CONFIDENTIAL
FM BTC HONG KONG
TO IMMEDIATE DTI
TELNO OTTER 210
OF 11110OZ NOVEMBER 91
AND TO IMMEDIATE F C O
INFO IMMEDIATE TOKYO
128
CONFIDENTIAL
134
153170
MDHIAN 1414
HK B 18213
TAY
20 NOV 1991
TOP COPY
Q DIST ?
REGISTRY
FOR ROGERS PEP
YOUR TELNO OTTER 253: HONG KONG AIRPORT PROJECT
SUMMARY
1.
THE IMPLICATIONS OF THE JAPANESE APPARENTLY LIMITING EXPORT CREDIT TO HONG KONG ARE PROFOUND. NEVERTHELESS AS SEEN FROM HERE
I DOUBT WHETHER THERE IS ANY ADVANTAGE IN A MINISTERIAL LEVEL APPROACH TO THE JAPANESE GOVERNMENT AS SUGGESTED IN YOUR TUR, PARTICULARLY SINCE ECGD'S OWN POSITION IS STILL UNCLEAR, BUT A LOWER LEVEL EXPLORATORY APPROACH, AS ALSO SUGGESTED, COULD BE USEFUL.
DETAIL
2. CLEARLY YOUR TUR RAISES SOME IMPORTANT AND DIFFICULT ISSUES. MY COMMENTS ARE INHIBITED BY A LACK OF KNOWLEDGE ON SOME KEY POINTS, PARTICULARLY THE TIME-TABLE OF ECGD'S CONSIDERATION OF THE ANGLO-JAPANESE CONSTRUCTION COMPANY (AJC)'S BID AND ITS LIKELY OUTCOME, AND ALSO THE SHARE OF WORK AND FINANCING BETWEEN ON THE ONE HAND TRAFALGAR HOUSE AND COSTAIN AND ON THE OTHER MITSU, WITHIN THAT GROUP.
3.
THE IMPLICATIONS OF JAPANESE EXPORT CREDIT PERHAPS NOT BEING AVAILABLE AFTER 1997 IN THE ABSENCE OF A SOVEREIGN GUARANTEE, ARE OF COURSE PROFOUND AND DISTURBING. GIVEN THE EXPECTATIONS HERE ABOUT JAPANESE INVOLVEMENT IN PADS RELATED AND OTHER PROJECTS, AND ASSUMING THAT OTHER COUNTRIES MIGHT TAKE A SIMILAR VIEW, SINCE EXPORT CREDIT IS NORMALLY AVAILABLE ON A MATCHING BASIS, THE IMPLICATIONS FOR HONG KONG'S WHOLE PROJECT PROGRAMME, NEARLY ALL OF WHICH SPANS 1997, COULD BE VERY DAMAGING.
THAT SAID, WHILE I SEE NO HARM IN A CAUTIOUS LOW-KEY AND LARGELY EXPLORATORY APPROACH TO THE JAPANESE, I DO NOT MYSELF SEE
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