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CYPHER/CAT A
PRIORITY HONG KONG.
TELEGRAM NUMBER 127
CONFIDENTIAL
TOP COPY
н
TO FOREIGN AND COMMONWEALTH OFFICE
8 FEBRUARY 1969
CONFIDENTIAL, TELEGRAM 127 OF 8 FEBRUARY.-
YOUR TELEGRAM 99: CROSS-HARBOUR TUNNEL.
IT IS DIFFICULT TO BE CONCLUSIVE IN THE ABSENCE OF ANY DETAILED INFORMATION ABOUT THE 'PROCEDURAL ARRANGEMENTS TO SECURE CREDITOR'S ACCESS TO PROCEEDS OF THE OPERATION OF THE TUNNEL' REFERRED TO IN YOUR TELEGRAM 80, AND IN VIEW OF THE NEED BOTH TO CONSULT EXECUTIVE COUNCIL AND TO SECURE THE AGREEMENT OF LEGISLATIVE COUNCIL BOTH TO THE TAKING UP OF OUR SHARE OPTION AND AN EXTENSION OF TIME FOR COMPLETION OF TUNNEL. ASSUMING THE PROPOSED PROCEDURAL ARRANGEMENTS ARE ACCEPTABLE, I WOULD BE PREPARED TO PROPOSE TO BOTH COUNCILS THAT GOVERNMENT TAKE UP THE SHARE OPTION ON THE BASIS OF INDIVIDUAL GUARANTEES TO ECGD IN PROPORTION TO
EQUITY.
2. THERE IS ONE OTHER POINT OF IMPORTANCE, HOWEVER, WHICH MAY REMAIN AN OBSTACLE TO ACCEPTANCE BY COMMERCIAL INTERESTS OF THE INDIVIDUAL GUARANTEE PROPOSAL, THAT OF TOTAL POLITICAL RISK. IT IS UNDERSTOOD THAT IN APRIL 1967 THE PROPOSAL FOR SHAREHOLDERS' SEVERAL GUARANTEES DID NOT EXTEND TO THIS. AT THE REQUEST OF THE COMPANY HANNAN ENQUIRED ABOUT THE PRESENT PROPOSAL IN RESPECT OF THIS AND RECEIVED- THE FOLLOWING REPLY FROM ECGD, SEVERAL GUARANTEES WOULD CONTINUE TO BE INVOKED WHATEVER THE CAUSE SO LONG AS GUARANTORS OR THE TUNNEL
11 FEB 13569
HKK 21/4
COMPANY
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CONFIDENTIAL
RIF
NEX
RCF.
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