CONFIDENTIAL
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HK $1906 million - £134.7 m - excluding engineering fees, super- vision of construction, Government administration costs and possible future inflation).
7. If the Hong Kong Government gave instructions to proceed with the detailed design and preparation of contract documents by mid-1971, construction could be started at the beginning of 1973, and the first stage opened early in 1976. The Initial System could be completed by the end of 1978 and the full Preferred System by 1986.
Views of the Transport Advisory Committee
8. The Final Report has recently been considered by the Transport Advisory Committee. In a telegram dated 18 January the Senior British Trade Commissioner reported that the Transport Advisory Committee had recommended to the Governor that the system as proposed by the Consultants was both necessary and adequate for Hong Kong's future transport needs. He added however that the Chairman of the Committee had pointed out that this recommendation was made only from the transport and traffic point of view and that there were other considerations such as the high cost of the project and other claims on Hong Kong's financial resources.
When a decision is likely to be taken
9. The Senior British Trade Commissionerhas also reported that virtually everyone outside the Financial Secretary's Office is convinced that the underground system is the only answer to Hong Kong's traffic problems and that there is no reason why it should not pay for itself. He has indicated that as public opinion and the press have come out strongly in favour of the scheme those who oppose it on the grounds that it is too expensive in relation to the potential benefits may find their hands forced. He thinks a decision in principle by the Government might possibly be taken as early as March, though it would be impracticable to have the financial details finalised by then.
10. When Mr Haddon-Cave was in London before Christmas he told the Department of Trade and Industry that the hesitation of the Government to go ahead was less on the score of inability to finance the project than because it was, in their view, very doubtful whether, vast resources having been committed to the scheme, it would prove the solution to Hong Kong's traffic problems. Transport experts were divided on this point and would remain so. Mr Haddon-Cave told me that even if it was decided to go ahead with the scheme a decision could not be taken until, at the earliest, the end of 1971.
Sources of Finance
11. The Consultants' views on possible sources of capital funds for financing the system are set out in paragraph 18.4 of the Final Report.
ARGUMENT
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12. The Senior British Trade Commissioner in letters to Mr Royle and the DTI has argued that in view, of the size and value of
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