K271
Enter & PJ pl.
EXPORT CREDITS GUARANTEE DEPARTMENT
P.O. BOX NO. 272, ALDERMANBURY HOUSE, ALDERMANBURY, LONDON EC2P 2EL
Telex: 883601 Telephone: 01-606 6699
1
J.L. Clewly Esq.,
Foreign & Commonwealth Office
London S.W.1.
CONFIDENTIAL
Dear
blewly,
PICK 21/12
Your reference
EXPORT
3 GUARA
Our reference BC/C_35/2
Date
INTEE
CREDITS
15%
ཀ ་
DE
13th October 1971
Coheed to HIUC 7/15--
ור
HONG KONG UNDERGROUND AND DESALINATION SCHEMES
...
49
You recently asked Paxman what had been meant by Stephens' remark, noted in paragraph 4 of his Record of Meeting held on 10 March 1971 when Rothschilds, GEC, and Costains called on ECGD, that "the Department would not want to see the nonsenses of the Tunnel repeated".
This question came concurrently with a call on us by Kenneth Blackwell, STC in Hong Kong and presently on mid-tour leave, and in connection with this call we prepared a short note on the Tunnel case, and on the Underground Railway and Desalination schemes which are currently under discussion. The note on the Tunnel records the problems encountered there - problems which we are apprehensive may be encountered again later in negotiations on the two latest schemes - and you may care to retain the attached copies of that and of the other two notes.
to
From our discussions with Blackwell we gain the impression that despite all that has gone before the Government of Hong Kong may still be looking to ECGD to provide aid by supporting credit on terms beyond the normally accepted commercial limits and/or by giving guarantees U.K.banks or exporters without adequate security from Hong Kong when the financial viability of the scheme on the terms is doubtful. This would entail E.C.G.D. providing funds to support the operation until such time if at all - it paid for itself.
For our part the length of credit we will consider will be determined by the Financial Guarantees Committee and, though I feel sure that the Committee will go as far as possible on this issue having regard to the volume of export business which will accrue to the U.K. if our bids are successful, it would be unwise to anticipate that terms of exceptional length would be agreed. As to the need for guarantees we shall, as we normally do in business of this nature, require to see satisfactory studies and projections of the financial aspects; if in the light of these projections the ability of the Hong Kong party responsible for the scheme to meet his obligations to the U.K.to the agreed terms is doubtful we must require that party's obligations to be guaranteed by others who in our view are sufficiently strong.
It would be in all our interests if the officers in post in Hong Kong could take any opportunity offered to get these points across
If that could be done then we to Hong Kong Government officials.
/might
No comments yet.
Private notes are available after approval.