FG 600/35/2
Record of Meeting
Present:
Date:
HONG KONG
Underground Railway Project
Mr Wilks
Mr Paxman
Mr Stephens
Mr C Deacon Mr Crabtree
Mr Forsyth Mr Stallard
Mr Molyneaux
ECGD
Rothschilds
GEC
Costains
Wednesday, 10th March 1971
19
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Mr Deacon explained that Rothschilds had been approached by the Export Group for the Construction Industry to act as financial observers to the steering committee of GEC and Costains which had been set up to watch developments on the proposed Hong Kong Mass Transit System. Rothschilds represented both GBC and Costains (who were acting on behalf of interested mechanical and electrical engineering parties and interested construction companies respectively).
2. Mr Deacon said that Mr Shepherd of the Hong Kong Transport Department had suggested that, in the present situation where the Hong Kong Authorities were undecided, it would be a good idea if a document could be sent to him setting out a financial package for the scheme. However, he (Mr Shepard) had not asked for a formal detailed financial offer. A Government decision had been postponed on several occasions, but now looked likely to be taken in May.
3. Mr Paxman pointed out that a number of Hong Kong Government decisions were required, e.g. on whether to proceed with the scheme at all and, if so, on what basis. Mr Forsyth said that only the Initial Schame was being seriously considered, but with escalation this could have a value of £190 million. Mr Stallard said · that any contract would certainly not be a fixed price one, although he appreciated that any ECGD Guarantee for a UK loan would have to have a pre-determined upper. limit.
4. Mr Wilks made it clear that he could only speak in general terms. No firm advice had yet been taken from Whitehall Departments or from the Advisory Council. The Department would be willing to help to swing the contract to the UK, but much would depend on the ultimate size of the contract. If the terms were sensible, then he was reasonably optimistic that cover for business of, say, £100 million might be acceptable. However, the involvement of the Hong Kong Government was crucial and would be the cornerstone of any support the Department might give. The Department would not want to see the nonsenses of the Tunnel repeated. And as general rule, underground railways, unlike tunnels, were not self-financing. Mr Paxman said that the Department would expect the Hong Kong Government to act as borrower or guarantor.
15.