APS/PUS
#. CONFIDENTIAL
10 MAY 1977
HKKai/i HKK 121/548/8.
du Dana to fee
PIA
11.15 am
P.A
A feel 1315.
HONG KONG: CALL BY MR DAVID NEWBIGGING, CHAIRMAN OF JARDINE MATHESON, ON THE PUS
1. You asked for a brief for the PUS's meeting with Mr Newbigging Flag A at 11.15 a.m. tomorrow, Friday 13 May. (My submission of 9 May
1 refers.)
Flag
2. The Department of Industry have taken the lead in this week's discussions with Mr Newbigging's delegation of Hong Kong ship owners.
attach a copy of their background note for the meetings that
r Kaufman, Sir Peter Carey and others had with the delegation on 9 May. The main proposal which the delegation have put forward is that, in return for placing orders in UK shipyards, Hong Kong ship owners should receive a charter income, guaranteed by HMG, which would cover the costs of financing the ships. The Hong Kong ship owners have it in mind to place charters with public sector bodies, such as British Steel, or, in the case of some owners, to make straight-forward purchases of ships. The points that the DOI have made to the Hong Kong ship owners include the following:
(a) that British Shipbuilders, the public corporation which will take over the running of the shipbuilding industry on 1 July, will have responsibility for negotiating the commercial details of the type of arrangement which the Hong Kong owners
have in mind;
(b) that HMG have recently announced the establishment of a £65 million Intervention Fund to enable the shipbuilding industry to secure additional orders. (There will be more claims on this fund than can be met and it will have to be used in conformity with our international obligations);
(c) that the Hong Kong ship owners' proposals offer a useful basis for discussion but that British Shipbuilders and HMG will need to examine the financial details before deciding whether it will be possible to come to an arrangement on the lines envisaged;
CONFIDENTIAL
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