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financial muscle and some adjustment in the control of public companies was inevitable. It may even prove
beneficial.
13. When the decision was taken to build the Mass Transit Railway (MTR) in 1972 it symbolised confidence in the colony's future and determination to improve quality of life. In 1980, the first section of 15.6 kilometres was completed; the second of 10.5 kilometres was under full construction; and a decision was taken to build the third of 13.2 kilometres along the north shore of Hong Kong Island. The opening of the first section in February by HRH Princess Alexandra was a particularly happy event and was attended by a galaxy of international suppliers and bankers.
14. Work is also in full swing on double-tracking and electrifying the Kowloon-Canton Railway as far as the border. When completed in 82/83, it will have an interchange with the MTR and the two linked systems will provide wider transport coverage.
Hong Kong/United Kingdom Relations
15.
In the course of the year agreement was reached with the Ministry of Defence on a new Defence Costs Agreement and to increase the Garrison from 4 to 5 major units. The costing conventions of the new agreement involved doubling Hong Kong's contribution. It was satisfactory that Unofficials, the media, and the public took it in their stride without any of the shrill recriminations that would have been inevitable 5 or 6 years ago. Recognition of the fine performance of the Garrison against illegal immigrants certainly helped, as did also the quiet and un-publicised professionalism with which the highly intricate discussions were conducted.
16.
Though the relationship is far better than I have ever known it, there was a disturbing outburst of anger against the United Kingdom in March over a combination of the White Paper on the New Nationality Bill, the increase in university fees for Hong Kong students (but not for EEC or some EEC colony students), and the Civil Aviation Authority's (CAA) grant of a licence to British Caledonian to compete with British Airways on the London/Hong Kong cabotage route but not to Cathay Pacific Airways (CPA), the local Hong Kong carrier. The combination of what appeared to be
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