CONFIDENTIAL
28
Pa
MsMgroJey Mr-stone 8/6 W/%
Jo Paul
Me Burks KAY / M
Mr
FROM:
A R Paul
Hong Kong Department
DATE:
7 June 1990
HKC OG 2
CC:
Mr McLaren
CCEIVE!
Y
HONG KONG: ROYAL NAVAL PRESENCE AFLOAT
13 JUN 1990
OFFICE
14/6
1. You asked me where matters now stood on this.
2. We have spoken to the relevant part of the Hong Kong
Government. They have just finalised their response to the
MOD, which they expect to issue in a few days. It will
explain why Hong Kong cannot accept the MOD's proposal for
dealing with the financing problem. But it will put forward
alternative proposals designed to be helpful. It will, as I
understand it, focus on Hong Kong paying more initially, and
getting a larger share of the proceeds of the sale of stores
later.
3.
It is difficult to judge whether this is likely to
resolve this matter. But we shall be receiving a copy of
the Hong Kong Government's response. At this point, I fear we are going to have to take a rather closer interest in the negotiations than hitherto. This could have the makings of
a major row. But with careful handling, this should be
avoidable.
ARPanc
MOPACA/1
A R Paul
CONFIDENTIAL