CONFIDENTIAL AND PERSONAL

20 December 1991

N J Cox Esq

Hong Kong Department

FCO

I pe plw e

faxed

Office of the

186

British Senior Representative

advance copy 1

MiVAM

87:

14/1

Sino-British Joint Liaison Group

Dear Nigel,

AIRPORT PROJECT: LANTAU FIXED CROSSING

Thank you for your telno 107 about the Lantau Fixed

Crossing. Although you will by now have seen Hong Kong telnos 3887 and 3888, I doubt whether these will have provided you with the information you require.

I have spoken to various people in the Hong Kong Government about the tenders. The experts are examining the bulky tender documents and have come to no firm conclusions yet. But, according to the Director of NAPCO, it does not seem that the prices in the tenders differ greatly from what had been expected. They should not create any great problem with the Chinese. Of much greater concern, however, is the fact that all the tenderers are seeking guarantees that the HKSAR government will honour the contracts after 1997. It seems that the guarantees required are quite explicit and would involve "comfort" of a firm contractual nature. This opens up the whole tricky question of the legal successor to the HKG and who acts in loco parentis for the unborn Hong Kong SAR.

The Hong Kong Government are considering the way forward and will no doubt be telegraphing in due course. In the meantime please treat this letter as personal.

Yours ever,

Alan

A R Paul

CONFIDENTIAL AND PERSONAL

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