3. At our meeting it was clear that at least one more round of discussions with the Hong Kong Government will be needed after 19 March. I agree that it is important to ensure that the UK is not ruled out of the bidding because of an inflexible approach. At the same time, it behoves us to avoid a course which simply invites our competitors to outbid our already very generous terms in this or any subsequent round which the Hong Kong authorities might then find it in their interests to arrange.
4. Although the implied subsidy calculations in our present offer (at the top of the Cairncross range) already assume repayment terms of the kind proposed, I am reluctant to see further concessions in
However, if in the light of the generous terms already approved. your judgement it becomes essential in order to ensure that the UK remains in the running for a consortium contract, I will not object to your offering the Hong Kong authorities repayment from 1980
Such an offer would, rather than from completion of each stage.
of course, be subject to Ministerial approval on the basis described in paragraph 1.
5.
even
The question of pre-completion interest is/more difficult, and we agreed in discussion that there should be no question at this
A major stage of offering to forego any interest payments. difficulty is that we do not yet know the Japanese intentions on this matter, and I hope you will be able to clarify this quickly. If in the meantime the Hong Kong authorities raise the matter, I would have no objection to your saying that the possibility of capitalising some of the pre-completion interest could be referred
You should, however, make it crystal to Ministers for consideration. clear that there is absolutely no commitment on the part of the UK that such arrangements are not a normal part of our facilities, and that the Hong Kong authorities must not interpret such an offer as encouragement to think that a concession will be forthcoming.
Jauni
Sunchang
Remula.
لہ کمال
cc.
FW Glaves-Smith Esq Miss B M Eyles
A C Stuart Esq PHR Marshall Esq V I Chapman Esq WH Paxman Esq RE Radford Esq A L Ryan Esq
(R JONES)
) Department of Trade } and Industry
) Foreign and
Commonwealth Office
Export Credits
Guarantee Department
Overseas Development Administration
Bank of England