W(B)L 51-7433
NOTHING TO BE WRITTEN `IN THIS MARGIN
Registry No.
SECURITY CLASSIFICATION
Top Secret.
Secret.
Confidential.
Restricted. Unclassified.
PRIVACY MARKING
In Confidence
DRAFT
LETTER
выбе
To:-
Todno
The Hon. Gwyneth
Dunwoody, MP.
Board of Trade
Type 1 +
From
Lord Shepherd
Telephone No. & Ext.
Department
you
Hong Kong Harbour Tunnel
-I feel I should ask you to look once again
at the terms on which the Export Credits Guarantee Department is offering to cover loan
finance for the cross-harbour tunnel in Hong
Kong, in particular at the requirement that the
shareholders in the project should give joint
as well as several guarantees for the loan.
The considerations that have led me to
make this request arise from informal represen-
tations made to my department by representatives of the Tunnel Company. Colonel Clague (Chairman of Hutchison International Limited,
a principal shareholder in the Tunnel Company) is in England at the present time.
He has,
as you know, already made representations to
the Prime Minister and has indicated to my
department that he is thinking of asking to
see him again.
The
The representations made to us turn on the
unreasonableness of the joint guarantee requirement. It has been urged that it is a very onerous and unusual requirement in commercial practice; and that, as a very considerable contingent liability in the balance
sheets of each of the shareholders, it could seriously affect their credit-worthiness.
broader point has been made to us that, on the
conditions ECGD seek to impose, it is difficult to see what risk they shoulder or function they perform in return for their premium. And finally we have been asked to consider the point that special consideration should be given to
terms to be given to private interests when
undertaking a project normally undertaken by
governments.
As we understand them, ECGD's reasons for
requiring a joint guarantee are mixed, stemming
/ partly...
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