TNAG-0425-FCO40-471-Construction-of-an-underground-railway-system-in-Hong-Kong-1973 — Page 158

CONFIDENTIAL

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have been persuaded by their officials to modify this to a

proposal for a "warning shot" on the question of a guarantee.

(Sir G Howes letter to the Secretary of State of 30 October).

There is no need to go too deeply into the arguments against this.

It is already to some extent overtaken by the fact that the

Anglo/Italian bid is now ready and will need all the help it can

get. We do however need to discuss the next steps with the DTI

at official level. We will also need to contact the Governor,

probably in a personal message from Mr Royle. The form of this

message will however depend partly on how much explaining we

have to do of the background to the Anglo/Italian bid; and this

will depend in turn on whether Mr Kindersley can agree with his

colleagues any changes to the bid itself.

7.

I therefore submit a draft reply to Sir G Howe, and a draft

follow-up letter which I would send to Mr Royce, the new DTI

Under-Secretary concerned. A draft telegram to the Governor will

be submitted when the form of the bid is decided.

6 November 1973

Cc:

Sir D Watson

Mr Finlayson

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Hong Kong and Indian Ocean Department

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CONFIDENTIAL

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