CONFIDENTIAL
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7. E.C.G.D. will require to bo satisfied as to the torms of the loan
agrooment and the supply contract. This is implicit in H.M.G's undertaking
to share in the guarantee on a commercial contract otherwise acceptable to
E.C.G.D. The points mainly concorn the adequacy of provisions for termination
of contract, arbitration in case of dispute, adequate definition of
rosponsibilitics and amounts involved, and the interlocking or compatibility
of the two contracts.
8.
Additionally, H.M.G. will wish to be satisfied that the torms are not
so oncrcus to the supplier as to be incapablo of fulfilment or which could only bo fulfilled at considerable hardship. As guarantors H.M.G. and the
Government of Hong Kong have the samo interest in this regard noither wish to force the contractor into bankruptcy during construction. As shareholders tho Hong Kong Government hovo slightly different interests and H.M.G. hope
that in the former capacity the Government of Hong Kong will use their
influenco with the shareholders to secure reasonable torms.
CONFIDENTIAL