Harbour Tunnel project, finance will be required.
As you know, for the Tunnel project, Lloyds Bank
provided a loan of £143 million at 51% repayable
over 7 years and this was guaranteed by ECGD
with counter-guarantees from the Tunnel Company
If it is possible to provide
shareholders.
finance for the underground railway on roughly
a similar basis, this can be expected to go a
long way towards matching the financial terms
which the Japanese could offer.
5. The political situation in Hong Kong is
quiet and stable. There is no reason to
anticipate any change in the current situation
and, as mentioned in paragraph 2 above, the
political risk in Hong Kong is less than in
almost any South East Asian country. The lease of the New Territories has a further 261⁄2 years
to run and, even if cover for a maximum of 20
years is required, there is no reason apparent
why this should not be acceptable, especially if
it is counter-covered as in the case of the
Tunnel Project.
6. The Hong Kong Government can be expected to
look very hard at the viability of the scheme and,
if they decide to go ahead with it, this will be
because they are convinced that it is not only
essential but also viable and a commercially
acceptable proposition. Their policy however is to buy the best article in the cheaper market and
it is unlikely that they would be influenced to
place the contract with a British firm merely
because it was British unless other terms,
conditions and prices were acceptable.
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