CODE 18-77

To:

MR FINCH PEP1B

From:

FRANK WHEELER

PEP1

V/252

215 5454

25 March 1987

Reference...

175/3/20

но нут

cc Mr Benjamin

лубли

Alta

214 PA 175/3

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SHENZHEN AIRPORT, PRC: HALCROW, TRAFALGAR HOUSE AND PLESSEY

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Mr Hillier, a Director of Halcrow came to see me yesterday together with representatives of the consultants, Llewelyn-Davies

following the exchange of letters we had last month when Halcrow expressed disappointment that we should have offered OPF support to Ove Arup for the Gordon Wu sponsored Hong Kong airport project. when simultaneously Halcrow and, I now find, Trafalgar House, Plessey and Kleinwort Benson are working on Shenzhen.

2

As we know, American consultants Parson Lockheed undertook a feasibility study of Shenzhen following which Llewelyn-Davies have been making a study, paid for by the ODA, on economic develop- ment and environmental aspects. The Halcrow group have been working up a proposition which they have put to the Shenzhen authorities whereby Shenzhen would become the regional international airport linked by a fast rail line to Kowloon. Under the scheme Kai Tek would be shut down releasing valuable land for redevelopment and Lantau port would be exploited. It would be a BOOT project in which Trafalgar House are prepared to invest. Although Lockheed might be thought to have the inside track, Mr Hillier assured me that this was not so they had made themselves unpopular by withholding essential details of their study from the Chinese - and the Halcrow group in moving the accent away from a domestic airport to an international regional airport and by promoting the BOOT concept had found favour with the Chinese. Mr Hillier was going to China this week and hoped to get some sort of letter of intent from the Mayor of Shenzhen. He recognised that this was but the first step and that the Hong Kong Government would have to make up its mind about what amounted to competitive projects as there would be no demand for two international airports (and Macau was also in the running) and finally central PRC Government approval would be needed. Mr Hillier asked whether HMG could lend its support and if possible consider OPF assistance.

3

I outlined some of the considerations:

(a) The Shenzhen airport project had been going for some time and it was likely to be a very long haul:

(b) It was difficult enough dealing with the Chinese authorities without the added complication of a possible conflict of interest between the PRC and Hong Kong Government.

1.

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