Reference... HWB 21/5
96
Mr. Carter
2.
I had a word on the telephone with Sir Anthony Percival, arising out of the postscript to his letter at No. 94/e. All it amounted to was a reinforcement
of the view in his letter that it would be better to go on treating this at the purely technical level.
I gave Sir A. Percival, for his own personal information, a synopsis of latest developments on this matter, and said that it seemed clear to us that the project is now moribund, in view of the attitude of the Hong Kong Government. I said that in these circumstances it did not seem to me that there would be much point in our pursuing with ECGD the argument in the correspondence at Nos. 93 and 94/e, and Sir A. Percival agreed. But I said that, were the project still alive or were it to be resuscitated, then we would certainly wish to contest the views expressed in Sir A. Percival's letter at 94/e which, I said, we found unacceptable because they ignored the constitutional relationship between Hong Kong and H. M. G. Sir A. Percival took note of this view, and we left it at that.
A15.
(A.N. Galsworthy) 12th January, 1968.
(96%)
Mr. Brown
Sir A. Galsworthy's minute indicates that no further action is necessary vis-a-vis ECGD. Relevant to this are discussions I recently had with Mr. Cowperthwaite and Mr. Marden, which I will now record.
2. I saw Mr. Cowperthwaite and Mr. Clinton on 10 January. They handed me the attached document which sets out the substance of what the Tunnel Company proposed to embody in a formal reply to the Hong Kong Government's letter at (95). Mr.Cowperthwaite said that the first proposal (the extent of the Government's investment) was unacceptable and Government would stick by (95). He pointed out also that the Tunnel Company were unable to accept the proposition that its equity should be expended before the loan was drawn. He indicated that, if the Company wanted to reopen the loan and guarantee conditions with ECGD then they would have to do it on their own. The Government
/ would
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