CONFIDENTIAL
Reference.
HK$ 127 billion at 1989 prices will be about right. But of course at the end of the day it will be vastly more due to inflation. The airport is now reckoned tocost about HK$ 40 billion: the whole of the airport and associated infrastructure excluding the port $ 100 billion. But a good proportion of this would have been done anyway in slower
time. The Central Wanchai and West Kowloon reclamations and Route 3 were already planned. One cannot strictly call those PADS related, but they figure in the $ 127 billion.
10.
There will be cost disbenefits in doing so much work all at the same time. But reclamation, for example is not labour intensive and apparently stone and cement are easily available from China or Hong Kong. The old arguments about losing business if Kai Tak is saturated are trotted out.
But what brought this home for me was the comment that if airlines with international routings cannot get satisfactory slots in Hong Kong, they will move somewhere else. Once lost, it is very difficult to get them back.
11.
The project is clearly putting a strain on HKG's finances, coupled as it is with a sharp slow down in the economy. Zero growth is the order of the day and non essential capital works are being postponed. But the Mass Transit railway was a very major undertaking and worked. At one stage it had debts of $26 billion. At current prices it must have cost $50 billion (I will get a figure from HKG because I think it would be a useful comparison point).
15 October 1990
M V Stone
CODE 18-77
cc: Miss Marsden
EELAIR/3 Mr Furness.