(a)
the contract was in several parts,
e.g. aprons, runways, terminal buildings and freight buildings
the first of which has already been
put out to tender;
(b) public opinion would insist on
contracts being submitted to public
tender;
(c) it would create great difficulties
over the use of local materials such
as cement and steel reinforcing bars.
The Governor also emphasised that it would not
be possible to avoid public tender.
4.
(c) above rests, I think, on a misunder-
standing. We did not envisage a British contractor importing materials available locally and obviously more cheaply, and had excluded
such items from our rough calculation of the possible "British content" eligible for
ECGD-backed finance.
5. On this aspect of the discussions Moreton concluded that it will not be possible to persuade Hong Kong to place the whole contract in British hands on the basis we were proposing. But it was clear to him that Hong Kong would regard it as a helpful contribution if HMG
were to let it be known in advance that ECGD
cover would be available for any part of the
contract awarded to British firms.
6. Moreton asked Cowperthwaite what he would
regard as a fair contribution to the project from HMG given our present economic circum-
stances and as a visible demonstration of our
self-interest. Cowperthwaite replied that
above all the waiving the outstanding repay- ments of the existing loan for Kai Tak (£1.4 million now outstands with a further repayment of £200,000 due on 1 October) would be so regarded.
of
7. The discussions next turned to a develop-
ment of which I think you may be unaware. Hong Kong are submitting applications for a 50% C.D. & W. grant towards the cost of the
/ improved
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