TNAG-0097-FCO40-133-Construction-of-a-Cross-Harbour-Tunnel-1968 — Page 160

Reference.

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Sir Arthur Galsworthy

A Note giving fuller background details of the Cross Harbour Tunnel project is at (E/46).

2.

Consideration of the project has been protracted

because:-

3.

(a) it is intrinsically a risky proposition; (b) the promoters (including the Hong Kong

Government) refused to give the guarantee which E.C.G.D. are compelled to require;

(c) the Communist confrontation introduced

further risks and also major political

considerations.

We think that the Hong Kong Government must be pressed to share in the guarantee and that the strongest boost to public confidence would be provided by a joint guarantee of the kind we propose. Our proposals emerged in the course of an inter-departmental meeting on 16th August; representatives of E.C.G.D., Board of Trade and Treasury, without committing their departments, felt that they were worth putting forward a in the diaff below!'

4.

We gather that a possible Treasury line is to maintain they that i constitute aid and should therefore be a charge against the aid ceiling. O.D.M. have already rejected such a proposition and if it is to be pressed by the Treasury, the deadlock will continue. We have sought to pre-empt this line by the second part of paragraph 6 of the draft.

5.

Already the delay is provoking reminders from the Governor and from Colonel Clague, one of the main promoters, and a very early decision one way or the other is necessary.

Meanwhile If this is likely to be impossible, then we must send an interim reply to Hong Kong. A draft is attached.

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MR. Carter

4.5. Cart

(W.S. Carter)

25.8.67.

We discussed. I have despatched the letter; & we decided on a rather

diffrent hepairs to Hay Kay.

AM. 22/2