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purposes, including a grant of about £50,000 to Hong Kong in 1950. It was clear from the
discussions that a contribution of this nature
would be regarded as helpful in all the
circumstances.
7.
Finally, Moreton asked Cowperthwaite what
he would regard as a fair contribution to the
project from HMG given our present economic
circumstances and as a visible demonstration
of our self-interest. Cowperthwaite replied that waiving the outstanding repayments of the existing loan for Kai Tak (£1.4 million now
outstands with a further repayment of £200,000 due on 1 October) would be so regarded.
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 :-
9.
(i) Remission of the outstanding balance
of the 1959 loan;
(ii) 50% grant from C.D. & W. funds
(iii)
towards the cost of the air traffic
control system; and, if possible,
a statement by ECGD that cover would be available for any part of the
contract awarded to British firms.
I am taking up (ii) and (iii) with the ODM and ECGD respectively and will send you
copies of my letters to them. I would be most grateful if you would give early consideration to (i); in view of Cowperthwaite's remarks it must be regarded, I think, as the lynch-pin in any acceptable
solution.
10. I am sending copy of this letter to Coe (Board of Trade) and Lucas (Treasury).