TNAG-2259-FCO40-3255-Hong-Kong-Port-and-Airport-Development-Strategy-(PADS)-Brit-1991 — Page 207

PERSONAL AND CONFIDENTIAL

Whitehall Tactics

5.

We have agreed to establish an informal

inter-departmental group here with FCO, DTI and ECGD

representatives with the aim of coordinating our approach and providing early warning of problems which will need

Ministerial attention. We decided not to include the

Treasury in this group at the outset, since a key

tactical consideration is how best to ensure the

availability of ECGD cover. I enclose a note which the DTI produced for one of our meetings. I should make it

clear that this was designed to address the maximum likely call for cover, so the estimates of business are

at the optimistic range of what we hope to achieve.

6.

-

Although there is still a good deal of headroom in ECGD's overall ceiling for Hong Kong

about £900 million

- and in the global business budget, the requirement to have Treasury authority for individual indications and commitments of £100 million or more and to have authority

for cumulative annual commitments in any one market of £200 million or more, could be obstacles, especially

given the likely requirement for cover on Black Point as

well. ECGD believe and we agree that our best strategy will be to take the issue to Ministerial level when we have an actual rather than hypothetical proposal

and when the implications of a refusal will be more stark. Provided the headroom and global budgets will not be breached, DTI and ECGD believe that the Treasury will

be on the defensive in arguing that the exposure should

not be accepted. There is no doubt, however, that the Treasury will make a major issue of it, that there will be a fight, and that it could take some time to resolve.

PERSONAL AND CONFIDENTIAL