Sir M Mackose
38
SEP
THE "NONSENSES OF THE TUNNEL"
1.
I am sorry that owing to my absence from the office it has taken so long to answer your query of 10 September.
2. The tunnel "nonsense" dates back to 1968 and relates to problems arising between HMG and HK when ECGD were considering credit guarantees for the road tunnel now under construction in HK.
3. In the first place as explicit in the Department's title ECGD guarantees were normally intended for the manufacturing industries and tunnels did not qualify. Secondly, the French showed interest and this made it possible for ECGD to consider what is described as "matching" guarantees. Further complication was that ECGD required certain security and this, for a variety of reasons, was not forthcoming, either from the Tunnel Company shareholders or from the HK Government. result, there was considerable acrimony and, once again, charges were made that HMG were reluctant to support HK. Hence the wish that for the Underground Railway the HK Government will act as sponsor and that a repetition of the tunnel unpleasantness can be avoided.
As a
4. It so ha pens that the ECGD are preparing a brief on this subject for Mr Blackwell, our Trade Commissioner in HK, who is visiting ECGD on the morning of 5 October. I understand you are entertaining Mr Blackwell to lunch on the same day and, on the assumption you might find further information of interest, I have arranged for a second copy of the brief to be passed on to you by Mr Blackwell.
Jr. bluntly
JA Clewley
Hong Kong Department
4 October 1971
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