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TO:
PS/MINISTER FOR TRADE
FROM:
FRANK WHEELER
PEP1
Room 250
1 Victoria Street
215 5454
8th July 1987
CC Mr Dell
Mr Benjamin (or)
Mr Hall OT4
Mr Finch PEP1
-
CC.
Mr Hum Hong Kong Dept - FCO Mr Holloway, British Trade
Commissioner, Hong Kong
HONG KONG: MAJOR INFRASTRUCTURE PROJECT
In connection with the letter which Mr Clark is proposing to write to the Governor of Hong Kong, the Minister may wish to know
of a long conversation I had today with Mr Piers Jacobs, Financial Secretary to the Hong Kong Government and as such a key player in the proposed project. Mr Jacobs started off by being distinctly negative about Gordon Wu's "grandiose ideas", but, warming to his subject, ended up by taking a positive attitude with understandable reservations. His main points were:-
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(a) the project was too large for any one developer and there probably should in any case be Hong Kong Government participation. I told Mr Jacobs that Wu had said candidly that he was prepared to take a slice of the action. Hong Kong Government guarantees, if available, would undoubtedly be welcome;
(b)
the plans for the port development were not entirely consistent with the Government's own schemes and would take up valuable water space. Wu claims that it is shallow water and unusable;
(c) there is no immediate need for a new airport.. Investment in Kai Tak was enormous and it was essential to squeeze this to the limit. HKG had commissioned a study of traffic needs and alternative sites which would be completed by Autumn 1988. Wu's plans for land reclamation were questionable. It was doubtful whether there was a need for 400,000 additional housing units, which might in any case be too close to the proposed airport. HK Airport ought in the longer term to be privatised and not run by the Government. I suggested that the building of a new airport gave an admirable pretext for this change;
(d) the agreement and financial participation of the PRC Government was essential. I commented that Wu had already received very positive signs at the highest level. was equally insistent that PRC approval was
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