TNAG-0098-FCO40-134-Construction-of-a-Cross-Harbour-Tunnel-1968 — Page 8

CONFIDENTIAL

TO HONG KONG

CYPHER/CAT -A-

ROUTINE COMMONWEALTH OFFICE

ELEGRAM NUMBER 1510

CONFIDENTIAL.

141

145

8 OCTOBER 1963 (HWB 21/5)

YOUR TELEGRAM NUMBER 2861. HARBOUR TUNNEL.

ECG D'S STATEMENT TO THE PRESS INCLUDED THE FOLLOWING FINAL

SENTENCE: 'IT IS ALSO NECESSARY, AND IS A NORMAL (REPEAT NORMAL)'' REQUIREMENT FOR PROJECTS OF THIS NATURE THAT THE GOVERN-

MENT OR CENTRAL BANK OF THE COUNTRY CONCERNED SHOULD GIVE A

GUARANTEE OF REPAYMENT OF THE DEBT.'

2. THIS WAS A GENERAL STATEMENT IN THE LIGHT OF EC G D'S

EXPERIENCE. IT FOLLOWED AN EXPLANATION OF REASONS WHY A JOINT AND

SEVERAL GUARANTEE IS REQUIRED. THESE REASONS INCLUDED BY

IMPLICATION THE POINT THAT IN THIS CASE NO GOVERNMENT OR CENTRAL

BANK GUARANTEE. WOULD BE FORTHCOMING.

3. REPLIES TO YOUR QUESTIONS AT PARAGRAPH 2 ARE:-

!

(1) THE TUNNEL COMPANY HAVE THROUGHOUT REPRESENTED THE HONG

KONG GOVERNMENT AS A SHAREHOLDEP, NO QUESTION THUS AROSE OF

MAKING GOVERNMENT PARTICIPATION AS A SHAREHOLDER A

CONDITION OF THE OFFER. THE OFFER WOULD-NOT HAVE BEEN MAIN-

TAINED, HOWEVER, HAD THE COMPOSITION OF THE TUNNEL COMPANY

BEEN ALTERED AT A SUBSEQUENT STAGE, IT WOULD THEN HAVE BEEN

NECESSARY FOR E C G D TO RECONSIDER IN THE LIGHT OF THE

NEW FACTS.

(2) ''FORMAL REQUIREMENT** SHOULD READ 'NORMAL REQUIREMENT'.

THIS MEANS THAT IT IS HIGHLY UNUSUAL FOR A GOVERNMENT MOT

TO ASSOCIATE ITSELF WITH SUCH A PROJECT. "A PROJECT OF

THIS NATURE'' MEANS AN INFRASTRUCTURAL CONSTRUCTIONAL

LAST

REF

FX

141

CONFIDENTIAL

/CONTRACT