CONFIDENTIAL
GRPS 480
IMMEDIATE
CYPHER/CAT A
:
FM HONG KONG 071045Z
CONFIDENTIAL
70
JELAVED IN
OGASTRY NG, 81
344
11
HKCI
10.411
IMMEDIATE D T I TELNO CREDA 149 OF 7TH DECEMBER, 1973. INFO E.C.G. D. (FOR FELL) F.C.O. (FOR STUART (HKIOD)) AND (FINLAYSON (EPD)).
FOR ROVCE (OPG) FROM ASTON.
M.T.S.
THERE HAVE BEEN FURTHER EXCHANGES DURING THE WEEK BETWEEN LOCAL REPRESENTATIVES AND PICCAGLI AND THE STEERING GROUP TO CLARIFY FOINTS IN THE ANGLO-ITALIAN COUNTER-BID. THEY CULMINATED
IN A FURTHER BRIEF MEETING BETWEEN KINDERSLEY (WHO RETURNED FROM TAIWAN), PICCAGLI, LEVER AND WEEDON AND
.
HADDON-CAVE AND SANDBERG YESTERDAY (6 DECEMBER). THESE DISCUSSIONS HAVE BEEN CONCENTRATED VIRTUALLY EXCLUSIVELY ON THE PROBLEM OF ESCALATION. STEERING GROUP WISHED TO HAVE THE BUILT IN'' ESCALATION REDUCED FROM 10 PER CENT BUT NOT TO LOWER THE THRESHOLD FOR SPECIAL ESCALATION, (INCLUDIED IN FORCE MAJEURE) BELOW 10 PER CENT. MAIN CONCERN HAS BEEN TO TRY TO FIND SOME WAY TO BRIDGE THE GAP, (BEING NICKNAMED THED ''DEMILITARISED ZONE
2. KINDERSLEY HAS NOW PUT FORWARD PROPOSALS, ROUGHLY ON THE LINES OF THOSE PROPOSED BY DAW, FOR AN EQUITY CONTRIBUTION TO COVER AS MUCH OF THIS GAP AS MAY BE NECESSARY. ASSUMING A **BUILT IN'' ESCALATION OF 8 PER CENT. HADDON-CAVE
HAS TAKEN THIS ABOARD WITHOUT COMMENT AND HAS SAID THAT HE DOES NOT REQUIRE ANY FURTHER INFORMATION TO ENABLE THEM TO COMPLETE DRAFTING THE PAPER FOR EXCO (IT WAS DUE TO BE COMPLETED TODAY).
3. KINDERSLEY, WHO LEFT FOR UK LAST NIGHT, WILL NO DOUBT BE EXPLAINING DETAILS TO YOU,
CONFIDENTIAL
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