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2

(contd)

2.

2.

(c)

The auswer to the larry Mu. Passy's Quecimis in

20 Jan. indicated Fuat a airport-war

windved. 3.

Lecoud

(a)

(e)

the proposal for an airport at Macau is, we understand, supported not only by Leandro but also by :

(i)

-

some (but not all) of the syndicate whose gambling and hydrofoil services would gain from the project and who may be able to drum up some support from the Communists; and

(ii) those airlines at present excluded from or unsatisfied by Kai Tak, in particular, SAS, K L M and Air France;

Kai Tak on current estimates, will run out of space for existing rights-holders in the 1980s and therefore some other airport capacity will have to be created in order to satisfy customers; meanwhile, the cost and pollution objections to Kai Tak are unlikely to diminish;

the proposal considered in the consultancy study is not for a second airport, but rather for a replacement airport for Kal Tak;

(f) if Macau establishes any kind of airport, there

will be air traffic control problems, which will involve coordination between us and Macau and probably the Chinese, if only the latter as a sleeping partner.

Turning to tactics, therefore, our own advice would be that you either continue to delay replying to

Dim the Portuguese Note as you have seen from para 5 of

11/3.

Alan Donald's letter of 13 October, there is at least a possibility of Leandro leaving Macau at the end of this year; or reply along the lines of para 2 of Denys Roberts' letter to the Portuguese Consul-General here of 19 November. I enclose a draft text.

CC

BT C (Mr R WH Davies)

Chanceries

Encls:

:

Peking

Lisbon

ever,

Charles

(C D S Drace-Francis)

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