The Minister for Trade
& Consumer Affairs
DEPARTMENT OF TRADE AND INDUSTRY
The Rt Hon Sir Alec Douglas-Home
KT MP
1 VICTORIA STREET
LONDON SWIH OET
TEL 01-222 7877
268
TAKLOD for draft suply.
A. Semelaing of Slale
PS/Mh Royle bind. Watson /in Yonde
Secretary of State for Foreign and
Commonwealth Affairs
30 October 1973
In Wilford IFED. FRED
sily
In the
Dee
autemos in
lA
HONG KONG MASS TRANSIT SYSTEM
I have been told that the Hong Kong Government have accepted as valid a bid for this contract made by the Japanese consortium. This they have done even though the Japanese have required a guarantee of repayment from the Hong Kong Government contrary to one of the essential conditions laid down by the Hong Kong Government themselves.
I am sure that, at the right time, we must make the greatest possible use of this relaxation by the Hong Kong Government in favour of the Japanese, in order to reinforce the counter offer from the British or Anglo/Italian Group. But I am concerned that silence on our part now might be held to imply that a Hong Kong Government guarantee carries no implications for HMG. This, as you know, is not the case. Should we not, therefore, fire a warning shot, making it clear that the reason is our concern with the possible reprecussions of the guarantee on HMG and not an attempt merely to exert pressure in favour of the UK bid? I hope that you will agree that a message in this sense should be sent to the Hong Kong Government.
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