CONFIDENTIAL
KW Cotterill Esq
Export Credits Guarantee Department
Aldermanbury House
London EC2P 2EL
Aldermanbury
Dear
Ken
Treasury Chambers Great George Street London SW1P 3AG
Telephone 01-930 1234 ext 268
9 November 1973
Des
279
PA
275
HONG KONG MASS TRANSIT SYSTEM
3 x11
You wrote to Mrs Boothroyd yesterday asking for quick approval to terms for UK participation in an Anglo-Italian bid for this business, and discussed it briefly by telephone.
2. First, it is important that Ministers should be clear whether the case for offering terms for what might be as little as £80 million of UK exports and only a part share of the prestige which would attach to a successful project of this kind is as strong as it was when terms were first approved by Ministers in September 1972. As became clear during inter-departmental exchanges earlier this year, the implied subsidy is very substantial, and requires very strong justification.
3. For this reason, Mrs Boothroyd would like to hold a meeting of officials early next week to go over this ground again and make quite sure of the strength of the arguments. In particular:-
a. Is the mass transit scheme still regarded by ECGD and DTI as viable? I participated in some correspondence during the summer in which I was concerned about the Hong Kong authorities' attitude towards the fare structure. As I understand it, without the Hong Kong Government's guarantee, UK exporters are dependent entirely on the revenues from passengers for repayment.
b. Have the would-be UK participants in the Anglo-Italian consortium (GĒC, Tarmac, Costains and Balfour-Beatty) both the capacity and intention to carry through the work? I understand that in the all UK bid which has not been proceeded with there was some doubt about the willingness of some of the partners.
CONFIDENTIAL