Registry No.

DEPARTMENT

HKK 21/4

HONG KONG

SECURITY CLASSIFICATION

PRIORITY MARKINGS

(Date)

27/

* Date and time (G.M.T.) telegram should

reach addressec(s)...

Top Secret

Secret

Confidential

Restrict

Unclassified

Flash

*

Immediate

Despatched

Priority Routine

HER

GOVERNØR HONG KONG

(date)

XX

NOTHING TO BE WRITTEN IN THIS MARGIN

PRIVACY MARKING

In Confidence

En Clair. Code Cypher

Draft Telegram fo :-

Lou Hong Rung

No.

(Date)

And to:

27/2

[Secan

"Security classification -if any

CONFIDENT IAL

[

Privacy marking -if any

[Codeword-if any]

Addressed to

telegram No....

And to

repeated for information to

27/2

KVE

Repeat to:-

Saving to:----

Distribution:-

As for H.K. telegram No. 19

Copies to:-

Saving ..............

Personal for Governor from Lord Shepherd.

Cross Harbour Tunnel.

Since your telegram No. 19 I have been watching developments with close interest. I entirely share

your view that, if the project is to go ahead, it

would be singularly unfortunate if the contract were to be lost to Britain. I am sure you will have

welcomed the recent easement in ECGD's terms.

Unfortunately we cannot yet be sure that even these modified terms will suffice to secure the project for

Britain, in the absence of any firm knowledge of what the final offers of those competing for the project

may be.

2.

As I read the papers, it seems to me that a

crucial and determining factor may well be the attitude of the Hong Kong and Shanghai Bank over the question of giving a several guarantee in any form. I realise that the Hong Kong Government is an interested party as a potential shareholder (incidentally, we much appreciate your willingness to recommend acceptance of a several guarantee to your Executive and Legislative Councillors). But I

think

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