Our reference: AMP 226/217/02 Your reference: 2-FD.24/643/01
CONFIDENTIAL
MINISTRY OF OVERSEAS DEVELOPMENT
Eland House, Stag Place, London S.W.1
Telegrams: Ministrant, London, Telcx
RECE Telephone: 01-834-2377
ARCH
APA Hood
د
[ MUA10/345/1
R&R.
९
85 April, 1969
Would you please refer to your letter of 28th March to W. S. Carter on the question of a loan of about £óm. to the Hong Kong Government for the development of Kai Tak Airport. In paragraph 3 you suggest that, on the assumption that the Board of Trade are able to make out a case which would justify H.M.G. providing some help to Hong Kong on civil aviation grounds, O.D.M. would be justified in providing some assistance, if not for the development of the airport, then at least for some of the colony's pressing social needs such as housing, water supplies and education, if these would suffer if Hong Kong itself had to finance the airport extension. You go on to say that the most that you would be prepared to consider would be a loan of £3m. spread over the four years 1969/73 and, in paragraph 4 of your letter, you suggest that this sum can be found from savings within the annual aid ceiling.
2. With regard to the first point, I must emphasise that 0.D.M. would not be prepared to provide capital aid to Hong Kong for the purposes you suggest in their present economic circumstances. We are not concerned with the develop- mental value or otherwise of the airport extension as we can see no justification whatever for providing capital aid to Hong Kong at the expense of other more needy countries in view of the buoyant state of the colony's economy. Furthermore, it does not appear to us, from what is stated in Hong Kong's telegram No. 227 of 15th March to the F.C.0., that there will be any question of Hong Kong's social needs sufforing as a result of the airport extension since they would clearly not contemplate the £13.7m. undertaking themselves. Indeed, they have made it clear that they would not regard it as a major calamity if the airport were not extended as proposed, as they are`. satisfied that, if an extension were necessary, a smaller extension would serve their needs. In our view, any expenditure for the benefit of British civil aviation should be met from the appropriate spending head, which is not the aid programme.
3.
At the meeting which he attended in your room on 5th March, Knowles under- took to let you and Carter know our views regarding the possibility of either the Colonial Development Corporation or the Asian Development Bank assisting in 'the provision of finance for this project.
4. We cannot agree that the Corporation should be regarded as a likely source of funds, for the same reasons that we ourselves would not be prepared to consider providing assistance to Hong Kong for this project. In our view there could be no justification for encouraging the C.D.C. to invest a large sum of money in this project in Hong Kong at the expense of other countries in which the Corporation operates, whose development needs are far greater. Although
/we
R. H. J. STEEL, ESQ.,
TREASURY CHAMBERS, GREAT GEORGE STREET, LONDON, S.W.1.
IN
CONFIDENTIAL
TRY No.51 -3 JUN 1969
HKX 21/11
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