CONFIDENTIAL
7.
The Hong Kong Government first applied for a grant but in 1968 were persuaded to change this into an application for a loan to finance the runway extension on favourable terms to be negotiated, in recognition of the United Kingdom's own aviation interest in the projected development. The Hong Kong Government proposed to finance the remaining improvements (£7.62 millions)
out of its own reserves.
8.
•
Because Hong Kong is U.K. territory H.M.G. is responsible for Hong Kong civil aviation matters in the International Civil Aviation Organisation (I.C.A.0.) There is therefore
a responsibility on us to ensure that Kai Tak is maintained at
a standard capable of meeting reasonable requirements in accordance with I.C.A.0. regional plans.
9. Moreover after London Hong Kong is at present the most
valuable international traffic point remaining within our
It is valuable first because of the
responsibilities.
revenue derived by BOAC from services to and from Hong Kong,
and second through the important concessions in traffic rights secured for British air lines in exchange for Hong Kong traffic
rights granted to air lines of other countries in air services
negotiations.
10. For these reasons we have always supported Hong Kong's
application. But after protracted negotiations at official
level with other Ministries it was clear that there could be no
prospect of obtaining a loan of such magnitude from Government
funds. The Treasury made it clear from the outset that any
assistance would have to come from funds already voted and
pointed their finger at the O.D.M. The latter have taken a
stand in principle that affluent Hong Kong cannot benefit (except very marginally) from the aid programme and pointed their finger at the Board of Trade, with its votes for the
development of British aviation interests overseas. But the
CONFIDENTIAL
/Board