TNAG-0097-FCO40-133-Construction-of-a-Cross-Harbour-Tunnel-1968 — Page 143

3.

This is required from Hic as guarantory nor shouchneter.

Ociar

་་

concerned.

(3)

(N.B.

Payment by the company of $750,000.

for special approach roads in two

instalmenta during the construction

period. Para. 4 (a) of the Treasury

letter may have some bearing on this.

I am writing from memory. There

are possibly other minor public.

charges).

Para. (c) (ii)

(d)

These paragraphs seem to imply that Hong

Kong must set aside and keep intact, whatever

might be the temporary calls on its reserves, a

specific amount of its London funds, reducing as

the outstanding loan reduces; and that the

Treasury are not prepared to rely on Hong Kong's

general credit-worthiness. This raises several

for this.

issues apart from the political issues in Hong

Kong of such a mortgaging of specific essets:-

(1) There do not seem to be precedents

Presumably the justification is that

H.M.G. will be taking half the technical and

commercial risks (but see para. (c) (iii)

below).

(2) No commercial shareholders would

provide such security and it will be impossible

for the Hong Kong Government to obtain such

special

(See para.

(3)

guarantees from the other shareholders.

2.

below).

It raises the issue whether there

bank

is any point in taking a bank loan at 54%

rather than making a direct loan to the company

from Hong Kong funds of 50% of the proposed

bank loan. The point is largely whether the

/assets