CONFIDENTIAL
Trafalgar House has already applied for support for its share of an Anglo Japanese bid for the main bridge (Lantau Fixed Crossing), which would involve
new exposure of about £400m. ECGD currently awaits EGC approval to give a positive indication of support. Further sizeable applications for other
elements of the airport project are likely to follow and there are high hopes
that UK companies (notably GEC/Alsthom) will win significant business for China
Light & Power's new power station development at Black Point. Here again the
scale of potential exposure suggests EGC authority will be required before an
indication of support can be given. If officials are unable to agree on such
cases the matter will need to be resolved by Ministers collectively.
We fully recognise the need for decisions to strike the right balance between
the national interest, risk exposure and concentration, but we also recognise
that we have a strong political commitment to Hong Kong and that there are
excellent business prospects.
On the political front there is a special dimension because of our
responsibility as sovereign power until 30 June 1997. We cannot afford not to
be seen to be supporting our own contractors at a time when confidence in Hong
Kong is rising following the signing of the airport MoU and the Prime Minister's
visit, and when the economic indicators point to a strong rise in GNP. a "
in
"Given the amount of cover currently available and the amount which will become
available as repayments on existing contracts are made, the Foreign Secretary
and the Secretary of State for Trade and Industry believe that cover should be
available to support transactions in Hong Kong which satisfy ECGD's underwriting
judgement and are accepted for PMS purposes as in the national interest, that
ECGD should be able to indicate accordingly and that Ministers should be free to
speak positively about Government support."
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TO IMMEDIATE BTC HONG KONG TELNO OTTER 329
OF 04170OZ NOVEMBER 91
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