ACEIVED N
No.51
HKK 21/4
15
서
n
B ser
Copy to Do Finlayson
F.R.D
жиг
Nr Kem
ھے
GMAV12.29 ECGD HQ C LDN KEY +8023031+
HX3031 UKTRADE
ECGD HQ C LON 883601
TO UKTRADE HONGKONG
EXCED 00525
FOR ASTON FROM COGGINS MASS TRANSIT SCHENE YOUR EXCED 3.
1.
SECRETARYS DISCUSSIONS WITH OZU ABOUT JAPANESE PROPOSALS CORRECTED INFORMATION RELAYED TO YOU IN OUR EXCED 2 AND TOOK US RIGHT BACK TO THE BASIS SUGGESTED BY MITI BEFORE NOVEMBER DISCUSSIONS IN LONDON.
2.
SALIENT POINTS OF JAPANESE PROPOSALS AS NOW STATED ARE:
A. CREATION IN HONG KONG BY JAPANESE CONSORTION OF WHOLLY OWNED SUPSIDIARY WITH CAPITAL OF US DOLLARS ONE MILLION.
B. LOAN BY JAPANESE BANKS TO NEW COMPANY OF ABOUT US DOLLARS FOUR HUNDRED MILLION TO BE REPAID FROM END OF YEAR 6 CPREDICTED BY JAPANESE AS COMPLETION OF FIRST FOUR STAGES) THROUGH TO YEAR 19 AND BEARING INTEREST IN BRACKET 6 POINT. 3 TO 7 POINT O PER CENT C. NO INTEREST TO BE PAID DURING CONSTRUCTION PERIOD.
D.
INSURANCE COVER AFFORDED TO JAPANESE BANKS AND CONSORTIOM TO BE OF INVESTMENT NATURE IE COVERING WAR EXPROPRIATION AND TRANSFER DELAYS AND NOT REPEAT NOT COVERING SIMPLE NON REPAYMENT OF LOAN ARISING FROM GOVERNMENT OR TRANSIT AUTHORITY'S REFUSAL OR INABILITY TO PAY. 3.
ON POINT COZU WAS NOT ABLE TO BE SPECIFIC ON WHETHER PROPOSALS WERE TO WAIVE PAYMENT OF INTEREST ACCRUING DURING CONSTRUCTION PERIOD OR WERE MERELY TO DEFER PAYMENT UNTIL OR AFTER COMPLETION WITHOUT CHARGING ANY INTEREST ON DEFERRED AMOUNTS OR WERE TO DEFER PAYMENT AND CHARGE INTEREST FOR CREDIT GIVEN ON PAYMENTS SO DEFERRED. ONLY THE LAST IS TRUE CAPITALISATION AND EITHER OF FIRST TWO COURSES INVOLVES GREATER OR LESSER DEGREE OF SUBSIDY. 4.
MACHINE FAULT
C
OZU WAS ALSO NOT INFORMED ON REQUIREMENTS FOR GUARANTEES. SINCE MITI WILL NOT BE COVERING SOLVENCY LOSSES THIS MATTER NOT REALLY MITI CONCERN. OZU BELIEVED NEW SUBSIDIARY WOULD USE LOAN TO PURCHASE BONDS BUT WHOSE BONDS AND WHAT PROTECTION THESE ( TQUIDEABEORNIOR QUORARDEEST WEUL WONDD BERRMVOSVED CURE. OZU WAS
5.
APART FROM POINT C ABOVE JAPANESE PROPOSALS MIGHT HAVE BEEN FRAMED TO' PARALLEL OURS.
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