CONP I
NT T 1,
31.
Mr Rams Sund
(o/r)
34/23/1
FARD 1416
9th June, 1967.
Nor
нсей
NOT
Good
1.
Cross Harbour Tunnel
May I refer to Stephens' letter 0/FCON 35/8/2 of 2nd June to me about the tunnel.
2. I am about to go on long leave and am handing over to Ben Thorne. He and I to-day went to pay a courte ay call on the Governor. A day or two ago we also called on Duggie Clague, and on both occasions we discussed the tunnel/
(He
3. In Hong Kong, the Tunnel Company are well aware of the caveat contained in the second paragraph of Lowton's letter of 23rd May (SL./CW 24126/35) to Costains. From what Clague said to us the principal shareholders are also having to do some hard thinking. inferred that some financial support from Europe that he had been anticipating had suddenly been withdrawn.) Nevertheless Clague himself said that he was sure the tunnel would go through, and that the equity capital would be assured. Since then of course the security position here has improved a little and then has deteriorated once more, and in this latter period I have not had a chance to see either Marden or Clague. I an therefore of their latest thinking.
4. The Governor however was quite explicit in his views to-day. He said that cancellation of the tunnel project at this time would be "disastrous" from the political point of view. Conversely announcement
of a contract being awareɖto build the tunnel would be a good thing politically and would aid the maintenance of stability in the Colony.
5.
I told the Governor that one of the questions which was proving a stumbling block in the negotiations was the refusal of the Colonial Government to offer any guarantee. H.E. replied that we would probably find that his Government was more flexible on this point nowadays.
6.
I do not know how this fits in with your negotiations with Costain's, and I will not press this point any
cont'd/further here./...
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