CONFIDENTIAL
15
021112
MDHIAN 7962
CONFIDENTIAL
FM HONG KONG
TO IMMEDIATE F C O
TELNO 879
OF 24105OZ MARCH 92
Po
HKA 18217
.3
2413
INFO IMMEDIATE PEKING, UKREP JLG HONG KONG
TOP COPY Q DIST?
13
YOUR TELNO 538:
1.
FINANCIAL ASPECTS OF THE AIRPORT CORE PROGRAMME
THANK YOU FOR YOUR TUR. WE WOULD LIKE TO RESPOND BRIEFLY TO THE POINTS RAISED SERIATIM.
2.
YOUR PARA 2:
FOLLOWING EXCO'S APPROVAL THIS MORNING, WE ARE DRAFTING A PAPER FOR THE AIRPORT COMMITTEE ON THE FINANCIAL ARRANGEMENTS FOR THE PROVISIONAL AIRPORT AUTHORITY. CA COPY OF THE RELEVANT EXCO PAPER IS BEING FAXED TO YOU, AND WE WILL LET YOU HAVE THE DRAFT AC PAPER ONCE AVAILABLE.) THE PRESENT PLAN IS TO HAND THE OVERALL COST PAPER AND A CONSULTATIVE DOCUMENT ON THE AIRPORT AUTHORITY BILL TO THE CHINESE SIDE ON 27 MARCH. THE PAPER ON THE PAA FINANCIAL ARRANGEMENTS WILL NOT BE READY UNTIL 30 MARCH, AT THE EARLIEST.
3. YOU ASKED ABOUT CREDIT AGENCY (ECA) REACTION TO PROJECTS UNDER TENDER. FOR THE TSING MA BRIDGE CONTRACT, ALL BIDS INCLUDED OFFERS OF FINANCE, AND ALL OFFERS OF FINANCE INCLUDED EXPORT CREDITS EXTENDING BEYOND 1997. THE PROCESS OF EXAMINING PROPOSALS FROM TENDERERS HAS INCREASED THE ECAS' KNOWLEDGE OF HONG KONG. EARLY INDICATIONS ARE THAT THE MORE THEY LEARN (AND PARTICULARLY, THE MORE THEY LEARN FROM HKG DIRECTLY AND FROM THE U.K. MISSIONS), THE MORE COMFORTABLE THEY ARE BECOMING WITH POST-1997 HONG KONG RISK. WE ARE REPORTING SEPARATELY ON A RECENT VISIT TO HONG KONG BY THE PRESIDENT OF U.S. EXIM BANK, WHICH WENT WELL.
4. THE REASON FOR HANDING OVER THE OVERALL COST PAPER TO THE CHINESE SOON AFTER THE EXCO DISCUSSION (YOUR PARA 3), IS TO MINIMISE THE TIME FOR DESTRUCTIVE LEAKS TO THE PRESS, TO WHICH THE CHINESE REACT BADLY. THE OVERALL COST IS INDEED NOT A SUBJECT OF CONSULTATION, BUT THE CHINESE CONSIDER IT A PRE-REQUISITE FOR THEIR DETAILED CONSIDERATION OF THE PROPOSED FINANCIAL ARRANGEMENTS FOR THE AA AND MTRC. WE NOW INTEND TO PASS THE PAPER TO LEGCO AND THE AIRPORT CONSULTATIVE COMMITTEE A WEEK AFTER WE HAND IT TO THE CHINESE, I.E. 2 APRIL, AFTER THE VOTE ON THE APPROPRIATIONS BILL.
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