125
Parliamentary Office
MP
The attached Parliamentary Question by Mr. Humphrey Atkins, is for oral answer on Monday, 5 May. Mr. Atkins visited Hong Kong
in January.
2. The Question has been put down for answer by our Secretary of State because Mr. Atkins appears to think that the Hong Kong Government is directly responsible for planning the construction of the cross harbour tunnel. It is, in fact, a private project. The Hong Kong Government's involvement is confined to the grant of a franchise to the Cross Harbour Tunnel Company, Limited to construct the tunnel and to a proposed 25% shareholding in the Equity of the Company, agreed in principle but which the Colony's Legislative Council still has to approve. We have considered, as you know, whether this Question ought more properly to be answered by the President of the Board of Trade but, as you also know, the Parliamentary Unit of that Ministry declined to accept it. It should be noted, however, that if the Question leads to matters of commercial or financial detail Mr. Atkins should be referred to
the President of the Board of Trade, since the negotiations leading to the provision of finance for the project were carried out entirely under the aegis of the Export Credits Guarantee Department
of the Board of Trade. The draft answer and the Notes for Supplementaries have been agreed with the Export Credits Guarantee Department.
3.
The background to the Question is as follows. Agreement in principle was reached in April between the Cross-Harbour Tunnel Company Limitedof Hong Kong and Lloyds Bank Limited for the financing of the construction of the proposed four-lane tunnel under Hong Kong harbour linking Hong Kong Island and the city of Kowloon. Lloyds Bank have agreed to provide a loan for up to £14 million (about 75% of the contract value) repayable with 51% p.a. interest, over seven years from completion of the tunnel, estimated
to take three years. The loan is to be guaranteed unconditionally
by the Export Credits Guarantee Department.
14.