TNAG-0097-FCO40-133-Construction-of-a-Cross-Harbour-Tunnel-1968 — Page 168

Dd.033009 Gp.863

CONFIDENTIAL

3.

*

No dust it could be argued that, if the project has und acquired such public, Writical importance, it would

hot in unseasonable

عليكم

& bring further, fo us pussure & bear on the Hay Kay fort for them to bear the whole of

llu

liability for the Guarantee. But This overlookes one basic point in all Nus, namily that рлый puthic piciar in Hay Kang - & I think

NOTHING TO BE WRITTEN IN THIS MARGIN

also in a wider area

9 S. E. Asia - has

brucholme

come & regard this projet as a of Hallelude

su

Halb. towards наль the Colony's future.

g

must go forward. It follows that the guarantee

required by E.C.G.D. must be found.

indeed

5. We have for some time been casting round for

some way of making a tangible gesture of support

towards Hong Kong and of confidence in its future.

We feel that this project provides the opportunity

to make a gesture which would be of the greatest

political value in Hong Kong at this present time,

and which might cost us nothing at all in the final

It would give a considerable fillip to

public confidence, strengthen pro-British sentiment

with its important commercial implications

and

outcome.

-

secure for Britain a major engineering contract

involving large quantities of British steel and

serving in the region as a notable advertisement

for British engineering skill. We have in mind the

assumption by H.M.G. of liability for half the

guarantee required by E.C.G.D. This, we feel,

should make it easier for Hong Kong to reconsider

their attitude towards guaranteeer At worst this

proposal could cost us £5 million, but in practice the

risk is smaller; the liability is proportionate to

the money expended and would be greatest when the

project was completed but not yet earning; it

the

would decrease as revenue enabled repayments of the

loan to be effected.

(

A fear has been expressed

that, because of rising local costs, the loan

required from Lloyds Bank, together with the E.C.G.D.

guarantee, would have to be increased. To avoid a

situation in which we and E.C.G.D. would find

ourselves landed with an open-ended commitment, we

feel that this is a liability which the Company and

CONFIDENTIAL

/the