CONFIDENTIAL COMMERCIAL IN CONFIDENCE
Original at: HKKIGH!
RR HONG KONG
This Copy for:
GRS337
CONFIDENTIAL
Information only / Action on Para(s)
COMMERCIAL IN CONFIDENCE
FM FCO 261550Z SEP 80
HKK 172
RECEIVED
29 SEP 080
DESK O
INDEX
No
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TO ROUTINE HONG KONG
TELEGRAM NUMBER 844 OF 26 SEPTEMBER
FOR JEAFFRESON FROM CLIFT.
YOUR TELNO 1214: ECGD GUARANTEES.
ECGD'S
See (25
1. WE HAVE BEEN IN TOUCH WITH ECGD ON BOTH CONTRACTS.
CONCERNS ARE OF COURSE DIFFERENT IN EACH CASE. OVER BUSES, THEY ARE WORRIED OVER THE COMPANY'S FINANCIAL BASE RELATIVE TO THE
SIZE OF THE ORDER. ON CASTLE PEAK 'B' THE DIFFICULTY IS THE LONG
PERIOD OF THE CONTRACT AND THE RISK OF A REDUCTION IN ELECTRICTY
DEMAND, TOGETHER WITH THE GROWTH OF ECGD'S COMMITMENT IN HONG
KONG.
2. MARCH, WHO IS IN LONDON, HAS UNDERLINED YOUR CONCERN ON BUSES
TO ECGD, STRESSING THE RISK OF PRESSURE FOR ABROGATION OF THE
'COMMONWEALTH' CLAUSE.
3. ON CASTLE PEAK 'B', I ATTENDED A MEETING ON 24 SEPTEMBER WITH
DOI, DOT AND ECGD. THE GENERAL POINTS ABOUT THE IMPORTANCE OF
THE CONTRACT AND THE NEED TO AVOID SCARING CLIENTS INTO LOOKING
ELSEWHERE ARE WELL TAKEN. SO ARE THE GOOD PROSPECTS FOR HONG
KONG'S FUTURE STABILITY AND GROWTH, AND THE NEED TO AVOID ACTION
BY HMG WHICH MIGHT UPSET CONFIDENCE. ECGD NEVERTHELESS POINT OUT THAT THEIR COMMERCIAL POSITION OBLIGES THEM TO SEEK AS GOOD SECURITY AS POSSIBLE.
•
4. IT WAS AGREED THAT THERE WOULD BE MAJOR DIFFICULTIES OVER A GUARANTEE FROM CLP AND ESSO EASTERN (OR EXXON), ALTHOUGH ECGD STILL HOPE TO MAKE SOME PROGRESS ON THIS. I FIRMLY STATED THAT
A FULL HONG KONG GOVERNMENT GUARANTEE WAS NOT POSSIBLE AND
EXPLAINED THE DIFFICULTIES OVER ABSOLUTE ASSURANCES ON THE SCHEME OF CONTROL.
5. IT WAS AGREED THAT NO ACTION SHOULD BE TAKEN UNTIL EXXON HAD
DECIDED TO PARTICIPATE. THEN THERE WILL BE FURTHER CONFIDENTIAL
DISCUSSION ON HOW TO MEET ECGD'S NEEDS. WE WILL BE INVOLVED AND
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