Mr. Carter
CONFIDENTIAL
18
Kai Tak Airport
When you and I called on Mr. Dickinson of ECGD this
morning we were sympathetically received. After I had outlined the state of play and our current thinking Mr. Dickinson immediately made it clear that he was not prejudiced by the recent tunnel negotiations and that there would be no difficulty about a guarantee for the project. It was being undertaken by the Hong Kong Government alone and he was not worried about the risks.
2.
Mr. Dickinson thought that in principle the scheme should be eligible for project credit. This would give cover for the whole contract but no credit terms for the non-UK element. There might be difficulties with the Treasury about the proportion of local costs but he was prepared to be tough with them. The Treasury also normally insisted that local costs should be paid during the completion of the work. There were plenty of precedents for construction projects such as dams and runways. be of the order of sixty per cent and for a runway it might be forty per cent. If however the other improvements to the airport were included the percentage of export content should be higher than forty per cent. He advised that we should assess the export content for the whole £13.7 million scheme when they would be very ready to look at the proposal in greater detail.
3.
In the case of dams the export content might
On terms, Mr. Dickinson spoke of project credit at 6 per cent repayable within 5 years from the end of the construction period, or possibly buyer credit over a total period of 8 to 10 years.
4.
Mr. Dickinson suggested that we should get in touch with Mr. Ken Taylor of the Board of Trade Overseas Projects Group.
5.
I understand that as a next step you will now be seeking an assessment with the Board of Trade of the export content of the whole scheme.
Copies: Sir A. Snelling
Sir A. Galsworthy
Mr. Gallagher
Miss Brown
OBrien CONFIDENTIAL
Tokorel
(J. 0. Moreton)
29 April 1969