CYPHER/CAT A
CONFIDENTIAL
IMMEDIATE FOREIGN AND COMMONWEALTH OFFICE
TELEGRAM NO. 208
- CONFIDENTIAL
ΤΟ
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HONG KONG
28 MARCH 1969
(HKK 21/4)
FOR COWPERTHWAITE FROM CARTER.
YOUR TELEGRAM NO. 257. CROSS HARBOUR TUNNEL.
101
HANNAM HAS REPRESENTED THAT THERE IS POLITICAL RISK IN TUNNEL NEGOTIATIONS ONCE AGAIN BECOMING A MATTER OF PUBLIC AND PRESS DISCUSSION BEFORE OUTCOME IS CERTAIN. WE TAKE HIS POINT BUT FOR THE REASONS GIVEN BELOW WE CONSIDER THE BALANCE OF ADVANTAGE LIES IN YOU MAKING A STATEMENT ALONG THE LINES YOU PROPOSE. BUT AFTER CONSULTATION WITH ECGD WE RECOMMEND THAT PRESS RELEASE TAKES THE FOLLOWING SLIGHTLY AMENDED FORM.
QUOTE.
GOVERNMENT HAS INFORMED THE CROSS HARBOUR TUNNEL COMPANY LIMITED TODAY THAT IT IS PREPARED TO SUBSCRIBE 25% OF THE COMPANY'S SHARE CAPITAL UP TO A MAXIMUM OF HONG KONG DOLLARS 27 AND ONE HALF MILLION AND TO GIVE (WITH OTHER SHAREHOLDERS) A COUNTER-GUARANTEE OF ITS PROPORTIONATE SHARE OF A BRITISH BANK LOAN OF APPROXIMATELY £12 AND ONE HALF MILLION TO BE GUARANTEED BY ECGD. GOVERNMENT'S AGREEMENT IS CONDITIONAL ON THE FORMAL APPROVAL OF THE LEGISLATIVE COUNCIL, ON THE SATISFACTORY SETTLEMENT OF CERTAIN OUTSTANDING MATTERS STILL THE SUBJECT OF NEGOTIATION BETWEEN THE COMPANY, ECGD AND PROPOSED CONTRACTORS, THE COSTAIN CONSORTIUM, AND ON THE COMPLETION OF THE COMPANY'S OTHER FINANCIAL ARRANGEMENTS.
UNQUOTE.
2. REASONS FOR THESE SUGGESTED AMENDMENTS ARE TO AVOID POSSIBLE
IMPRESSION THAT ONLY GOVERNMENT WILL BE GIVING GUARANTEE AND BECAUSE
GUARANTEE WILL NOT IN FACT BE GIVEN DIRECT TO ECGD BUT TO THE UK
BANK MAKING THE LOAN.
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