署
DEPARTMENT OF TRADE AND INDUSTRY
XXXXXXXXXXXXXX
女
01-222-7877
Ext 2240
R Jones Esq
Finance Overseas Division
HM Treasury
London SW1
19 January 1971
(26) Prov
HONG KONG UNDERGROUND RAILWAY
Please refer to my letter of 25 December 1970.
STC has just reported an official announcement to the effect that the Transport Advisory Committee in Hong Kong has recommended to the Government that the Mass Transit System as proposed by the consultants is both necessary and adequate for Hong Kong's future transport needs. It is noted that this recommendation is made only from the transport and traffic point of view and that there are other considerations such as the high cost and other claims on financial resources to be taken into account.
However the clearance of the TAC hurdle will attract public notice and we may expect to be asked for advice on whether the time has come for industry to organise another mission. I think while such a mission would demonstrate the UK's interest in winning the business it is hard to see what it could achieve in practical terms just at the moment unless it can put forward an attractive financing plan in the knowledge that finance is now going to play a critical part in the Government's decision whether or not to go ahead.
The STC indicates that as public opinion and the Press have come out strongly in favour of the scheme those who oppose it on the grounds that it is too expensive in relation to the potential benefits may find their hands forced. He thinks a decision in principle by the Government might possibly be taken as early as March though it would be impracticable to have the financial details finalised by then. The Transport Commissioner told him that if the Japanese want the contract they would have massive government assistance and if British firms were going to do this job they would likewise have to be supported by HMG.
W?n
If there is any prospect of a political initiative which would aim to demonstrate HG's active interest (it is generally agreed I think that to try and bring pressure would be counter-productive) the timing of such an initiative begins to assume importance. So also does the timing and content of any indication we may be prepared to give about the nature and extent of the financial facilities which would be available in the UK in this case.
Vand
I am copying to Laird and Willson (FCO), Rawlings (ECGD), Blackwell (Hong Kong) and Robins and Watson (DTI).
A F Toms