CONFIDENTIAL
52
161475
MDHIAN 2506
CONFIDENTIAL
FM DTI
TO IMMEDIATE BTC HONG KONG
TELNO OTTER 126
OF 29170OZ MAY 90
INFO PRIORITY TOKYO, PEKING
HKC 18212
འ༑་
3 1 MAY 1990
FOR HEAP FROM ROGERS PEP
HONG KONG AIRPORT PROJECT
WE DULY SAW THE JAIDO VISITORS ON 24 MAY. FCO AND ECGD WERE ALSO REPRESENTED. WE WERE GRATEFUL FOR YOUR CAND TOKYO'S)
ADVICE ON JAIDO.
2.
AFTER BRIEF DISCUSSION OF JAIDO'S ROLE, WE DISCUSSED THEIR INTEREST IN THE HONG KONG AIRPORT PROJECT IN SOME DETAIL. THEY REFERRED TO NUMEROUS PAST CONTACTS WITH THE HKG, AND SAID THAT THE HKG HAD KEENLY SOLICITED JAPANESE INVOLVEMENT. JAIDO WAS INDEED INTERESTED, BUT THE PROJECT WAS VERY LARGE AND VERY RISKY. HONG KONG WAS NOT USUALLY ELIGIBLE FOR JAIDO INVESTMENT, BUT THEY SAW IT AS PART OF CHINA POST 1997 - AND IN EFFECT INCREASINGLY SO BEFORE THEN. JAIDO WAS UNLIKELY ITSELF TO INVEST IN THE PROJECT BECAUSE OF ITS SMALL BUDGET AND THE ATTENDANT RISKS, BUT THEY ANTICIPATED ACTING AS A CATALYST. NOTHING WAS YET CERTAIN ABOUT JAPANESE PARTICIPATION IN FUTURE
CONSORTIA, AND JAIDO COULD PLAY A ROLE IN CO-ORDINATING THIS PRECISELY BECAUSE IT HAD NO DIRECT INTEREST AND BECAUSE IT WAS PART GOVERNMENT-OWNED CONE THIRD OF ITS CAPITAL COMES FROM GOVERNMENT, WITH THE REMAINDER FROM THE PRIVATE SECTOR). WERE SOMEWHAT DISMISSIVE OF MITI'S ROLE IN TERMS OF SUCH CO-ORDINATION: THEY DESCRIBED MITI AS QUOTE TOO TIMID QUOTE.AND, LATER, AS QUOTE VERY CONSERVATIVE QUOTE IN RELATION TO PROJECT FINANCING.
3.
THEY
JAPANESE COMPANIES' PRIME CONSIDERATION AT THIS STAGE WOULD
BE THE PROTECTION OF THEIR INVESTMENT IN HONG KONG: AND OF COURSE, IN ADDITION TO ANY FUTURE INVESTMENT IN THE AIRPORT, MANY JAPANESE COMPANIES HAD SUBSTANTIAL INVESTMENT IN HONG KONG ALREADY. THERE WAS A PARTICULAR CONCERN ABOUT THE RISKS ASSOCIATED WITH BOOT PROJECTS - NOTABLY THE LANTAU CROSSING. THE QUESTION WAS: WHO WOULD GUARANTEE THE FINANCE BEYOND 1997?
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