_HKB 180/1
25 NOV 1993
A.
10
Mr Rickett HKD
Ricketts
der Whitney,
Advice fl
1211 من
FROM:
APS/Mr Goodlad
DATE:
16 November 1993
HONG KONG PROVISIONAL AIRPORT AUTHORITY (HKPAA)
1.
I attach a copy of Adrian Swire's letter of 11 November to Mr Goodlad which enclosed another from Peter Sutch, Swire Group of 29 October to the Governor Hong Kong. The letter to the Governor voices the Swire Group's concern over the HKPAA's intention to attach licenses granted at Chep Lap Kok for the provision of airport services.
2.
Mr Goodlad wishes to send a letter of acknowledgement but has asked whether we should take any action on Mr Sutch's letter. The Minister would be grateful for advice.
Trevor Adams
Minitr
JOHN SWIRE & SONS LTD
Swire House
59 Buckingham Gate
London SWIE 6AJ
Registered Office
Registered Number 133143 ENGLAND
From Sir Adrian Swire
Chairman
Lett 1
achohadget M.
am ملقا س سلسلة
action? As
Telegrams:
TEMSELOAF LONDON SWI
Telephone: 071-834 7717
Fax: 071-630 0353 Teler: 888800
2111
Answer back:
SWIRE G
The Rt. Hon. Alastair Goodlad, MP,
Minister of State,
Foreign & Commonwealth Office, King Charles Street,
London, SW1A 2AL.
11th November, 1993.
_HKB 180/1
2 NOV 1993
Dear Alastair,
H.K. Provisional Airport Authority
I promised, when we sat next to each other at the TDC Dinner, to send you a copy of Peter Sutch's letter of October 29th to Chris Patten.
This is now attached.
Enc.
Yours sincerely,
Aduai
Suné
من
The Rt. Hon. Christopher Patten, His Excellency The Governor,
Government House,
Upper Albert Road, Hong Kong.
29th October 1993
Dear Mr Patten,
I am writing to follow up on the brief discussion Sir Adrian and I had with you recently regarding the conditions which the P.A.A. (referred to hereafter as the "Authority") are indicating they intend to attach to licences granted at Chek Lap Kok for the provision of services such as catering, cargo handling, fuel supply and engineering.
There is very grave concern among Swire Group subsidiary and associated companies interested in providing these services that the terms being proposed will make the setting up of high-quality, soundly-financed businesses, so vital if Hong Kong is to maximize on the potential of the new airport, nigh impossible. These concerns are, we know, shared by a host of other potential investors, and indeed many in the banking community. Schroders, for example, have gone so far as to advise their client, HACTL, that "there is a great deal of uncertainty and ambiguity which will make the projects (HACTL's proposed terminai) very difficult, if not impossible, for potential lending banks and investors to assess. Consequently, we do not believe that it will be possible to raise debt finance against the security of the project cashflows with the licence terms as they are currently drafted.".
Kai Tak has airline related services that are generally regarded as being amongst the very best in the world. Significantly they have successfully maintained service standards during a long period of rapid airport expansion. The continuation of these world-class industries is being undermined by an extremely high fee structure and the imposition of a straight-jacket regulatory environment which removes control and responsibility for each business from its shareholders. Clearly too the input of the prospective licensees into the Authority over many, many months has been largely ignored in drafting the proposed licence terms.
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