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HONG KONG MATS RANCIT
Who mosse from the Governo to Sir Alec Douglas-ome in Hong Kong tolerren do 200 No 1417 (doc 20) alko i to w rembes by 0900 hour Long Hong time on 11 December that the cost to ong Kong of buildia: the fire four stages of the underground veilmay, if this is under taken by the Anglo-Italion Consortius, shall not overoll cxceed Hong Kong / 5,000 million (say $416 i don). On the fi, une for the all- UK price of Hong Kong C,121 milion in the Covernor'a tologram To 1307 (doc 22), the tobul rick to be carried over such time as construction rune would be of the order of Hong Hon 1,121 milliım (pay 301 4llion). Of this sum 40, cay 136 milion, would relate to the UK firmat share of the contract. The 18 the worst case and it is vine to Coolde polloy on thir basic; there is, of course, always a possibility that detailed nego ation will throw up scne lover price. the Governor suggests that thic quarantce could keep the Anglo-Italian Consortium in at this store and could be dropped at the sick of clininting the consortium 12 this should later prove necessary, He has sinae telephoned to withdraw the suggestion that the quarentee, once given, could in some circumstances, be dropped.
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It would be possible to provido a quarentee for the UK component under sectich2 of the xport Credite Cuarentee Act.
I have consulted officials at the recary, 1000 and 700. le do not recommend that a norentoe of thi. ki which would be in offcct open-caded, should be given. As an in.ication of the size of such a colunitment in relation to other liabilities, MO million jo just about the gum which is now owing to the oloaring banks unčez the schone for cheap canTTED CON over n peliod of 10 months.
The UK Covament have no goods.
over to give a quarantee for I lion
The political and coumo de alvator, os of X finne scouring this busincco não cubstantiel. It would enhance UK standing in Jone it would counter the dayenccc in a prestigious competition, it woul cccuze outobantial unonte for the Ut, and ectablish on in ontent reference Co: UK firms in the likely cvent thas a nu:ber of othe7 cities will in the next decade need nach umiexgsound railways, og
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