COMMERCIAL IN CONFIDENCE
BRITISH TRADE COMMISSION IN HONG KONG 7th Floor, Shell House, Queen's Road, Central, HONG KONG Mail Address: P.O. Box No. 528, Hong Kong Cable Address: "Uktrade Hongkong" Telephone: 230176
Our reference: 21/1Å
Your reference:
LE Farry Esq
Overseas Finance Planning Division
Department of Trade
1 Victoria Street
London SW1H OET
RECEIVED IN REGISTRY No. 51
21 January 1975
ग
سما
dear Fany,
HONG KONG MASS TRANSIT;
24 JAN1975
HKK:21/x
You will have had my telegram number Creda 8 about hass Transit. The Government's decision to go ahead immediately with this project was something of a surprise to me, as I thought there might be a pause for reflection. But with the two consortia previously interested in building a refinery and petro-chemical complex having just announced that they would have to shelve their plans for the time being, with a lot of money already spent on getting together the staff for the lass Transit Provisional Authority (all of whom have generous compensation clauses in their contracts to cover early termination) and with the scheme likely to be more and more expensive the longer it is delayed, the Government probably decided that it would never get off the ground if there was a delay, quite apart from the damage to public confidence which would be caused by a postponement.
2.
Thompson, the Chairman Designate of the Mass Transit Authority, is, as I reported in my telegram number Creda 8, well aware that it is going to be difficult to find the money. As he put it to me, he will be knocking on a lot of doors in the next 6 months. However, the Authority's financial advisers, Kleinworts and Wardles, apparently are confident that the money can be found. The reduction in the size of the scheme inevitably means that it will generate less revenue, but Thompson assured me that it will still be viable and that their estimate is that a 21 per cent reduction in revenue will be offset by 27 per cent reduction in operating costs.
3. As you know, the Authority is planning to make the individual contracts on the electrical and mechanical side sufficiently large to attract the best possible ECGD terms. I have no doubt that Ï will be questioned about this from time to time and I would be
/grateful
COMMERCIAL IN CONFIDENCE
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