TNAG-0206-FCO40-242-Construction-of-a-cross-harbour-tunnel--under-Hong-Kong-harb-1969 — Page 168

CONFIDENTIAL

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13/x1/65

6 November 9 68

2/E

Hong Kong: Harbour Tunnel Project

During my recent visit to Hong Kong I managed to have a few words with Sir John Cowperthwaite about his attitude to the project in the light of the present state of play which is, as I understand it, that:-

a)

:

b)

2.

the ECGD have insisted on joint and several guarantees from the prospective equity holders in the Harbour Tunnel Company;

the original promoters find the project un- attractive on these terms.

Strictly speaking, the Hong Kong Government has not made up its mind on its attitude in the new situation, but Cowperthwaite gave me a pretty clear indication of his own views as follows:-

3.

a)

b)

the Hong Kong Government would not be prepared to give a joint and several guarantee, though it would be prepared to give an individual proportionate guarantee relating to its proportion of the equity share-holding;

the Hong Kong Government did not envisage taking any steps to undertake the project itself if the present promoters were to back out, as now seemed likely.

Thus it seems likely that the project in its present form will be dropped or suspended until there is some new turn of the wheel.

Gaus

Curlyler

C. Hodges Esq., H.M. Treasury, LONDON S.W.1.

(C.W. FOGARTY)

CONFIDENTIAL