TNAG-0637-FCO40-785-Supplies-of-electricity-for-Hong-Kong-1977 — Page 42

CONFIDENTIAL

REC

IN

DEGIT

2.51

J Ashwood Esq CREA

Department of Trade

1 Victoria Street LONDON SWI

- 8 AUG 1977

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3 August 1977

HONG KONG AND ECGD

•

I expect you will have seen Christopher Roberts' copy of Derek March's letter of 28 July to John Stewart.

2. I appreciate the points that Derek March has made about not requiring the Hong Kong Government to guarantee loans made to the MTRC for the next phase of the Mass Transit project. At the same time, I understand that the precedent of the first stage is against him (or, more precisely, Norman Thompson) and I suspect that Derek March's points could not be accommodated within the ECGD's normal rules. In order to try to focus our minds, I am enclosing a draft of a possible reply to Derek March's letter. You will see that I have made a stab at interpreting the significance of Kemp's remark to Thompson, at their meeting in June, that he fully accepted that "the present Government of Hong Kong" would never allow the MTRC to default. I hope that you and Mann in ECGD (to whom I am copying this letter and Derek March's) will feel entirely free to amend what I have written.

73

cc: F C Mann Esq (ECGD)

Mr Rumble (TRED G 4A/1)

D F Milton

Hong Kong & General Department

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