TNAG-1392-FCO40-1864-Future-of-Hong-Kong-briefing-for-meetings-and-visits-1985 — Page 130

CONFIDENTIAL

29. The Treasury have resisted the extension of Hong

Kong dollar finance on fixed rate terms principally because of their fears about the longer term stability.

of the Hong Kong dollar. The Hong Kong Government and

public see this as HMG's reluctance to express full

confidence in the future prosperity of Hong Kong,

prosperity which under the Agreement we are committed

to try to maintain over the next 12 years.

30. The requirement for fixed rate finance in Hong

Kong dollars i s now a common feature of calls for tenders for public sector projects in the territory. Recently,

consortium

a

British-led

subsequently argued that HMG's

late stage to offer official

dollars (ECGD had, without

This loons a diffaitt

tendered

un successfully for the £100 million Tuen Mun Light

Rail project and has

refusal until a very

support in Hong Kong

consulting either FCO ог DTI, entered into an

agreement with other credit agencies not to provide

fixed rate Hong Kong dollar finance for Tuen Mun) have

be en a factor in their loss of the contract.

Following the loss of Tuen Mun, attention is now

focussing on a short list of three consortia bidding

for the Second Harbour Tunnel Crossing, a huge project

with a potential UK content of £145 million. Treasury

are maintaining their existing line on Hong Kong dollar finance for this project and this may well put

the British companies involved

at

serious

disadvantage.

a

We and DTI are pressing Treasury at

Ministerial level to reconsider the case.

बिहार

probum.

Can he

Treasury

prouaded?

16 September 1985

AC Galsworthy

Hong Kong Department

CONFIDENTIAL