross Harbour Tunnel?
As foreshadowed in my letter to you of 6 March, The Tunnel Company have now sent me a Memorandum setting out their view of the present position. I attach copies of this Memorandum to each of the recipients of this letter. It differs in certain details from the unofficial letter I sent you on 6 March, but no doubt the Memorandum should be taken as correctly representing the Cross Harbour Tunnel Company's views.
3. I am afraid I cannot comment very helpfully as my papers do not show exactly what position was reached between you and Costains and the Tunnel Company a year ago when we passed from the commercial to the political phases of this project. I am unable to say whether the Hong Kong Government would subscribe to paragraph 4 (e) of the Memorandum and would be willing in the present circum- stances to guarantee repayments in proportion to their equity holding. You will note that this particular section refers to causes "other than political". All the political risks are apparently to be covered by paragraph 4 (f) of the Memorandum, which would apparently leave you uncovered during the construction period.
4. It appears from the Memorandum that the Company still expect you to underwrite 75% of an open-ended contract cost. When I discussed this point with Clague and Vine and also when I discussed it on another occasion with Rooney of Costains, I was told that the Tunnel as specified and tendered is a first-class job. Considerable contingencies have been built in and economies could be realised by doing away with the terminal building and omitting the high cost tiles in the lining of the tunnel. Vine also mentioned to me that once work on the Tunnel started he would not anticipate any difficulty in raising additional funds from the public.
5. I have acknowledged the Memorandum to the Cross Harbour Tunnel Co. but have not commented further.
6. I am copying this letter to Wild in E.C.G.D. and to John Gowers in C.R.E. Department of the Board of Trade.
K. Cotterill Esq.
yours ever, Michae
Michae &
(M.P.V. Hannam)
Principal Trade Commissioner
NOTE-NO RESPONSIBILITY IS ACCEPTED WITH REGARD TO THE FINANCIAL STANDING OF COMPANIES, FIRMS OR INDIVIDUALS MENTIONED
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CONFIDENTIAL
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