for
HR.
2
FINANCIAL TIMES
cutting dated
A 2 DEC 1971
19
HKK 21/4
나
356
H.K.
Japan in talks on £416m.
Hong Kong underground
BY OUR OWN CORRESPONDENT
HONG KONG, Dec. 11.
THE JAPANESE ARE likely to Cave, the representative of the reached on strictly economic build a huge underground rail- largest single holder of Britain's grounds. they have refused way project in the British colony gold and dollar reserves, was to stretch matters to allow of Hong Kong.
seated three rows back in the British interests to undertake a This was decided to-day when U.K. delegation.
prestige project in a British the Hong Kong Government The failure to obtain satisfac- colony. announced it was ready to enter tion in its quest for some British companies have hither- into negotiations with a Japanese basic protection for its London to been to the fore in the con- consortium represented locally reserves undoubtedly triggered struction of Hong Kong's public by the oldest British Hong Kong off resentment within the colony's buildings, and civil engineering firm, Jardine Mathieson and Co. Government and banking estab- projects such 2$ the cross- The news came as a shock to a lishments. This helped create a harbour tunnel. Sir Douglas colony which has always given mood of independence which to Clague of Hutchison Inter- Eritain special notion treat day's decision reflects.
national played a vital part in the financing of the tunnel. ment," favouring British goods,
Hong Kong Government officials
writing in advantages to British point out that to-day's decision The Japanese consortium,
equipment purchased by local was taken on purely economic
mass
public utilities operating under grounds. They have always laid which Jardines represent, is will great stress that the contract ing to guarantee that the cost Government franchises and charging 50 per cent. less tax price for the construction and of the first four stages of the on British
equipment of the first four stages project, which will take five cars than 00
of the
transit
to construct will not railway years "foreign" makes.
system should be limited to exceed $HK5,000m. This decision must be seen $IIK5,000m. (about £416m.).
A representative of one of the against the recent discontent in This was the maximum sum defeated consortia commented Hong Kong, particularly as a the underground railway could to-night that the Hong Kong result of the dilatoriness of the afford, considering the extended Governmen will have some hard Treasury in offering Hong Kong period over which the debt is bargaining and drafting to do to a new deal guaranteeing its huge to be repaid and the resulting sew up this vital aspect of the London-held reserves at present heavy interest burden, they said deal. The Government also com- against further sterling devalua- The Japanese consortium's bid mented that whether Or not tions or, alternatively, to allow was the only one which accepted the negotiations will succeed Hong Kong 10 diversify its this limitation.
depends upon the Japanese con- reserves.
The other two leading con- sortium's ability to conform to
It is felt locally that Britain sortia were 2 largely British Hong Kong's detailed require- treated Hong Kong's repeated group (which had co-opted ments. requests for a renewed agree- Italian companies to deal witn However, it is thought locally į ment-the last guarantee lapsed civil engineering) represented that should the oil crisis lead to in September-with studied off by Hutchison International and unemployment and falling wages, handedness. There was also anger an Anglo-French-German con- the Japanese consortium should at the treatment afforded to sortium, represented by Hong have little difficulty in keeping Hong Kong's Financial Secretary, Kong Metro Constructors.
within the limits they have set Mr. Philip Haddon-Cave, at the While Hong Kong Government themselves, and for which they World Bank meeting in Nairobi negotiators seem sincere in their have supplied both financing and carlier this year. Mr. Haddon- claims that today's decision was export credit guarantees.