NOTHING TO BE WRITTEN IN THIS MARGIN
W(B)L 51-7406
Figures in brackets
to be confirmed_7
the
improved air traffic control system (see paragraph 3(v) of our memorandum); amount involved is about £(380,000), i.e.
50% of the estimated total cost of about £(560,000). There are precedents for the use of C.D. & W. funds for such purposes, including a grant of about £50,000 to Hong
Kong in 1950. The tenor of the discussions
indicated that a contribution of this nature, added to remission of the outstanding loan, would probably be regarded in Hong Kong as adequate recognition of British interest in the project.
8.
It seems to us that we now have the possible ingredients of a satisfactory package deal and our Minister (Lord Shepherd) has instructed that I should press ahead on the following basis :-
(i) Remissi on of the outstanding balance
of the 1959 loan;
(ii) 50% grant from C.D. & W. funds
towards the cost of the air traffic
control system; and, if possible,
(iii)
a statement by ECGD that cover would be available for any part of the
contract awarded to British firms.
I should
9. In view of Cowperthwaite's remarks, the first of these elements (remission of the 1959 loan) must be regarded, I think, as the linch-pin in any acceptable solution.
be grateful if you could give it early consideration. I am advised that repayments are paid into the Consolidated Fund and are
not shown as appropriations-in-aid of votes.
10. On the second element (the C.D. & W. 50% grant) I shall be writing separately to the Ministry of Overseas Development when Hong Kong's applications are complete (we still await one of them). The equipment involved (costing in excess of £206,000) would be purchased by Cable & Wireless on the Hong Kong Government's behalf and paid for in one lump
sum capital redemption payment, ownership being
formally vested in the Hong Kong Government.
/ After