CONFIDENTIAL
29. The Treasury have resisted the extension of Hong
Kong dollar finance on fixed rate terms principally because of their fears about the longer term stability.
of the Hong Kong dollar. The Hong Kong Government and
public see this as HMG's reluctance to express full
confidence in the future prosperity of Hong Kong,
prosperity which under the Agreement we are committed
to try to maintain over the next 12 years.
30. The requirement for fixed rate finance in Hong
Kong dollars i s now a common feature of calls for tenders for public sector projects in the territory. Recently,
consortium
a
British-led
subsequently argued that HMG's
late stage to offer official
dollars (ECGD had, without
This loons a diffaitt
tendered
un successfully for the £100 million Tuen Mun Light
Rail project and has
refusal until a very
support in Hong Kong
consulting either FCO ог DTI, entered into an
agreement with other credit agencies not to provide
fixed rate Hong Kong dollar finance for Tuen Mun) have
be en a factor in their loss of the contract.
Following the loss of Tuen Mun, attention is now
focussing on a short list of three consortia bidding
for the Second Harbour Tunnel Crossing, a huge project
with a potential UK content of £145 million. Treasury
are maintaining their existing line on Hong Kong dollar finance for this project and this may well put
the British companies involved
at
serious
disadvantage.
a
We and DTI are pressing Treasury at
Ministerial level to reconsider the case.
बिहार
probum.
Can he
Treasury
prouaded?
16 September 1985
AC Galsworthy
Hong Kong Department
CONFIDENTIAL