The Japanese Dimension
16.
Į
As noted above we have strongly promoted the Anglo/Japanese consortium (led by Trafalgar House, Costains and Mitsui) for the fixed link project. Anglo/Japanese collaboration offers many attractions in Hong Kong, with Britain's presence in the Colony and the companies unmatched expertise in major bridge building with the financial resources of the Japanese, their strong presence in Hong Kong and their expertise in major construction projects of this sort.
17. As noted above it has proved more difficult than was expected to secure wider Japanese commitment to the Anglo/Japanese consortium. There is some criticism of Mitsui's role in this; but it is also evident that the major players such as Nippon Steel wish to keep their options open. This is more so when there is a possibility of other consortia which might also include both British and Japanese interests.
18. It has become known in Hong Kong that the Anglo/Japanese consortium has had difficulty in attracting firm commitments; and indeed there has been some suggestion, usually from competing parties, that the Anglo/Japanese consortium is falling apart. It will be important to reassure the HKG that this is not the case, that progress is being made (though at an admittedly slower pace than was intended), and that the Anglo/Japanese consortium continues to enjoy full HMG support. (However this is an area which it will be important to keep under constant review.)
ECGD Position
19. ECGD has been approached by a number of UK firms in relation to the Airport Platform and Lantau Fixed Link in particular. It is likely that approaches from other companies and on other elements will follow shortly.
20. Hong Kong is one of ECGD's six "concentrated markets". Our belief is that the outcome of the PMS debate offers a reasonable basis for handling the likely demands for ECGD cover for PADS-related projects, but the Chief Secretary's recent letter shows that this is by no means a foregone conclusion.
21. The Governor is aware of the debate about PMS and alert to the potential problems of restricted cover. He is particularly sensitive to suggestions that exposure to Hong Kong should simply be considered as exposure to China as 1997 approaches. ECGD and DTI have been taking the line that, while China will clearly have an increasing influence, the Hong Kong SAR will retain economic autonomy and that ECGD exposure in China and Hong Kong should be regarded as separate. (As the Chief Secretary's recent letter also shows, this view is not totally accepted in Whitehall and it is clearly a subject to handle with care.
PEP1
February 1991