New Airport
22. In October 1989 the then Governor of Hong Kong announced
plans for the development of a new international airport at
Chek Lap Kok to replace the existing one at Kai Tak. During 1989 and 1990 it became clear that the private sector wanted
to see firm support from China for the project before they would commit substantial funds whose repayment period would
extend well beyond 1997. After protracted discussions, the
British and Chinese Prime Ministers signed a Memorandum of
Understanding (MOU) on the airport and related infrastructure
projects in Peking in September 1991.
23. The key points of the MOU are that China undertook to
support the construction of the new airport; adopt a positive attitude to necessary and reasonable borrowing by the Hong Kong Government; and indicate to potential investors that
contracts will be honoured after 1997. The Hong Kong Government undertook to complete as many as possible of the
airport core projects before 30 June 1997; to consult the
Chinese side on borrowing of over HK$5 billion with maturities
after 1997; and to plan their finances with the firm objective
of leaving not less than HK$25 billion in their fiscal
reserves in 1997.
24. To facilitate cooperation, the MOU established an
Airport Committee under the JLG to act as a forum for
consultation on the granting of major airport contracts and franchises. The MOU was acclaimed, both in Hong Kong and internationally, as a good and workable arrangement and gave a major boost to confidence. Since then, the Hong Kong Government have briefed the Airport Committee extensively on
the progress of the project, and have put forward two alternative financing packages for the Airport Authority and the Mass Transit Railway Corporation (which will build the
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