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SECRET AND PERSONAL
it was the best we could do, and that it was in the
direct interest of both governments to make the most
of it.
8. The combination of these two strands, the
substantial and the presentational, explains why we
in the FCO are concerned about the political
implications of the Dass Transit System negotiations.
You should know that the Prime Minister minuted
last week to the Secretary of State for Trade and
Industry "It is essential that we should win this
contract. May I ask you to take immediate action to
do everything possible to win it for this country
and is releasant both in Londer and
in Hong Kong. This of course cuts two ways First you can be sure
first you
J
•
that the DTI are doing everything they can to encourage
improve their bid. the Anglo-Italian consortium to get the contract.
The
credit terms are already extremely favourable and will in effect
involve a subsidy from the Treasury of about £20 million
But at the same time the DTI are most anxious not to
get involved in a repeat of the RB 211 contract.
means that they are not going to push the consortium
This
against their commercial judgment into the likelihood
a substartil
Tormous- loss.
of an
Masoratrı
9. The second consequence is, therefore, that if the
DTI once conclude that they have squeezed every possible
concession out of the consortium, they are likely to
look to us to keep the British bid alive with the Comment
the Paine Minster's instructions are in reflection that Hong Kong must at some otage take-inte the last resort aqually relevant to the British government consideration where their altimete loyalties lie
of Hong Kony.
There, is no need to go into the possible undesirable
implations
aspects of this, approach. They will be as obvious to
you as to us. My immediate concern is that if, when the
SECRET AND PERSONAL
/Prime
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(17865) Dd.145178 400m 5/73 G.W.B.Ltd. Gp.863
NOTHING TO BE WRITTEN IN THIS MARGIN