CONFIDENTIAL
Covering SECRET
HACK 170/2
R.
&
B
DI
ام
Mr Murray PS/PUS
HONG KONG:
1.
30
MASS TRANSIT RAILWAY
IND
No
In his telegram No 150 of 22 January to the PUS, the
Governor of Hong Kong sought FCO support for the Departments of Trade and Industry in their efforts to help Metro-Cammell (Metcam) to match a cut-throat Japanese bid for a contract to supply rolling stock for the second phase of Hong Kong's new underground railway, the Mass Transit Railway (MTR). My submission of 24 January to the Private Secretary recommended that the Secretary of State should give his support if it became necessary.
2.
In the event, there was no need to involve Ministers other than those directly concerned. The Treasury agreed to some very unorthodox financial arrangements (worked out by DOT, DOI, ECGD and Lazards, acting as Metcam's financial advisers) which effectively enabled Metcam to match the Japanese price. The arrangements were described in the DOT's telegram No CREDA 19 to the Senior British Trade Commissioner in Hong Kong. There are still some loose ends to be tied up and the final decision will not be announced until
5 February. But the Chairman of the MTR Corporation has told Mr March that he is confident he can accept the British offer (BTC telegram No CREDA 39 of 25 January).
3.
The PUS may wish to send a reply to the Governor on the lines of the attached draft telegram.
29 January 1979
R JT McLaren
Hong Kong and General Department
斯
CONFIDENTIAL
Covering SECRET