2,7
CONFIDENTIAL
EXPORTER
3. GUARAN
RANTEE
CREDITS
DEPARTME
Ro. Stewart (90
EXPORT CREDITS GUARANTEE DEPARTMENT
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Your reference
Dean Cortfr.
(88)
P.Q.
Our reference
BC 47
10th March, 1969.
You wrote to me on the 7th March about Hannam's suggestion of an inspired in respect of the Hong Kong Tunnel. You may now have seen my letter of the same date to Stewart from which you will see that in tactical terms we see no advantage in such a move at this time.
2.
I would not comment further on your letter of 7th March were it not that in going into detail in your second paragraph about the reasons why in your view such a question would be inappropriate you seem to me to over-state the position. While I can accept that because the Hong Kong Government does not finance a scheme itself it does not follow that the scheme is not necessarily essential it is surely nevertheless the case that the lukewarmness of the Government of Hong Kong towards the tunnel has been a vital factor throughout these long drawn out discussions. Hannam may thus be not quite accurate in wishing to stress that because the Hong Kong Government has not found the scheme to be essential they have therefore given it to a private company; it would however be going too far to suggest that their view on its essentiality had not been of great significance throughout. Certainly they have never thought of undertaking to finance what is clearly a public utility project themselves.
3. You then argue that a number of public utilities in Hong Kong are in private hands and for this reason if the tunnel were similarly run by a private company it would still not be the case that E. C. G.D. should judge the question on commercial grounds with no political overtones. I would strongly support the stress in Hannam's telegram upon our attempt throughout to adjudge this proposition commercially. During 1967 it is true any solution would have been essentially political, designed as an expression of encouragement during a difficult time in the Colony. Both before and since that episode however we have attempted to assess the risks involved in this project independently of the fact that the scheme was to be undertaken in a Colony for which H.M. G. continues to accept some limited responsibility. Perhaps when you object to the use of the word "throughout" you have in mind the disturbed period during 1967. If so I could not of course object to this although my feeling would be that such doubts had a strongly semantic flavour about them.
W. S. Carter, Esq.,
LAST REF.
Hong Kong Department,
Foreign & Commonwealth Office,
NEXT
London, S.W.1.
REF.
88
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