TNAG-2410-FCO40-3504-Hong-Kong-Port-and-Airport-Development-Strategy-(PADS)-Brit-1992 — Page 97

HKA

ZCZC

EJLNAN 5292 RESTRICTED PP HKBTC

PP PEKIN

FM EXCED TO HKBTC

2915OOZ JUL

GRS 700

RESTRICTED

FM ECGD

TO PRIORITY BTC HONG KONG

TELNO EXCED 003

OF 2915OOZ JULY 92

AND TO PRIORITY PEKING

FOR DAY FROM PENTECOST

AIRPORT PLATFORM

153

182/3

متعال سالا

3117

け

31

YOUR HNTRA 199 AND FAXED LETTER FROM ALLEN (PAA) REFERRED TO ECGD FOR ACTION.

PLEASE EXPLAIN TO ALLEN THAT THE MINISTER IS NOW (NOW) TRAVELLING N CHINA AND IS OUT OF TELEGRAPHIC CONTACT. BEFORE HE LEFT PEKING HE AGREED THAT YOU SHOULD BE INSTRUCTED TO REPLY. PLEASE THEREFORE MAKE THE FOLLOWING POINTS.

A ECGD ARE IN NO DOUBT WHATEVER ABOUT THE IMPORTANCE OF PADS TO THE FUTURE OF HONG KONG. THEY HAVE MADE THIS CLEAR IN THE SUBSTANTIAL INDICATIONS OF SUPPORT THEY HAVE GIVEN UK APPLICANTS FOR COVER FOR IMPORTANT AIRPORT CONTRACTS (EG THE TSING MA BRIDGE AND THE NORTH LANTAU EXPRESSWAY). EQUALLY ECGD AND THE DT ARE WELL AWARE OF THE CRITICAL IMPORTANCE OF THE SITE PREPARATION CONTRACT TO THE PROJECT AS A WHOLE AND THAT IT IS THE LARGEST CONTRACT WHICH THE PAA (AS DISTINCT FROM OTHER HONG KONG AUTHORITIES) WILL AWARD.

B ON THE OTHER HAND, ALLEN WILL FOR HIS PART UNDERSTAND THE CONSTRAINTS WITHIN WHICH ECGD HAVE TO OPERATE, WHICH HAVE BEEN EXPLAINED TO HIM AND IN DETAIL TO DUNDAS, HIS FINANCE DIRECTOR. THIS MEANS, IN PARTICULAR, THAT IT WOULD NOT (NOT) BE SENSIBLE FOR ECGD TO COMMIT FINITE RESOURCES TO A CONTRACT WHICH MAY NOT (NOT) BE LET FOR SOME TIME, BEFORE IT KNOWS WITH ANY CERTAINTY WHAT LEVEL OF SUPPORT WILL BE REQUIRED.

C ALLEN HAS ALREADY ACKNOWLEDGED THAT SUPPORT FOR THIS CONTRACT MUST DEPEND, INTER ALHA, ON A SATISFACTORY SECURITY STRUCTURE. ECGD HAS MADE IT CLEAR THAT IT WILL EXAMINE THE FINANCING PLAN WHEN IT IS MADE AVAILABLE.

D ONCE WE KNOW EXACTLY WHAT LEVEL OF SUPPORT WILL BE REQUIRED, ECGD WILL BE READY TO CONSIDER CONSTRUCTIVELY THE EXACT TERMS, TAKING ACCOUNT OF THE POINTS IN ALLEN'S LETTER TO MR NEEDHAM AND THE POSITIONS ADOPTED BY OTHER EXPORT CREDIT AGENCIES. HE SHOULD BE IN NO DOUBT HOWEVER THAT IT WOULD BE UNREALISTIC TO EXPECT CREDIT BEYOND EIGHT AND A HALF YEARS. THIS IS THE MAXIMUM PERMITTED FOR SUCH A PROJECT IN HONG KONG UNDER THE OECD CONSENSUS. CHINA IS ELIGIBLE FOR TEN YEARS CREDIT, BUT, AS ALLEN KNOWS, HIT WOULD BE CONTRARY TO HMG'S POLICY TO PRESENT HONG KONG AS IF IT WERE CHINA. UNDER THE CONSENSUS TWELVE YEARS IS AVAILABLE FOR POWER STATIONS ALONE.

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