CONFIDENTIAL
ANNEX.
A.
Cross Harbour Tunnel
J
This is a £16
17 million project linking Hong Kong Island and Kowloon for which Cosains are the likely contractors. The partial stoppages in the ferry companies last May showod how crippling a complete breakdown in those services could be, The project would involve a £10 million Bank loan. E.C.G.D. has agreed to give a guarantee for this loan provided that it is given a covering guarantee. Wo have proposed that the Hong Kong Government (which is taking a share in the project) should give this covering guarantee, but that we would provido half of
Certain conditions are any sum involved if the guaranteo is called. involved in this proposition, some of which may be difficult for the Hong Kong Government to accept. These are now under discussion.
B*
Development of Kai Tak Airport
Extensions to the runway, aprons, terminal buildings, etc., to Kai Tak Airport must soon be mado if the airport is to be able to handle the greatly increasing traffic and is to accommodate the new generation of large and supersonic aircraft. A tentativo plan involving expenditure of about £10 million has been proparod. Our control of cabotage rights at Hong Kong arc of the groatost value to B.O.A.C. and Hong Kong is one of our most important bargaining counters in negotiations for air traffic rights throughout the world. Any diminution of its importance would have serious effects on British aviation and B.0.A.C. in particular. For these roasons Hong Kong has proposed that H.M.G. might sharo in the development of the airport, on present tentative proposals that share would be a grant of sono 3.25 million towards the total cost. Failing sono assistance on those lines, it would be oxtromoly difficult for Hong Kong to meet the total cost of this project without unacceptable reductions on other projects of greater importance to the community as a whole e.g. in the fiold of social services. The Airport proposals are shortly to be
put to the Board of Trade.
C. Joint Educational Projects: Tochnical Training
A gesture in the educational field would be timely and well received. There is a great nood for further facilities for technical training for industry in Hong Kong. Education absorbs ono-sixth of all government oxponditure and the amount spent on this service cannot be increased except at the expense of other services. Consideration has already been given to the possibility of a joint project within the Colombo Plan, but funds would not bo available under the Plan for the kind of joint participation
/wo
CONFIDENTIAL
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