CONFIDENTIAL

British Trade Commission in Hong Kong

9th Floor Gammon House 12 Harcourt Road Hong Kong

Mail Address PO Box No 528 Hong Kong

Telex HX 73031

Cable Address Uktrade Hong Kong Telephone 5-230176

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"Jeels

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J.A.B. Stewart, Esq.,

Hong Kong & General Department,

F.C.O.

.com Jolm,

HONG KONG AND E.C.G.D.

LASI

177

R

Your reference

Our reference

ECO 173/1

Date 11 August, 1977

RECOVER IN

REGI

BY P. 51

16 AUG 1977

HKK 164/1

Thank you for your letter of 4 August about ECGD's attitudes towards credits for the Mass Transit Railway.

I am most grateful for the background which you have provided and I have now been able to have a detailed discussion of the issues with Charles Birch who has been in Hong Kong for discussions about the financial arrangements for the power station project.

2+

3.

I have never sought to argue that we could not ask the Hong Kong Government to gurantee loans to the MTR for the second phase of the project (as you point out they guaranteed the first phase). My concern was that in presenting the reasons for this requirement, ECGD should not say anything which could be misinterpreted in this highly volatile and rumour filled market as indicating official doubts about the future of the Colony. In other words, it is the explanation of our policy rather than the policy itself which will be important.

4.

Charles Birch's visit has been invaluable as it has enabled him to see for himself the background against which we shall be corresponding on major projects in Hong Kong. He kindly agreed to say on for an extra day in order to meet Norman Thompson and his Financial Adviser and to have a short tour of the current project. Inote that the MTR found his advise of great value and I am most grateful to ECGD for arranging the visit.

c.c.

C.W. Roberts, Esq., CRE 4, DOT.

Mr. Rumble, TRED, FCO.

Versever

Such.

D. M. March

Câpied

Сер

НКК

to

173/1

CONFIDENTIAL

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