TNAG-0037-FCO40-73-Effort-to-improve-relations-with-Hong-Kong-1968 — Page 66

CONFIDENTIAL

4.

7. E.C.G.D. will require to bo satisfied as to the torns of the loan

agrooment and the supply contract. This is implicit in H.M.G's undertaking

to share in the guarantco on a commercial contract otherwise acceptable to E.C.G.D. The points mainly concorn tho adequacy of provisions for tommination

of contract, arbitration in case of disputo, adcoquato dofinition of

responsibilitics and amounts involved, and the interlocking or compatibility

of the two contracts.

8.

Additionally, H.M.G. will wish to bo satisfiod that the terms are not

so onorous to the supplier as to be incapable of fulfilment or which could

only bo fulfilled at considerable hardship. As guarantors H.M.G. and tho

Government of Hong Kong have tho samo intorost in this rogard noither wish

to force the contractor into bankruptcy during construction. As sharoholders tho Hong Kong Governmont have slightly different interests and H.M.G. hopc

that in the former capacity the Governmont of Hong Kong will uso thoir

influence with the shareholders to secure reasonable torns.

CONFIDENTIAL