CONFIDENTIAL
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(c)
capital programme to finance in the years ahead (in connection with e.g. water supplies, public transport, housing and the expansion of educațional and medical facilities). But this has been the situation for the past decade; earlier gloomy forecasts of inadequate financial resources to meet commitments have repeatedly been falsified by the eventual financial out-turn. It is difficult now to persuade people that the continuing expansion of the Hong Kong economy will not take care of the Colony's foreseeable needs. The estimated surplus of more than £20 million on the current budget is a case in point.
The
U.K. Government funds for this project cannot be found from money already provided in votes (as the Treasury are insisting), with the exception of the Aid Programme. ODM are resisting the use of aid funds on the grounds that Hong Kong does not qualify for capital aid and that in any case the Board of Trade aviation votes are the appropriate
source.
No suitable source of non-government funds has been identified which would not require some form of guarantee and/or a subvention from HMG to reduce interest charges to a reasonable level. In any case Hong Kong is looking for some involvement on the part of HMG in recognition of its aviation interests and for general political reasons.
(a) The case for assistance must rest firstly on acceptance of
the principle that we should assume some of the financial
responsibility where we derive so much benefit; and
secondly on the political benefits to be derived from joint
participation in such a project which would be a visible
expression of our interest in, and concern for, the Colony.
5.
There is a disposition on the part of other departments to question the considerations in (d). The first of them usually evokes
the response that there are countervailing benefits derived by the
territory from its association with us. It is indeed true that, from
CONFIDENTIAL
the nexus