TNAG-1660-FCO40-2308-Hong-Kong-Kowloon-Canton-Railway-Corporation-(Amendment)-Ord-1987 — Page 50

CONFIDENTIAL

6. THE KCRC S, OF COURSE, A STATUTORY AUTHORITY SET UP IN 1983 TO TAKE OVER THE ROLE OF THE GOVERNMENT DEPARTMENTS RESPONSIBLE FOR THE RAIL LINK WITH CHINA, WHILE THERE HAVE BEEN SOME MUTTERINGS IN RECENT MONTHS ABOUT KCRC PRIVATNSATION, WE DO NOT SEE THAT THE CASE IS PARTICULARLY STRONG, AT LEAST AT THIS TIME. (N FACT, THE MASS TRANSIT (MTRC) #S PROBABLY A BETTER CANDIDATE

WE FOR PROVATISATION HAVING REGARD TO WTS CAPITAL STRUCTURE.)

AN ANY ALSO NEED TO CONSEDER WHAT THE CHINESE REACTION MIGHT BE. CASE, THE CHAIRMEN OF THE KCRC AND MTRC HAVE RECENTLY WRITTEN TO THE FINANCHAL SECRETARY RECOMMENDING AN AMALGAMATION OF THE TWO CORPORATIONS. CONSIDERATION OF THIS SUGGESTION WITHIN THE ADMINISTRATION PUSHES THE PRIVATISATION ISSUE INTO THE BACKGROUND FOR THE TIME BEING, THOUGH AMALGAMATION WOULD HAVE A BEARING ON OUR PLANS FOR KCRC ## THE FUTURE. BUT IT IS EARLY DAYS YET.

WILSON

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HMLNAN 4222

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ико

FED

MR MAUD

MR MCLAREN

CONFIDENTIAL