CONFIDENTIAL
HONG KONG : ECGD COVER
Notes for a Meeting on 18 September 1991
1.
Review of the Present Position
2.
Current ECGD exposure and commitments (Airbus million) in Hong Kong: approx £2.1 billion
-
£298
Current market exposure control figure : £3 billion
Current headroom : approx £900 million
Global business budget for 1991/92 : £1.7 billion (of which £360 million hs been committed so far)
Treasury authority is required for individual indications and commitments of £100 million or more, and for cumulative annual commitments in any one market of £200 million or more. The Treasury will probably bring exposure in China into the discussion - (exposure and commitments there currently total £1.58 million).
The Likely Call for Cover Over the Next 2/3 Years
See Annex A, which attempts a rough indication of the projects concerned, their size and likely timescale. This suggests a possible total call for cover over the next 2/3 years of around £2 billion (project value), which translates into a substantially higher DML figure for ECGD - possibly around £3.5 billion. The earliest project which is likely to require a specific decision is the Lantau fixed crossing, where bids are required by mid-December.
3.
(a)
(b)
(c)
(d)
Tactical Questions
Is it desirable to involve HMT (Mr Mortimer?) at an early stage? Should we proceed through the usual channels of EGC, or should the matter be elevated straight away or at any rate at an early stage?
When should Ministers be formally brought in, and in what manner? When should No 10 be involved?
Is it desirable to set out at an early stage the aggregate call for cover that is likely over the next 2 or 3 years? The figures are uncertain and could generate increased alarm; alternatively it can be argued that it is desirable/essential to be clear about the wider
background.
Is it desirable to introduce the notion of a target volume of business?
No comments yet.
Private notes are available after approval.