TNAG-0423-FCO40-469-Construction-of-an-underground-railway-system-in-Hong-Kong-1973 — Page 41

CONFIDENTIAL

150

Treasury Chambers Great George Street London SW1P 3AG

Telephone 01-930 1234 ext

565

K M Wilford Esq CMG

Foreign and Commonwealth Office Downing Street

London SW1

Acar Nichael

143) 152)

HONG KONG MASS TRANSIT SYSTEM

9 July 1973

See reply PLA Pla Ass

"/2

Andrew Stuart wrote to Ronald Jones on 4 July about ECGD's latest proposals for financing the UK bid. I note that FCO supports the proposals as being necessary to keep the UK consortium in the running for the contract. But the political implications are also important, and I have been asked to seek a wider expression of FCO views on this aspect, and should be very grateful for your help.

2. You will recall that Ministers gave provisional approval last autumn to UK participation in the project, subject to later consideration of the terms. At the time, broad consideration was given to the political risks involved, although this was directed mainly to the later stages of the project for which repayment would not have been due until well after 1997. This is reflected in paragraph 13 of the paper which the Secretary of State for Trade and Industry circulated to his colleagues on 25 September last.

3. This was sufficient at the time, but we are now concentrating on the first four stages of the project for which on present estimates repayment will be complete in 1993. I am sure you will agree that the political risks must be carefully evaluated, given the large amount of public money which will be at stake if the UK bid is successful. Much of the system will run in the New Territories, and although the lease does not expire until 1997 there are bound to be uncertainties in the preceding years and these could affect loan repayments. I should be grateful for your considered assessment of these risks and your view of their acceptability Cas quiche,

Possible please).

as

cc K W Cotterill Esq

ECGD

FW Glaves Smith Esq DTI

RE Radford Esq FCO/ODA

A L Ryan Esq B/E

Что Your sinceres

Hesla Bookroyd

Mrs E H Boothroyd

CONFIDENTIAL