dti

the department for Enterprise

CONFIDENTIAL AND PERSONAL

elements of the work, the financial package would be of

primary importance.

They were clear that it would be

disastrous to the hopes of UK companies if ECGD cover was not

fully available; indeed, it would be very damaging to the

confidence of Hong Kong if such a situation were to arise.

Furthermore, the Governor stressed that any move to aggregate

exposure in China and Hong Kong as a single risk would be very

politically damaging in Hong Kong. I believe we must

recognise that the PADS project carries requirements for

substantial volumes of ECGD cover; and it will be important to

take this fully into account in taking decisions on ECGD's

future cover in Hong Kong following the current Portfolio

Management Systems Review. It would be damaging indeed if

Government decisions on ECGD cover prevented UK companies

bidding competitively for work on this large and prestigious

project.

TIM SAINSBURY

CONFIDENTIAL AND PERSONAL

Recycled Pap

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