CONFIDENTIAL
Specific points raised by Haddon Cave on which I would like to comment are as follows. He asserted that "the benefit from any extension of the international facilities (at Kai Tak) would accrue to the U.K. and not to Hong Kong" and that "a regional airport would have sufficed for Hong Kong's own needs". This is surely nonsense but I should be grateful for your own comments on this.
As far as the container port is concerned, our information is that far from exercising favouritism towards the British firm, the Hong Kong Government submitted to virtual economic blackmail by the Japanese who made a quite unrealistic and very probably Government subsidised offer two-thirds higher, than the British tender.
It is interesting that Haddon Cave now admits that an underground scheme could be commercially viable. Cowperthwaite has always maintained that it would not be and this seems to have always been his chief cbjection to the scheme. “Hong Kong cannot afford it" has been his usual cry.
Whether any combination of discouraging private cars and improving roads could be the answer to Hong Kong's traffic problems is very debatable. The limits to more and bigger roads is obvious in such a crowded area as Hong Kong and it is extremely doubtful if severe restrictions on private cars would be socially acceptable. All one can say with certainty is that other towns with similar traffic problems have found that an underground railway is both a big contribution to a solution and can be economically viable (at least in the larger sense). It is difficult to see why Hong Kong should be so different.
However, as you so rightly say, whether Hong Kong adopts this scheme or not is their affair. We are only interested in seeing that if it is adopted (and all indications are that sooner or later it will be, assuming that the political and economic situation remains stable in Hong Kong), British firms should be employed in its construction and its equipment. I myself feel that for politico-economic reasons Britain should, if necessary, receive favoured treatment, especially as Japanese competition is so obviously not "free" competition in the normal sense.
However, if this does not conform with HMG's policy, I do not wish to flog a dead horse or in any way to embarrass HMG in its relations with Hong Kong. If you feel I am doing this, please let me know and I will promptly withdraw from the fray.
J.K. Blackwell
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Senior British Trade Commissioner
2. CONFIDENTIAL
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