HKK 6/548/3
CONFIDENTIAL
Hong Kong Department
24
31 January, 1969
24/€
кий 312
I am writing this letter in some haste to catch the weekly bag: Bunny Carter is away for the day.
2.
I think the best way of keeping you up to date with developments over the Tunnel would be to send you a copy of a note I have prepared only today on developments so far as they are known to us in FCO. I am bound to say that we do not necessarily know everything that ECGD knows and as a matter of fact we have not even seen their latest telegram to you, EXCED 19, although we understand that its contents are only a rather fuller version of our own telegram no. 80 to the Governor which we sent about the same time. It looks from your telegram EXCED 019 as though it was our telegram which prompted the Government to inform Colonel Clague. However, it was not our intention that this should happen: in fact we anticipated that the ECGD telegram would reach you first.
3.
I must say that it looks to us in FCO as though ECGD are going to have a hard time preventing the tunnel company from playing the French off against us and vice versa. Indeed, as you will see we have suggested in the Note, it may well be that Colonel Clague's reference to covering the political risk without insisting on supporting guarantees (I used the wording of your telegram) may well be the first move of this sort. In any case I think you will find it useful to have a copy of the legal opinion which was obtained last August when suggestions of the same sort were made. As our Note indicates, it seems to me very likely that this suggestion of Colonel Clague's will take us down the same blind alley in the direction of, once again, joint and several guarantees including a joint guarantee from the Hong Kong Government.
4.
I am afraid that there is still nothing to add at this end on the subject of the Kai Tak loan, the application still not having gone to the Treasury, but the position being as before one about which we feel no great optimism. We had
M. P. V. Hannam, Esq.,
United Kingdom Trade Commissioner,
HONG KONG.
CONFIDENTIAL
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