1/10.
Mr. Wiford
Miss Deas
Private offise
CONFIDENTIAL
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Since 1964 plans have been laid in Hong Kong for the extension
of the Kai Tak runway and the development of the passenger handling facilities in preparation for the advent of Jumbo aircraft. In 1967 the Governor approached HMG for assistance in the cost of construction then estimated to cost about £6.2 million. At first
this request was put in the form of an application for a grant of £24 million but subsequently it was altered to a request for a loan of £6 million at an interest rate of 7% repayable in fifteen years. The Hong Kong Government's argument for seeking a loan from HMG as opposed to financing the whole work themselves is based on the very considerable capital expenditure to which they are already committed over the next few years when the money for Kai Tak would also be
required.
They
2. This request fell on very stony ground for a variety of reasons. The British economy was in a particularly unhealthy state; business and trade in Hong Kong were booming and the Colony already had
substantial reserves in London; the Colony's revenue account was in
continuing and increasing surplus above even the expectations of
the Financial Secretary. When the matter was discussed at official
level in Whitehall the Treasury were not wholly opposed to money being provided on the condition that it was not "new" money. would not have objected to the money being found by ODM from aid funds, but ODM categorically refused on the grounds that Hong Kong is not "aid worthy" by their statistical criteria. Another possibility in view of the entangled question of landing rights at Hong Kong, which the Board of Trade control at great profit to UK interests, was that the Board of Trade should find the money. This, they said, they could not do. In fact the FCO was the only real advocate for Hong Kong in the matter, but we could not prevail though a final negative answer was never given to Hong Kong. When the then Secretary of State was in Hong Kong in April he told the Unofficial members of the Governor's Executive and Legislative Councils that if the financial situation in 1971 justified it his Government would be prepared to look at the matter again then.
13.
CONFIDENTIAL