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with their suppliers shave their price by £2.4m. The Department of Industry can provide a grant to certain technical development plans of Metro Cam which could yield £1m. ECGD, by bringing forward now a proposed change in their tender to contract scheme could provide £0.6m. The gap between this and £7m is £3m.
With the Department of Transport and the Greater London Council we have examined the possibility that some of London Transport's ordering from Metro Cam could be so arranged as to assist. Metro Cam's future plans are based on assumptions close to LTA's intentions. If, however, London Transport could provide some greater flexibility to Metro Cam in the ordering of work this might prove a valuable concession but cannot be worked out in time to take into account now.
These possibilities within present policy apart, we have looked at the concept of trying to set up some form of buyer credit deal which would enable Metro Cam to enjoy the amount of support we would normally have been able to give through this scheme, a support which would be fully adequate to cover the present need. We have had to conclude that nothing can be done which is within present powers.
Secondly, we have looked at the possibility of arranging a forward market in Hong Kong dollars which would permit cover to be provided at a rate that would yield the amount we are seeking to provide. The Bank of England advise that since there is neither a wide nor a stable market in Hong Kong dollars it would not be practical to devise a tender to contract deal in this currency of the kind in question. Only were the Chancellor of the Exchequer prepared to agree to the Bank of England holding Hong Kong dollars in the exchange equalisation account could this be done.
In the light of all the foregoing I propose this evening to tell the Trade Commissioner in Hong Kong how much we have achieved and ask him to ask the Government to adopt course (b) of the three courses out- lined above.
D N ROYCE
ED
V/207 ext 5701
9 November 1978