TNAG-0206-FCO40-242-Construction-of-a-cross-harbour-tunnel--under-Hong-Kong-harb-1969 — Page 19

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CONFIDENTIAL

MR. Morelan

Sir A. Galsworthy Mr. Godden

12. Shewadta

HKK 21/4

R&PA.

Mr. Moreton

minute - perhaps

worthy

see minute

To see Lord fliphard's

You would kindly tale

This point

Afthin Lurrently

Please

si

Ford Shepherd's note beun,

which I have copria to

ати Что вили

Mr. Moreton and

Ford Shephard with

Couch upon

FLAG A 31

FLAG B

FLAG C 38

58

board for you

Provusly

the

tunnel

when he aus

$7.00

M

Martin

HR. visit?

ANS.

19/2

سهم

ه

ستمها

Rodda 19/2

It is some time since Lord Shepherd left the matter of the

Cross Harbour Tunnel, Hong Kong, to be pursued between ourselves

and ECGD. Although the situation is still fluid, it is perhaps

time to put the Minister in the picture, particularly as he has

recently received a copy of a letter on the subject addressed to

Colonel Clague by another shareholder in the project, Mr. Kadoorie.

I think that a decision on whether to react to that letter can well

wait for a few days but in the meantime, Lord Shepherd should know

what is happening.

2.

We have, of course, been in touch with ECGD, whose revised

terms have now more or less crystallised. They now require

several guarantees of shareholders in proportion to their equity

holdings, but have dropped the joint guarantee. They also propose

certain procedural arrangements to secure their access as

creditors to the proceeds of the operation of the tunnel. The

Hong Kong Government have been told this and the other shareholders

have been given the same information through the Trade

Commissioner. In later telegrams these terms have been spelt out.

FLAG D In particular, ECGD have explained where they stand on the

57

political risk and how the several guarantees would operate in

that connection. Very briefly, in the event of a Chinese takeover,

ECGD would not pursue those guarantors who have been forced out of

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CONFIDENTIAL