NOTE FOR FILE
X
MONG KONG UNDERGROUND
Mr Rosa (EGCI) and ir Curry (RIA) called on Mr Price and me yesterday.
Their main purpose was to report that on the construction side the interest had narrowed to some 4 or 5 firus among whom Mitchell Engineering who had led the OCI mission and Costains who were constructing the Cross Harbour tunnell seemed the most likely participants. In the quipment side the OEC Oroup contained within its structure companies which could provide the rolling stock, the electrics, the signalling and the ventilation and the Group seemed a natural leader for this side. The consultants, Freeman Fox, were likely to be retained by the Hong Kong Government as overall managers and co-ordinators.
Pollowing a visit to Hong Kong by a Er Bird of GEC and some informal discussions he had had there with Shepherd representatives of the industries had met and decided to ask a team of two financial experts, Mr Forsyth of GFC, Mr Newall of Costains, to work out specimen financing proposals in conjunction with the City (Rothschilds) and "COD which might be submitted to Hong Kong in order to reinforce the favourable recommendation made by the "ransport -dvisory Committee and to influence the Hong Kong Governsent to agree the scheme and to award the contract to the UK. They were convinced that Japan would come up with comprehensive proposals including finance and sight get their bid in first.
Ve discussed sone of the formidable difficulties which the team would face in earrying out their assignment but we welcomed the thinking which lay behind it and offered to give any advice and help we could. So said that unfortunately whitehall was not yet ready to formulate any sort of financial frame of reference within which they could put forward confidently a range of possibilities out of which a basis for negotiation might emerge.
The question of possible aid was raised. Ye nnid we say no prospect of Hag offering any form of direct financial assistance towards this project. Indeed, in view of the amounts involved they might find there was a limit to what the City and industry was prepared to ear-aark for financing it with or without guarantees. A significant contribution towards the cost from Hong Kong itself was a sine qua non as well as its involvement either as contracting party or as guarantor.
Car callers said they would like to pay another visit and report progress when the tean had narrowed down financing possibilities and to discuss then how they could most effectively be put before the Hong Kong Government.
Mr Robins EPD
Mr Vatson OPG
yr R Jones Tay
Mr Laird FCU
Mr V Chapaan ECGD
A F Tons CRE2
12 February 1971
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