IMMEDIATE
HER/CAT A
SECRET
coby
to Mr. Stuart 10/12/73
342
346
GFPS 600
2
Ai
EM HONG KONG 086446Z
་
ALF.
SECRET
347
TO IMMEDIATE FCO TELNO 1417 OF 8 DECEMBER, 1973
-тов соу
FOLLOWING PERSONAL FOR SECRETARY OF STATE FROM THE GOVERNOR.
YOUR TELEGRAM 1257: MASS TRANSIT.
I AM NOT SURE FROM THE WORDING OF YOUR TELEGRAM HOW MUCH THE POSITION HAS BEEN EXPLAINED TO YOU, AND AM ANXIOUS YOU SHOULD NOT UNDERRATE THE MAGNITUDE AND COMPLEXITY OF THE PROBLEM.
2. IN SIMPLEST TERMS THE POSITION REACHED IS THAT HONG KONG'S LIABILITY UNDER THE ANGLO-ITALIAN COUNTER-BID WOULD BE 20 PER CENT OR MORE HIGHER THAN UNDER THE JAPANESE, THE FINANCIAL ARRANGEMENTS, CREDIT ETC WOULD BE NO BETTER AND POSSIBLY SLIGHTLY WORSE, THE LINE WOULD TAKE A YEAR LONGER TO BUILD, AND CONSTRUCTION WOULD COMMENCE LATER.
3. IN RESPONSE TO MY PLEA TO MR WALKER TO CLOSE THIS VERY BIG- FINANCIAL GAP (MY TELEGRAM 1397 OF 3 DECEMBER) NOTHING EFFECTIVE HAS RESULTED. I REALISE THE DIFFICULTIES OF SPLIT RESPONSIBILITY WITH THE ITALIAN GOVERNMENT, BUT I AM AFRAID THE FACT IS THERE HAS BEEN NO IMPROVEMENT ON THE POSITION DESCRIBED ABOVE. BUT INSTEAD IT HAS BEEN PUT TO ME THAT THE JAPANESE CAN BE COUNTED ON TO WELSH, AND THAT POLITICO/ECONOMIC CONSIDERATIONS SHOULD BE TAKEN INTO ACCOUNT. I WILL DO WHAT I CAN WITH THE FORMER, THOUGH HONG KONG'S EXPERIENCE OF LUMP SUM CONTRACTS WITH THE JAPANESE HAS BEEN GOOD. I AM OF COURSE ACUTELY CONSCIOUS OF THE LATTER BUT IT IS A BIG GAP TO BRIDGE WITH SUCH UNQUANTIFIABLE CONSIDERATIONS.
4. IN VIEW OF THE PRIME MINSTER'S DIRECTION CLEARLY SOMETHING MUST BE DONE IMMEDIATELY TO IMPROVE THE POSITION OF THE ANGLO-ITALIAN CONSORTIUM. WOULD IT NOT BE POSSIBLE FOR HMG TO UNDERWRITE FOR THE CONSORTIUM, THE RISK ABOVE A CEILING PRICE OF HONG KONG DOLLARS
SECRET
/ 5,000 M.?
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