PRIME MINISTER
CONFIDENTIAL AND PERSONAL
FLAG
Secretar, if State
Hached
B
Ithe attached is a
telegram from
3/E/i
nr Walker
to the
Эк
7
HONG KONG MASS TRANSIT
18/12.
Further to my minute of 10 December we have now heard that
the Hong Kong Government have nevertheless decided to negotiate
only with the Japanese and have announced this publicly.
It
They have thus rejected an impressive Anglo/Italian bid on
which quite exceptionally favourable credit terms were available
and which I am advised involved a highly competitive price.
They have accepted a bid which all our information suggests
involves very considerable risks, and whose main attraction
appears to have been a quite unrealistically low fixed price.
appears from my contact with the Governor that the Colony would
have been prepared to have accepted an Anglo/Italian bid only if
we and the Italian Government provided quite unprecedented price
guarantees which I and my colleagues at the Treasury and the
Foreign Office and my advisers at ECGD regarded as quite impossible
for us to offer in the present economic and currency situation.
I should add that the Governor himself had indicated to me when
I spoke to him about this project in Hong Kong at the beginning
of this year that he would use all his endeavours to ensure that
the United Kingdom bid succeeded. I find it difficult in the
light of the circumstances outlined above to feel that this
assurance has been honoured.
CONFIDENTIAL AND PERSONAL