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Govement know by next week whether we can offer terms
similar to those of our competitors.
In my view it is vital that we should succeed here. It
would be highly damaging to our business reputation
throughout the world not to secure this major project in
one of our dependent territories. The project is also of
great importance in its own right since the value of
British exports and services would total £250-£300m.
Even more important, however, is the need to establish UK
industry in the enormous market for urban rapid transit
business throughout the world. We badly need a break-
through into this business and, if we cannot succeed in
Hong Kong, we shall be most unlikely to get a foothold in
this field elsewhere.
I have seen calculations which the Bank of England have
made which suggest that the degree of subsidy which would
be involved in our proposals would be some 36% or some
£60m. These calculations are, however, theoretical and
rest on assumptions which are very debatable. Certainly
there will be a substantial element of subsidy here. But
we need to decide now whether we want this contract or
not. If we do, then we must be prepared to offer what our
competitors are already offering.
I am copying this letter to the Prime Minister, the other
members of the EPC and Sir Burke Trend.
Continuation Sheet No.
File No.
Form SS/29A
DO NOT TYPE ON REVERSE USE FURTHER CONTINUATION SHEET
9673 D.216655 20M 10/72 T.P. Gp.658
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