TNAG-0097-FCO40-133-Construction-of-a-Cross-Harbour-Tunnel-1968 — Page 283

COMM

CONFIDENTIAL

INWARD TELEGRAM

TO THE COMMONWEALTH OFFICE (The Secretary of State)

FROM HONG KONG (Sir D. Trench)

Cypher

D.

22nd March, 1967. R. 22nd

"

08.30 hrs.

ATION

221

MAR

6

196.

PRIORITY

CONFIDENTIAL

No. 386.

Addressed to Export Credits Guarantee Department London. Repeated "Board of Trade (Commonwealth Office please

pass to both).

EXPORTCRED No. 46.

For Elliott from Hannam.

Tunnel.

I again spoke to Clague last night. He told me that the Board had received encouraging reports from London on the progress of the technical talks between the consultants and Costains. He also said that a letter had been received yesterday from the Japanese reducing their interest rate by

% to 6% "on account of the reduction in the British bank rate".

2. Clague told me that he had written to Lord Rhodes asking his opinion on the advisability of Clague approaching the Prime Minister. Clague then invited me (a little anxiously I thought) to forecast your reactions. I kept my reply fairly vague but proceeded on the general lines of paragraph 14 of my letter of 14th March to you. I then invited Clague to give his reaction to the idea that the equity of the company should be increased. He said that he thought that (HK)120,000,000 was enough. He confirmed however that the bank were pushing hard for the Hong Kong Yaumati ferry to be admitted to the ranks of equity subscribers. His idea is however that if Yaumati come in they should merely participate in an equity of $(HK)120,000,000. Clague said that he has put up an extra $4,000,000 more than Marden. He did not elaborate. But a possibility is that he has advanced part of R.C. Lee's share. Though he repeated that (HK) 120,000,000 was sufficient, I somehow got the feeling that Clague would not rule out an increase in the equity, and I am fairly sure the bank would feel this way also.

(Passed as requested)

Copies sent to:-

Export Credits Guarantee Department Board of Trade

RECEIVED IN ARCHIVES No. 63 23 MAR.96/

this 21/

Mr. Elliott Cablegram Section

CONFIDENTIAL