TNAG-0563-FCO40-658-Construction-of-an-underground-railway-system-in-Hong-Kong-1975 — Page 33

CYPHER/CAT A

FM HONG KONG 271200Z

COMMERCIAL IN CONFIDENCE

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ADVANCE COPY

ECGD MR STRAZI (AUS)

TO PRIORITY DOT TELNO CREDA 31 OF 27 FEBRUARY INFO PRIORITY ECGD (FOR COTTERILL), FCO (FOR STUART HKIOD).

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Mr. Hymning

CRE4 (FOR MISS WELCH).

FOR FARRY CPC FROM KINNEAR,

PANTON'S LETTER PD 3 OF 7 FEBRUARY:

.

RECEIVED IN REGISTЯY Po, 51

20 FEB 1975

HKK 21/4

MASS TRANSIT.

IN HIS LETTER UNDER REEERENCE, REPEATED TO YOU ONLY, PANTON MADE THE POINT THAT THE HONG KONG GOVERNMENT ARE UNLIKELY TO BE ABLE TO

BE IN A POSITION TO DICTATE THE CREDIT TERMS IN THE VERY DIFFERENT

CLIMATE PREVAILING NOW AS OPPOSED TO THE LAST ROUND. I AM NOT AWARE

THAT THE HONG KONG GOVERNMENT HAS MADE ANY REPRESENTATIONS ABOUT

THE PARAMOUNT IMPORTANCE OF CREDIT TERMS, AS HE SUGGEST, ALTHOUGH THOMPSON, AS I REPORTED IN PARA 7 OF MY TELNO CREDA 8, HOPES TO BE ADLE TO ATTRACT THE BEST POSSIBLE TERMS. IN THE FINANCIAL

APPRECIATION I UNDERSTAND ALLOWANCE HAS BEEN MADE FOR 40 PERCENT OF THE COST OF THE SCHEME TO BE MET BY SUPPLIER CREDIT. THIS IS DEL IBERATELY CONSERVATIVE AND THOMPSON HOPES TO GET BEWEEN 50 AND 60 PERCENT. CREDIT AND CREDIT TERMS WILL, THEREFORE, BE OF VERY CONSIDERABLE IMPORTANCE. I CAN WELL UNDERSTAND DEPARTMENTS WILL TAKE A SOMEWHAT JAUNDICED VIEW OF THE WHOLE PROJECT AFTER WHAT HAS GONE BEFORE. DESPITE THHIS, I HOPE THAT EVRY CONSIDERATION WILL BE GIVEN TO THE INTEREST OF BRITISH INDUSTRY IN HELPING IT TO

OBTAIN A FAIR SHARE OF THIS PARTICULAR CAKE. THIS IS A SUBSTANTIAL

MARKET FOR BRITISH ELECTRICAL EQUIPMENT, QUITE APART FROM THE VALUE OF THE CONTRACTS THEMSELVES ON THE E AND M SIDE. IF OUR COMPETITORS

SECURE THE BULK OF THE CONTRACTS, IT MIGHT MAKE IT VERY MUCH MORE DIFFICULT TO MAINTAIN OUR POSITION IN THE EXISITING MARKET.

KINNEAR

CCCN:- WBB CONSIDERATION EVERY