TNAG-0426-FCO40-472-Construction-of-an-underground-railway-system-in-Hong-Kong-1973 — Page 50

HONG

KONG GOVERNMENT

OFFICE

6

GRAFTON

STREET

LONDON. W1X 3 L B

Cur ref: 511/1/1

14th December, 1973.

The Editor,

Financial Times,

Bracken House, Cannon Street,

London E.0.4.

Sir,

I refer to the article in your Dec. 12 issue under the headline "Japan in talks on €416 million Hong Kong underground"

Your correspondent stated that the Hong Kong Government's decision to negotiate with the Japanese consortium on the possibility of concluding a contract to build the underground railway "must be seen against the recent discontent in Hong Kong, particularly as a result of the dilatoriness of the Treasury in offering Hong Kong a new deal guaranteeing its huge London-held reserves at present against further sterling devaluation..." This is incorrect. The Hong Kong Government's decision on the mass transit milway project was based entirely on commercial considerations, having regard to the need to enter into a contract which offered satisfactory torms. The sterling question has never been linked up in any way with the Hong Kong Government's consideration of the project, and to talk of "Hong Kong's repeated requests for a renewed (sterling) agreement is, to say the least, misleading.

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