Mr

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Sir D Watson Wayson

PS/Mr Royle

CONFIDENTIAL AND PERSONAL

Minister.

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HONG KONG: MASS TRANSIT SYSTEM

1.

The Secretary of State for Trade and Industry sent a minute

to the Prime Minister on 14 December.

Governor had let us down.

This implied that the

Mr Royle minuted the paper to the Secretary of State

through the Private Secretary (Mr Grattan's minute of 20 December).

As a result the Secretary of State asked for a list of the times

when we and the Governor had pressed the DTI to take action.

313 This was provided in my minute of 20 December.

HKK 2T+

1973.3.

Subsequently on 31 December the Secretary of State asked

for the draft of a short unprovocative minute to the Prime

Minister, summarising the recent course of events.

We can

certainly defend the Governor against the charge of doing

nothing to make known to all concerned the problems of the

situation in Hong Kong. Nor can he be blamed for the remaining

deficiencies of the Anglo/Italian bid. We may assume that he

tried to persuade ExCo to validate that bid. We do not know

what arguments he used or how hard he tried. We only know that

he failed. Given the personalities on Executive Council it may

be that no-one could have succeeded. Mr Walker's criticism is

too sweeping.

4.

I submit a draft minute which Mr Royle may wish to consider

CONFIDENTIAL AND PERSONAL

/before

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