TNAG-0276-FCO40-312-Plans-for-construction-of-underground-railway-system-in-Hong-1970 — Page 70

PERSONAL AND CONFIDENTIAL

I fear, however, that the Hong Kong Government is unlikely to change its policy without some pressure from HMG. This, however, could possibly be sweetened by some financial inducement and as it is the financing of this project which is giving the Hong Kong Government the most food for thought, a package deal of some sort, accompanied by some kind of financial guarantee, might well be attractive to them.

The only way, therefore, I can see the Hong Kong Government departing from their usual practice of international tender is by negotiating this project on a Government to Government level and agreeing to some package deal.

You also asked whether British firms are really interested in this project. I do not think there is any doubt that they are. Last July, a small three man Mission came out in this connection. It consisted of Mr. D.D. Morrell, of the Export Group for the Constructional Industries (EGCI) on the construction side, Mr. G.A. Lake, of the Locomotive & Allied Manufacturers Association (LAMA) on the traction side and Mr. R. Williams of Rothschilds on the financial side. They went back very enthusiastic about the scheme and since then the Commissioner for Transport of the Hong Kong Government, Tony Shephard, and an official of the Hong Kong Public Works Department, Mr. A.H.Wilkins have, during their leave in the U.K., met these Associations and other interested British bodies including ECGD and the Board of Trade.

There is now talk of a major Mission representing EGCI and LAMA coming out to Hong Kong but I am doubtful if at this stage they would accomplish much. Until the financial and political aspects of the scheme have been settled, and as I said earlier I think this can only be done on a Government to Government basis little progress can be made on a technical level.

The Board of Trade (my immediate contact is Ken Price in CRED) is, of course, fully briefed on this question but if you would like me to give you further details, I would be very happy to do so.

J.K.Blackwell

Kenneth Cantwe

Ката

Senior British Trade Commissioner

JKB: jms

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PERSONAL AND CONFIDENTIAL

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