CODE 18-77
Mr Paul
CONFIDENTIAL
File
Reference.
170,
HKC 182 12
RECEIVED IN D
16 OCT 1990
SKOP
VISIT TO HONG KONG: 8-13 OCTOBER: PADS
1. I had several useful meetings with persons involved in the port; the airport; road links and overall project coordination. I was generally impressed with what I saw.
2. A huge amount of work has been done and the set up for
PADS already runs to the size of a large Department. They certainly know what they are doing on the ground. I do not doubt that they can manage the projects properly. I attach come aceful summaries of documents given to 're cliners ad consultancies let or about to be let.
3.
The problem over financing I believe is largely one of poor PR and typical HKG secrecy: dont tell anyone anyting unless you have to. It is apparently immensely difficult to say with precision how much a project like PADS will cost. The variations could, legitimately, be plus or minus 30%. But HKG clearly do have a good idea of where the money will come from: they simply have not told anyone yet. The Secretary to the Treasury is now beavering away and a financing report is due to be finalised before Christmas.
The package will clearly be a mixture of Government and corporation bonds, draw down of fiscal reserves and private sector participation. The worst years for expenditure will
be 1993,4,5. But there will then be revenue from sales of
bits of the reclamation.
4.
During my session with the Governor, he was clearly concerned at our reaction to the change in decision on the bridge contract. I explained that we felt starved of
information and were thus starting to wonder. I also reminded him of the trouble the FCO had got into over the Gibraltar Pension Fund to illustrate how lateral thinking
might be working. He took this on board and I think we
EELAIR/1
CONFIDENTIAL