TNAG-0425-FCO40-471-Construction-of-an-underground-railway-system-in-Hong-Kong-1973 — Page 180

FLASH BRASILIA

FA

262)

CPS 30.

Hr.K 2/4

CYPHER/CAT-A-

FM ECGD LONDON 242956Z

NO OL

UTION

25 x

COMMERCIAL-IN-CONFIDENCE

FED

MKIOD

TO PRIORITY TOKYO TELNOEXCED 044 OF 24/10 INFO FLASH BRASILIA (FOR COTTERILL TO PASS C.J. 1. MISSION -FLASH)

FOR FELL FROM PANTON.

ATTENDED MEETING OF FCO B OF E DTI AND TREASURY TO EXAMINE LEGALITY

OF HK GOVERNMENT GIVING GUARANTEE. FCO LAWYER HAD NO DOUBT THAT

THERE WAS NOTHING TO PREVENT THIS BEING GIVEN. THE LEGAL ENFORCEMENT

OF SUCH GUARANTEE WOULD STOP WITH THE HK GOVERNMENT AND WOULD NOT

LEGALLY COMMIT HMG TO MAKE GOOD A FAILURE OF THE HONG KONG

GOVERNMENT TO HONOUR THE GUARANTEE. HMG COULD IF IT CHOSE FORBID

THE GIVING OF SUCH A GUARANTEE. TO TAKE SUCH DRASTIC ACTION WOULD

IN THE OPINION OF FCO CAUSE CONSIDERABLE EMBARRASSMENT AND THERE WAS

GENERAL AGREEMENT THAT SUCH A STEP WAS NOT AT THIS STAGE NECESSARY

ON STRABLE. IT WAS DECIDED INSTEAD THAT SUBJECT TO THE APPROVAL

OF LIMISTELO HMG COULD INFORM THE HK GOVERNMENT THAT THEY NOTED

ACCEPTANCE OF THE JAPANESE BID NOTWITHSTANDING ITS FAILURE TO

COMPLY WITH THE TERMS LAID DOWN AND WOULD EXPECT TO SEE THE SAME

FLEXIBILITY OF APPROACH WHEN CONSIDERATION WAS GIVEN TO ANY COMPETITIVE UK/ITALIAN BID WHICH MIGHT BE MADE.

IN

DOUGLAS-HOME

NNNN

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