TNAG-0097-FCO40-133-Construction-of-a-Cross-Harbour-Tunnel-1968 — Page 188

CODE 18-75

Reference....

-942

HONG KONG TUNNEL

Mr. Sowden rang yesterday afternoon (28th June).

He reminded

There

me that Costain's bid had just run out and said that they had not replied to the suggestion that it might be extended subject to certain conditions. He said, and this was news to me, that Costain's had never been formally asked to extend their bid. had been some discussions with the Engineers about the conditions on which the bid might be extended and on the desirability of proceeding straight to negotiate a contract without any Letter of Intent in the menatime.

2.

Mr. Sowden's purpose in ringing me was to ask what line Costain's should now take. Should they now withdraw their engineers from Hong Kong? If so, they would find it difficult to reverse engines later if the Tunnel Company eventually decided to go ahead. He further sought my advice on

3.

a) the possibility of amending the guarantee conditions

to meet the Tunnel Company's objections,

b) the importance to the U.K. Government of this contract

going on, and

c) its importance to the Hong Kong Government.

I said that I could not advise him at all on (a); this was a matter for ECGD and Mr. Sowden should keep in touch with them. He said he was doing this.

4.

On (b) and (c), I said that we, in the Board of Trade, attached a good deal of importance to this contract, if it was let, coming to a British firm, and it would be disturbing if

Mr. Sowden because Costains now withdrew it went to the Japanese. said there appeared to be no likelihood of this at all. 5. I went on to say that the political implications were a matter for the Commonwealth Office and the Hong Kong Government. We had taken steps to ensure that they were aware of Costain's position and had sent a telegram to Hong Kong at the end of last week. We knew that the Hong Kong Government were concerned, but

The Governor was, had not received any reply to the telegram.

as

Mr. Sowden knew, in London at present and there was a possibility I said that I of having a talk with him this Thursday afternoon. hoped Mr. Sowden would not feel it necessary to take any action to withdraw immediately. Those concerned in Hong Kong had I hope therefore many other things to think about at the moment. that he would wait a few days and I suggested that before doing anything he should have a word with Mr. Carter at the Commonwealth Office.

Miss Doyle

cc: Kr. W.F.Carter

lir. Mr. Darlington.

Cotterill

-

Commonwealth Office.<

E.C.G.D.

NSM

(M. 3. Morris)

C.R.E. 2 29th June, 1967.