CONFIDENTIAL
w/316
DRAFT MINUTE TO PRIME MINISTER FROM SIR GEOFFREY HOWE
cc Secretary of State for Foreign & Commonwealth Affairs
Chancellor of the Exchequer
HONG KONG MASS TRANSIT
You will have seen from Mir Walker's minute to you of
that we are making a major effort to back
up the Anglo-Italian consortium's bid to stay in the
competition for the contract to build a mass transit
system in Hong Kong. By all normal standards of
Government support for overseas trade we are already
therefore doing everything that we can do. In the light
of your minute to Mr Walker of 26 November, however, we
have asked ourselves whether in extremis there is
anything more the Government can do.
The time-table is tight. The Governor in Hong Kong
advises that of all the requirements which bidders need
to meet at this stage of the competition the least
flexible is that final proposals be in by 2 December.
If we wanted before then to do anything more, there are
only two technically possible courses: a direct order
to the Government of Hong Kong to keep the Anglo-Italian
consortium in the competition or a grant of financial
backing to the Anglo-Italian consortium which would
cover them against loss in addition to assuring credit.
The objections to either course are such, however, that
I cannot recommend them.
An unwelcome order would adversely affect relations with
the Hong Kong Government over a wide field. To the extent
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