Since the Tunnel Company now seems able to make the necessary financial arrangements, it would seem a pity that the project should fall down because of conditions that do seem to be out of the ordinary. We cannot claim that it is of great importance to Hong Kong; but the Hong Kong Government does regard it as a worthwhile project provided it does not make too much of a call on government resources, which are heavily committed elsewhere. It is not, of course, for me to state the considerable British interest in obtaining this contract. But I understand that if Costains got the contract they would be pioneering, outside America, a new Technique in tunnel-building by the use of a steel tube; this method could be increasingly used in future and the firm would be in a favourable position to exploit any such development. And, as you of course know, the steel involved (costing, I am told, about half the contract price) would be a useful boost to British steel exports.
In all the circumstances I would ask that the need for such stringent conditions for ECGD cover of the loan is given further and careful examination.
Since Colonel Clague has indicated an intention of making a further approach to the Prime Minister, I am sending a copy of this letter to Michael Palliser in the Prime Minister's office for information.
(SHEPHERD)
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