CONFIDENTIAL
It would be a significant boost to confidence in the
airport project, and to British companies' chances of being successful, if we were able to indicate now that, in
principle, ECGD cover will be available før the series of
contracts under the overall airport. The Foreign Secretary appreciates that there are concerns about ECGD's high
exposure to Hong Kong (and China) and that the discipline of
PMS has set new standards of assessment of risk. But Hong
Kong has been one of the most successful markets for ECGD
over the years. And if agreement with China over PADS can be reached, the probability of any default will surely be
minimal.
The Foreign Secretary considers that this is a
significant step we could take to show our confidence in
Hong Kong and in the airport project and recommends that it
should be explored further, once we are clear about the
outcome of our talks with the Chinese Government about the
our airport. Any such step should be without detriment to other major projects in Hong Kong such as the power station. expansion programme of China Light and Power where British companies are also well placed to win substantial work.
I am copying this letter to Jeremy Haywood (HM
Treasury), Martin Stanley (DTI), Suma Chakrabarti (ODA) and Sonia Phippard (Cabinet Office).
A-B
S L Gass
PIGABE/3
CONFIDENTIAL
888-700
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