CONFIDENTIAL

HONG KONG: PORT AND AIRPORT DEVELOPMENT STRATEGY (PADS)

Speaking Note

- An important way in which Chinese Government could help to promote confidence in Hong Kong is by supporting PADS.

- Governor explained Hong Kong Government's plans when he

was here in January. Since then Hong Kong Government have

given the NCNA in Hong Kong further very detailed material, including copies of all the feasibility studies. Understand Chinese side is now evaluating this information.

Far from being a burden on the SAR Government, which I

understand is one of concerns of Chinese side, the new

airport project will make a tremendous contribution to Hong Kong's continued prosperity after 1997, as well as to that

of whole Pearl River Delta. Benefits of project will all

come after 1997.

Modern and efficient communications essential to Hong

Kong's continued success as international financial and

trading centre.

Quite clear that Hong Kong needs a new airport. Kai Tak is already extremely crowded and will reach saturation point by mid-1990s. Feasibility studies have shown that without a new international airport, economic loss to Hong Kong would

be HK$ 101 billion (at current prices) between 1996 and

2010. This is more than the cost of the new airport.

New airport at Shenzhen will not remove need for new international airport in Hong Kong. Shenzhen airport is only designed to handle 3.4 million passengers a year by

turn of century, whereas new Hong Kong airport will need to

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CONFIDENTIAL

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