LAST
#F
CONFIDENTIAL
BRITISH OVERSEAS TRADE BOARD
DEPARTMENT OF TRADE AND INDUSTRY
1 VICTORIA STREET
LONDON SW1H OET
01-222 7877
278
277
A C Stuart Esq
280
Hong Kong & Indian Ocean Dept`
FCO
King Charles Street
London SW1
Dear Archeen
HONG KONG MASS TRANSIT SYSTEM
9 November 1973
бровел П. Roses
P/A
A
1/4
I enclose a copy of a telegram to Glaves-Smith from Tom Aston which has come to me as the new Head of Overseas Finance and Planning Division, of a suggested draft reply and of the draft letter from Clague and/or the Italian Consul-General to the Chairman of the Steering Group as amended in discussion yesterday. I am afraid you may find the draft still rather disappointing. Even the added points in the draft telegram still lack precision on price which would of course be most important in carrying the day in Hong Kong. On the other hand, I am convinced that for the moment I will get no more out of the business group. The British civil engineering firms tell me that on this kind of job the risks are 2 to 1, ie it might cost you double what you think it is going to cost you.
The Italians even believe the risks to be of this order though seem rather more confident than the British that they will be able to deal with unexpected turns. Even GEC, who recognise that success here might pave the way for success elsewhere, are clearly operating under strict instructions from the top which prevent them from going any further than we have now pushed them.
The urgency and need to ward off the Japanese if we can has, however not diminished and I very much hope that you will be ready to put forward the kind of argument we are suggesting in the draft telegram, either direct to the Governor or through Aston. How would you view the suggestion that we put Aston into play first and reserve direct communication to the Governor for later? There are of course at least 3 broad political considerations which I have not thought would weigh with the Hong Kong Government but which I have very much in mind. One is the general interest of HMG in getting a foot into this market. The second is the desirability of supporting an importat Pan-European consortium in terms of HMG's European policy and, third, a general feeling that we must keep our end up against the Japs. I stand by ready to talk and would come over happily if need be.
you
DN ROYCE