Me Kelley
te maximum terms of 10 years the feature is lost on competitors are offering 10 years without specifying aggregate valuzo and without apparently specifying a n'mum value for inlividual o ders. A difficulty for W and the MTA arises in the early stages of placing contracts when neither the ITA or UK companies vill
the basis of the repayment period applicable to their contract at the tin such contract is in negotiation. Only if the MTA is confident placing orders in the UK to the highest minime valve would there by any certai ty that the 10 years ters which are being supported by other crelit insurers will be available to them, It was for this reason that John Elliott yesterday surgoste that Treasury might be egrecable to reduce the £25m requirement as the minimum aggregate contract value to qualify for 10 years terms. This would not have removed the disadvantage complet-1 nd we think the point should now be recognised that unless scac Lodification of our current requirement is removed or modified then this disadvantage will emai
7 It -eems therefore that we should #1) recoʻnisg the derizer of maintaining this rartisular requirement especially in the light of the evidence of the other crit figurers attitudes, Té UK industry is to be given an opportunity to compete for these contracts we must expect this requirement to influence the decisions & the Mant Transit Authority who right be more disposed to place the early contracts with countri s where 10 years credit is certain than to place contracts in the UK where the availabil' ty of 30 years credit will not be established until later contracts have been placed to a value of £25m. At this date MTA will not know where later contracts way be place^.
0 We Mink it important that we should also take note of the report to the Prime. Minister which the Secretary of State for Trade has made following his recent visit to
the Far East. in the section of the report 1eferring to Hong Kong the SOS (T) wrote
"Hong Kong is a highly competitive and discriminating market, and on in which we should certainly be doing better, even allowing for our success in, for example, the supply of pover genera ing equipment and hover-feries. I also had in mind the import aes of the connection betwoch our trade flow and our political interests. It would greatly assist our political objectives in the colony if we could go some way to rev?T38 Hong Kong's growing economic links, both in terms of tende and investamit, with the United States and Japan. The Chines
certainly do not want to see Hong Kong become a on vio satellite of Ja
It is, theref^re, particularly iuportan
we should of contracts for prestige prviou like the
decurc
中
ajor shar
事
Mang Trrant achend. I am glad to say that through the efforts of my Depot ont we are well placed to compete for the latter."
ahut terms
9 A this point might be one where our position is not easily defensible I have therefore set those factors out so that you and others to whom I have copied are aware of the situation. If there is to be any change of view then I would like to kuor by Wednesday latest.
Yours sincerely
G Leon