CONFIDENTIAL
Redacted under FOI Exemption S 27 (1)
033642
MDHIA 719
PROGRAMME, WE WOULD MAKE AS GREAT A VIRTUE AS POSSIBLE OF THIS NECESSITY.
11. ONE OTHER POSSIBLE QUOTE CONCESSION UNQUOTE WOULD BE THE APPOINTMENT TO THE AIRPORT AUTHORITY OF SOMEBODY WITH CLEAR CHINESE LINKS, EG A MEMBER OF ONE OF THE MAINLAND BANKS OR FIRMS HERE. (WE ALREADY HAVE ONE MEMBER OF THE PROVISIONAL AUTHORITY WHO HAS CLOSE AND FRIENDLY LINKS WITH CHINA: THIS WOULD TAKE THE PROCESS ONE STEP FURTHER).
12. ONE FINAL POINT THAT WE WILL ALSO NEED TO EXPLORE IN MORE DETAIL WITH THE CHINESE IS THEIR ATTITUDE TO ANY LOANS. AS YOU KNOW, WE HAVE NOT DECIDED ON OUR APPROACH SO FAR. THERE ARE A VARIETY OF OPTIONS RANGING FROM THE LONG TERM FINANCING, USED BY EG THE MTR, TO SHORT TERM GOVERNMENT BONDS REPAYABLE BEFORE 1997. THE MIX WE USE WILL DEPEND ON THE DETAILED FINANCIAL CONSULTANCY WORK NOW IN PROGRESS. SHOULD WE GO FOR SOME MIX OF LOAN
FINANCING,
VERY CAREFUL EXPLANATION
OF THE BENEFITS WILL BE NECESSARY AS THAT THE CHINESE WILL NEED TO BE CONVINCED THAT ANY HKG LOANS WILL NOT BE A LIABILITY FOR THE CENTRAL PEOPLE'S GOVERNMENT. AT THE END OF THE DAY, CONVINCING THE CHINESE ON THE FINANCIAL ARRANGEMENTS IS LIKELY TO BE THE KEY TO WINNING THEIR SUPPORT.
WILSON
YYYY
MAIN
22
LIMITED
HKD
FED
NNNN
DISTRIBUTION
122
22
PS/LORD CAITHNESS
MR MCLAREN
MR BURNS
PAGE
CONFIDENTIAL