CONFIDENTIAL
23
045123
MDHIAN 8956
CONFIDENTIAL
FM HONG KONG
TO DESKBY 01120OZ FCO
TELNO 960
OF 011112Z APRIL 92
нка 18217
INFO IMMEDIATE PEKING, UKREP JLG HONG KONG
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TOP COPY Q DIST?
YRTELNO 584: NEW AIRPORT: FUNDING ARRANGEMENTS
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OUR COMMENTS ON PARA 2 OF TUR ARE SERIATIM-
Pa
(A)
PARA 27
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LAST LINE DELETED AS SUGGESTED.
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(B) PARA 23B LAST SENTENCE DELETED (AS SUGGESTED). IN THE
SECOND SENTENCE WE THINK IT IS NECESSARY TO THE OBJECTIVE OF ENABLING THE AA TO MEET ITS DEBT SERVICE OBLIGATIONS. THE SECOND SENTENCE NOW READS 'SHOULD THERE BE ANY DELAY IN COMPLETING THE AIRPORT, IT WOULD BE NECESSARY FOR THE SURPLUS FROM KAI TAK TO FLOW TO THE AA IN ORDER TO ENABLE IT TO MEET ITS DEBT SERVICE OBLIGATIONS'.
(C) PARAS 29 AND 30 THE QUESTION OF HOW THE CHINESE PROVIDE THE COMFORT IN WRITING WHICH LENDERS MIGHT REQUIRE IS AN IMPORTANT BUT GENERAL ONE. RATHER THAN RAISE IT IN THE CONTEXT OF THE AIRPORT FUNDING ONLY WE PREFER TO DO SO SEPARATELY AS AN ISSUE RELATING TO ALL ACP PROJECTS INVOLVING BORROWING. IT SEEMS WISER ALSO NOT TO RAISE THE ISSUE UNTIL YOU AND WE HAVE AGREED ON PRECISELY WHAT IT IT WE WISH TO ACHIEVE.
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(D) PARA 30 WE ARE NOT SURE WHAT YOU HAVE IN MIND. WE HAVE REVISED THE SECOND AND THIRD SENTENCES TO READ 'THIS WILL ENABLE THE AA TO GAIN OPERATIONAL EXPERIENCE AND ESTABLISH A RECORD OF SUCCESSFUL AIRPORT MANAGEMENT. IT WILL ALSO FACILITATE A SMOOTH TRANSFER OF AIRPORT OPERATIONS FROM KAI TAK TO CHEK LAP KOK'.
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(E) PARAS 31 AND 34 IT IS NOT POSSIBLE TO FORESEE IN WHAT YEARS CALLABLE EQUITY WILL BE CALLED. WE THINK PARA 34 CONTAINS THE BEST CASE WE HAVE TO DEFEND OUR CONTENTION THAT IT IS HIGHLY UNLIKELY TO BE CALLED BEYOND MID-1997.
2. ON PARA 3 OF TUR, WE ARE INTENDING TO AERONAUTICAL CHARGES WITH DTP ON 13 AND
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CONFIDENTIAL
SEND A TEAM TO DISCUSS 14 APRIL. THERE HAS SO