CONFIDENTIAL
not be liked by Association but can be defended. HK$ has not fallen that low since link changed in 1967. Treasury proposal of 26:1 clearly not acceptable. Link to UK salaries/pensions has no precedent or justification.
HKG prepared to accept "right to retire" if package acceptable. Not ideal, given desirability of continuity, but consider it manageable if helpful to Treasury. Will explain locally in context of localisation.
Will use Limited Compensation Scheme to full before 1997. Will reduce number covered by GCS to c.375 (present potential 815).
III. AIRPORT
Will announce on 19 November that we plan to go ahead with the airport platform contract, subject to Legco approval of funds.
Will make clear that we remain committed to the MOU; still want an overall agreement; and that the funds for this contract will come from our reserves and will involve no
obligations for the SAR.
Chinese will oppose and will try to characterise it as departing from MOU.
They have no case (indeed they proposed we go ahead in July in the absence of overall agreement). Believe we have the necessary support in Legco.
CONFIDENTIAL
opdk.18.11. FUTURE.kr