Minister (C &A) Jeb 12/6
Mr Popplewell
cc Mr Wakefield
HONG KONG MASS TRANSIT SCHEME
Reference......
гору
G HKIOD
Mr. Dew
&p.a.
1. At the monthly Bankers Lunch yesterday, Mr Norris commented that, since Kleinworts were helping Mitsubishi with the financing of this Scheme, he hoped that it would succeed. I asked him whether, given the huge spurt in inflation in recent months, the Japanese would still go ahead with this Scheme on a fixed contract basis.
2. Mr Norris replied that Mitsubishi subsidiaries were all pressing the parent company to drop the Scheme, because the losses involved would be too great. Mitsubishi themselves were, however, anxious to continue: bat prestige was involved, and they treated their bid as a "lost leader". They hoped that it might be possible to re-negotiate the contract in a couple of years time. However, Mr Haddon Cave was presently adament in his refusal to modify it.
3. I commented that, given the political circumstances surrounding the contract, it would be very difficult for the Hong Kong Government to agree to renegotiate the contract. Mr Norris accepted that there would be difficulties, but observed that circumstances changed, and Mr Hadden Cave would not go on for ever. He thought it might eventually be possible to modify the contract via some kind of gentleman's agreement, rather than formally.
4. This is an interesting indication of the way the thinking of the parties concerned may be going.
touages Walzon
R Burges Watson
20/6
11 June, 1974
C.L. TO
To
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D.BT.
ECGD
Mi Cotterice
F.c.o.
Far Eastern Dept./
(69
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