TNAG-0426-FCO40-472-Construction-of-an-underground-railway-system-in-Hong-Kong-1973 — Page 159

IMMEDIATE

PHER/CAT A

APS 130

F4 FCO 102320Z

DEDIP

SECRET

Hkioi)

(HKIOD).

П

n

352

"//v

川

2

1

Goodbyellow

keep cop

then PIA

SECRET

DESKBY 118100Z

TO IMMEDIATE GOVERNOR HONG KONG TEL NO 1264 OF 10 DECEMBER 1973

YOUR TELEGRAM NO 1417: MASS TRANSIT

FOR GOVERNOR PERSONAL FROM SECRETARY OF STATE FOR TRADE AND INDUSTRY

I HAVE LOOKED AT YOUR SUGGESTION TO THE FOREIGN AND COMMONWEALTH

SECRETARY FOR BRINGING THE ANGLO-ITALIAN CONSORTIUM'S PROPOSALS WIT-

HIN THE CEILING SUGGESTED BY THE STEERING GROUP, BUT CANNOT RECOMMEND

IT HERE. A GUARANTEE WOULD COMMIT THE UKG OVER A PERIOD OF YEARS

TO PUT UP PERHAPS POUNDS STERLING 36-40 MILLION AS, IN EFFECT, A GRANT-IN-AID TO HONG KONG. HEDGING MIGHT GET US OUT OF IT, BUT,

AS YOU HAVE RECOGNISED, ONE HAS TO HOLD TO THIS KIND OF PROMISE.

THIS LEAVES OUT OF ACCOUNT THE PROBLEM OF PERSUADING THE ITALIANS

TO PUT UP THE POUNDS STERLING 60 MILLION ODD GUARANTEE NEEDED FROM THEIR SIDE. FINALLY, WHATEVER WE MIGHT SAY, A PRECEDENT OF INCAL- CULABLE EFFECT WOULD HAVE BEEN CREATED AND THIS IS UNACCEPTABLE. I MUST ASK YOU TO DO EVERYTHING POSSIBLE AS FAR AS THE ANGLO

ITALIAN CONSORTIUM IS CONCERNED, HONG KONG HAS MUCH TO GAIN IN

EUROPE AND THE PUBLIC REACTION BOTH HERE AND ON THE CONTINENT

WOULD BE ONE OF VERY CONSIDERABLE DISAPPOINTMENT IF THIS VERY FAIR

BID WAS REJECTED.

DOUGLAS-HOME

FILES,

HD HKIOD

HD TRED PS

PS/PUS

PS MR ROYLE

SIR D WATSON

MR YOUDE MR MARSHALL

SECRET

COPIES TO:

PS TO SECRETARY OF STATE FOR

TRADE AND INDUSTRY DTI

MR D N ROYCE DTI

VICTORIA STREET