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CONFIDENTIAL
Kong Government wide open to allegations that Britain was attempting to influence the allocation of tenders for the final project. It would therefore be completely unacceptable to the Hong Kong Government. He did not doubt that the Financial Secretary would also take this view.
7. The Director of Civil Aviation is in the UK at present and the Financial Secretary will be here later in the month. However in view both of the practical and political considerations outlined above it may not be considered worth battling for ODA funds for this project. The Governor's own proposals for approximately £1 million of aid (mostly for the Polytechnic but including £200,000 for airport training aids) are also relevant in this context.
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8. Mr Thomson suggested, when I called on him, that further consideration should be given in London to granting soft loans in connection with airport development. This would be advantageous to Hong Kong and especially to the Civil Aviation Department since development would not then be held up by the Financial Secretary and repayments could be financed from airport receipts. For the UK there would be political advantage in the loan which could be extended without risk and could, presumably (although Mr Thomson did not say so) be linked to UK participation.
9. I think this is rather different from payment of consultancy fees. Much larger sums would be involved and the argument could be made that this was a desire by the UK - as Administering Power to give tangible assistance to Hong Kong development. It would be better than no aid at all for Hong Kong which, it is conceded, her wealth precludes. It would also acknowledge the importance attached to Kai Tak in the BOAC air chain. The idea might be worth pursuing again.
10. I attach a draft letter to Mr Glaves-Smith for Mr Wilford's signature.
7 September 1972
My Goaxatie
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M Goodfellow