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premium (or virtually fis
$,000) in the unlikely event that the land is recovered. Hong Kong would argue that it also offers protection to the grantee in that it specifies how compensation for any buildings on the site would be assessed (inadequate as we see it). Buildings and Land have also pointed out, when we suggested removing the clause entirely, that under the existing Crown Lands Resumption Ordinance the Hong Kong Administration could recover ownership of the land independently of SC 14. (This may be an argument for retaining SC 14 in a form more acceptable to us rather than seeking to ditch it).
6.
We have to decide whether we are content to sign up to the Hong Kong side's latest offering, trusting that the situation will never arise, or that if it does that HMG will be adequately compensated by the Hong Kong side or by relying on international law to ensure a fair settlement. Although we
have no reason to doubt the probity of the future SAR administration, the present differences with China make it imprudent to take on trust terms for the PTG which we are
(by OED) advised/stop short of giving HMG adequate financial protection and which constitute by FCO standards a most unusual basis upon which to proceed with an important and costly
development. There is a case for going back to the Hong Kong side at a higher level essentially this would mean taking it up with the Governor to put our concerns and suggestions for approximating our ideal solutions. Should we decide to take this course, we will need to be clear what we want.
7. OED would like to see a combination of any protection
which international law might have to offer (already on offer from Hong Kong) with a proper compensation provision. Legal Advisers have commented that, while the latest offering from the Hong Kong side is a marked improvement on what was previously on the table, an improved compensation provision
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