TNAG-1061-FCO40-1311-The-Kowloon-Canton-Railway-1981 — Page 15

00 HONG KONG (DESKBY 170100Z)

GRS 200

CONFIDENTIAL

DESK BY 17010OZ

ра

CGF

24/10

27

FM D T | 16160OZ OCT 81

TO IMMEDIATE HONG KONG

TELEGRAM NUMBER CREDA 188 OF 16 OCTOBER

PERSONAL FOR MARCH FROM DURIE PEP

YOUR CREDA 146 KOWLOON CANTON RAILWAY

дот

TRED

Hi

YOU WILL APPRECIATE THAT IN THE LIGHT OF THE TOTALITY OF SUPPORT

NOW BEING GIVEN TO METCAM OVER ITS HONG KONG BUSINESS WE WOULD FIND

IT MOST DIFFICULT IF WHAT WAS A CASH CONTRACT WERE TO NOW TURN INTO

A CREDIT ONE. THERE IS THUS NO GUARANTEE THAT WE WOULD BE ABLE TO

RESPOND POSITIVELY TO SUCH A REQUEST WERE IT TO BE MADE AND, GIVEN

THE PROBLEMS THAT ANY SUCH REQUEST WOULD CAUSE, WE WOULD HOPE THAT

THE SUBJECT CAN BE AVOIDED IF AT ALL POSSIBLE.

IT IS DIFFICULT TO FIND ANY READILY USABLE ARGUMENT WHICH WOULD PUT

THE HONG KONG GOVERNMENT OFF CREDIT IF THIS WAS A COURSE THEY HAD

DETERMINED TO PURSUE. I AM NOT SURE TO WHAT EXTENT THE HONG KONG

GOVERNMENT REALIZE THAT THE TERMS BEING OFFERED TO THEM BY MET CAM ARE EXCEPTIONALLY FAVOURABLE, AND ALTHOUGH YOU PROBABLY CANNOT REFER TO THIS DIRECTLY, CREDIT TERMS FOR THE KCR AT THIS STAGE WOULD RADICALLY ALTER THE CAREFULLY BALANCED KCR AND ISLAND LINE DEALS.

OTHER FACTORS, SUCH AS OUR RELUCTANCE TO SEE A CASH CONTRACT CHANGE TO CREDIT, THE DELAYS WHICH CONSIDERATION OF SUCH A REQUEST

WOULD CAUSE, ARE RELEVANT BUT HARDLY PERSUASIVE. YOU WILL NO DOUBT

DISCOURAGE THE HONG KONG GOVERNMENT FROM ASKING THE QUESTION.

HOWEVER, IF THEY DO YOU SHOULD PLAY FOR TIME, INDICATING HOW

DIFFICULT YOU THOUGHT IT WOULD BE, BUT UNDERTAKE TO CONSULT ECGD.

NNNN

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