Mr Stone
Mr (6x
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1. Pl cc
J
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GeqM2817 f.1.) on Ricketts of+
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Reference..
HKA 182/3
Many thanks. Plask the Hall to
over a copy of his tel to BTC explaining the situation.
send us
2817
From: T Furness Hong Kong Dept Date: 28 Jul 92
Post wed
Jan ETGD
28/ü
CC Mr Seddon (ERD)
* Jee
note below.
-Sir J Goles
AIRPORT PROJECT, PLATFORM CONTRACT:
1.
EXPORT CREDIT
153
I discussed BTC tel no Intra 199 with Mr Pentecost, ECGD.
2.
Mr Allen's (PAA) request for a firm commitment by ECGD Áor credit cover for the airport platform contract has taken ECGD (and no doubt Treasury also) by suprise. Recent indications they have had from the Finance Director (PAA) were that the PAA is not yet in position to support a credit plan, and that its own financial plan has yet to be finalised. I told him what I believed were the political advantages, vis a vis the Chinese, and investors, of announcing the successful consortium quickly, even if work were not to start until later.
3.
Mr Pentecost said that despite the earlier agreed intention to ring-fence funds for credit cover for new Airport and Black Point related contracts, the reality is that the amber zone budget for Hong Kong has not yet been agreed with Treasury. Taking account of the recent commitment for Black Point and earlier airport contracts ECGD's market exposure control provision for Hong Kong was all but exhausted.' Repayments over the next few months would bring the control provision back into credit but it would be closer to the end of the year by the time there was sufficient credit build-up to accommodate the largest application for the platform ie. £120-130 million by Costain. He thought it unlikely that the Treasury would acquiesce under pressure and allow ECGD to give the commitment which the PAA were seeking.
4. Mr Hall (PEP) took rather much the same line. Both he and Pentecost thought that Allen was " trying it on ",
', motivated by the need for the PAA to establish its credentials to encourage investors. Allen had in fact run such a scenario past Hall earlier this year. Hall believed it unwise to attempt to persuade ECGD/Treasury to commit money now if the contract is
CODE 18-77
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