TNAG-0423-FCO40-469-Construction-of-an-underground-railway-system-in-Hong-Kong-1973 — Page 32

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DEPARTMENT OF TRADE AND INDUSTRY

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The Rt Hon Anthony Barber TD MP

Chancellor of the Exchequer

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You will recall the correspondence last September about our opening bid in the negotiations for the major contract - for the Hong Kong Underground Railway project. John Davies letter to you dated 25 September covered a paper by officials describing the outstanding importance of the project to Britain.

The negotiations on the credit terms necessary have now reached a crucial stage. The Hong Kong Government Steering Committee will this week evaluate the bids and recommend which groups or consortia go forward to the final round. It is touch and go whether the British group will be selected. Our information is that at least two of our competitors are offering terms substantially better than those of the British group. The main differences are the dates of repayment of principal and capitalisation of interest. We have promised to let the Hong Kong Government know this week whether we can offer terms similar to those of our competitors.

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In my view it is vital that we should succeed here. would be highly damaging to our business reputation through- out the world not to secure this major project in one of our dependent territories. The project is also of great importance in its own right since the value of British exports and services would total £250-£300m. Even more important, however, is the need to establish UK industry in the enormous market for urban rapid transit business throughout the world. We badly need a breakthrough into this business and if we cannot succeed in Hong Kong we shall be most unlikely to get a foothold in this field elsewhere.

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