CONFIDENTIAL

Reference....

HKK 182/1

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23.9

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Mr

Mr Clift

POSSIBLE NEW AIRPORT FOR HONG KONG

RECEIVED IN RATASTEL NO. KI 24 SEP ROO

DESK OSTA.

INDEX

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825.9.

Aw 2119

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12

1.

The Governor, in his letter of 11 September, asked for lan objective outside view on the siting of a replacement airport for Kai Tak across the Chinese border. I submit a draft reply agreeing with the conclusions of the background paper which favour the site at Chek Lap Kok on Lantau Island.

2. A report by the Hong Kong-based Andrew Jean and Associates in September 1979 set out the argument for a new joint Chinese/Hong Kong airport on Deep Bay near Shenzhen, just across the border from the New Territories. The Hong Kong terminal would be placed across the Shenzhen River on the Hong Kong side, while the Chinese terminal, runways and all services would be in China.

3. Details of this report leaked out to the "South China Morning Post" which inferred, in an article of 4 January 1980, that the project was all set to be approved by HMG. A story in "The Times" of the same day stated (erroneously) that the Chinese had already approved the scheme. The initial Chinese response to this was cool, but they are evidently considering the idea as Gu Mu raised it in discussions with Sir Philip Haddon-Cave in Peking in May. The scheme is espoused by a minority for ExCo members, including Sir S Y Chung.

4. There are several obvious disadvantages to a Chinese site, all of which are covered in the background paper. The first is the most convincing:

(a) It would give the Chinese an unwarrantable degree of leverage

over the communications of Hong Kong. In the event of a destabilisation of Chinese politics on a par with the Cultural Revolution, civil strife across the border could be used to disrupt Hong Kong's air communications. Should this occur, then a future semi-independent government in Guangdong could use Hong Kong air traffic as a pawn in any dispute with central authorities in Peking.

(b) Hong Kong would lose control over traffic rights, and could

not prevent the exclusion of airlines politically unacceptable to the Chinese, such as South African Airways.

(c) It would probably mean delay, as air services is a sticky

subject for negotiation with China and an early agreement that would allow completion by 1990 would seem unlikely. Recent experience is no comfort here.

(d) To mitigate the effects of (a) and (b), the Hong Kong Govern- ment would feel required to retain Kai Tak as a fall-back airport, and would therefore lose the enormous revenue that would be released on the redevelopment of the Kai Tak site.

CODE 18-77

CONFIDENTIAL

15.

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