TNAG-0207-FCO40-243-Construction-of-a-cross-harbour-tunnel--under-Hong-Kong-harb-1969 — Page 121

CONFIDENTIAL

CYPHER/CAT A

IMMEDIATE HONG KONG TO FOREIGN AND COMMONWEALTH OFFICE

TELEGRAM NO. 194

1 MARCH, 1969

79

法

CONFIDENTIAL

ADDRESSED FCO AS MYTEL NO. 194 OF 1ST MARCH,

PERSONAL FOR LORD SHEPHERD FROM GOVERNOR. YOUR TEL 153.

CROSS-HARBOUR TUNNEL.

78

WE HAVE NO INFORMATION ON THE ATTITUDE OF THE HONG KONG AND

SHANGHAI BANK, BUT WE WILL MAKE AN ENQUIRY AND I WILL REPORT

RESULTS LATER. THE PRECISE WORDING OF PHRASE DESIGNED TO LIMIT

THE BANK'S GUARANTEE TO ITS QUOTE HONG KONG ENTITY UNQUOTE

IS LIKELY TO BE CRUCIAL.

2. IT APPEARS THAT THE TUNNEL COMPANY AT PRESENT TEND TO FAVOUR

THE BRITISH PROPOSAL SEMI COLON AND THE LATEST DEVELOPMENT

(TODAY) IS THAT THEY HAVE ASKED US TO INDICATE IN PRINCIPLE

WHETHER WE ARE PREPARED TO JOIN THE COMPANY IN DETAILED NEGOTIATIONS

WITH E.C.G.D. AND COSTAINS. THIS WILL REQUIRE REFERENCE TO THE

EXECUTIVE COUNCIL.

3. BUT AT THE SAME TIME THE FRENCH HAVE SOMEWHAT IMPROVED THEIR

TERMS BY REDUCTION OF INTEREST RATES BY ONE PER CENT AND BY

LIMITING GUARANTEES REQUIRED TO COMMERCIAL RISK AND 65 PER CENT

COVER CI.E. EXCLUDING ANY GUARANTEE FROM GOVERNMENT OR THE BANK).

FURTHERMORE COSTAIN'S PRICE HAS GONE UP, PERHAPS BY AS MUCH AS

DOLLARS 30 MILLION. THE COMPANY THEREFORE ARE KEEPING THE FRENCH

OFFER OPEN, EVEN THOUGH THE FRENCH PRICE IS OF COURSE STILL SUBJECT

TO NEGOTIATION,

LAST

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861

ALF.

CONFIDENTIAL

4./ TO SOME EXTENT

HKK 21/4

6961 -

LEON SH

СЭЛЭХ

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