CONFIDENTIAL
underground railway that a bid for more aid in addition to the
£900,000 already allotted would be supported by ODA and
Treasury. The decision to provide substantial aid was taken
largely on political grounds in response to the Governor's
HICKS/12(12 plea, which we considered valid, for "outward and visible signs
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of a special and beneficial relationship with the UK".
It was
agreed that selected aid could meet this need. Our hands are
now somewhat tied by the fact that well over a year since
Mr Royle announced in Hong Kong (November 1972) that HMG were
providing close on £1 million in aid to Hong Kong, we have
still not received bids for disbursement of the money and our
telegrams go unanswered.
6. It would therefore be necessary to back up any request in
respect of the ATCRS with commercial arguments. The DTI
supported by the British Trade Commission in Hong Kong however
consider there are no commercial grounds. The Trade Commission
argue; (i) that in view of Cossor Radar having been bought
already for the airport, the ATCRS to be selected must be
compatible with it and (ii) that the ATCRS must be good rather
than cheap. They reason that there is, therefore, no other
source than Britain. This probably over simplifies the case
but clearly no strong commercial arguments exist.
7. In view of this there appears to be no case which we could
put to the ODA and Treasury which would be likely to prevail in
the present economic and political circumstances.
These are
unlikely to change significantly in the foreseeable future.
I conclude therefore that we should tell Hong Kong now that we
are unable to provide the ATCRS from aid funds. If we are not
going to provide it, the Hong Kong Government will need to do
/so and it
3. CONFIDENTIAL IAL