W(B)L 51-74 33
NOTHING TO BE WRITTEN IN THIS MARGIN
Registry No.
SECURITY CLASSIFICATION
Top Secret.
Secret.
Confidential.
Restricted. Unclassified.
PRIVACY MARKING
In Confidence
DRAFT LETTER
Type 1 +
To:-
From
Lord Shepherd
The Hon. Gwyneth
Telephone No. & Ext.
Dunwoody, MP
Department
Board of Trade.
Hong Kong Harbour Tunnel
I feel I should ask you to look once again at the terms on which the Export Credits.
is offering to cover loan financ Guarantee Department/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 representations 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 and, in this ease, with government participation).
/ As we
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