CONFIDENTIAL
c.c. R.H.J.STEEL (Tsy)
C.C.Lucas
W.J.Coe (B/T)
"
W.S.Carter (FCO) ✓
OUR REF: OPG.142/G
30th May, 1969.
31
22
26)
Hong Kong: Kai Tak Airport
I was a little surprised
certainly disappointed
that in your reply of the 22nd May to Moreton's letter of the 16th May, you were unable to be somewhat more forthcoming about the length of credit which could surely apply to this business.
Although you have said "there might be a care for considering 7 year terms", your proposed line with the Hong Kong Government rests entirely on 5 years credit from shipment if goods are ordered piecemeal, or 5 years from completion of each phase if British contractors win the entire project or separate phases. I am puzzled by the seeming lack of logic or consistency in this. If goods ordered piecemeal in whatever quantity, however small individually or short in total of the whole business, can command 5 years credit, why should an order for the total business not command more than 5 years credit outright? The only difference between your two sets of terms is the difference between 5 years from shipment of goods ordered piecemeal and 5 years from completion if British firms pull off the whole job or a major part of it. This seems to me to give such little recognition to the arguably proper terms for a project as almost to induce the customer to place business piecemeal with a number of countries instead of placing it all here.
is
The potential British export content of the entire project, as far as our Civil Aviation people assess it, well over £6 m. The minimum figure for credit exceeding 5 years under Financial Guarantees is £2 ¤. Why, therefore, should the business not qualify in principle for credit of 7 or 8 years from completion? I do not see what the make-up of the goods and their respective values have to do with it. Any major capital scheme is made up in the ultimate analysis of nuts and bolts and so on. This is, after all, an identifiable project which can arguably be handled most coherently as a whole, quite apart from the maximisation of benefit to us if we can pull it all off. To offer no more than 5 years credit however the business is placed suggests that we are indifferent whether we get all of it or simply a few bits and pieces.
J.GILL, ESQ.,
EXPORT CREDITS GUARANTEE DEPT,
BARKINGTON HOUSE,
59-67 GRESHAM STREET,
/I think
E.C.2.
CONFIDENTIAL