TNAG-0425-FCO40-471-Construction-of-an-underground-railway-system-in-Hong-Kong-1973 — Page 51

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well might, an ECGD backed loan for this project came to

£100 million, then at 7% this would be tantamount to a subsidy

of £20 million from the UK Government over the life of the loan.

Even then the British members of the Anglo-Italian Group

(principally GEC and Costain) believe that they are being pushed

to the limit of acceptable commercial risks in putting forward

the proposals which they are now taking to Hong Kong.

I should add that, apart from the Japanese and Anglo-Italian

Groups, there is still a German-French-British Group in the

competition with GKN providing the principal British component.

My Department would be surprised if this Group can still produce

proposals which will keep them in the competition, but the lines

of communication are open and we would of course extend the same

type of support.to them should they, despite the odds, prove a

better counter to the Japanese than the Anglo-Italian Group.

I attach copies of a series of messages I have exchanged with

the Governor to give you the flavour of the negotiation.

I am sending copies of this minute to the Foreign and Commonwealth

Secretary and to the Chancellor of the Exchequer.

Réside

Department of Trade and, Industry

1 Victoria Street

London SW1H OET

November 1973

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PW