TNAG-0208-FCO40-244-Discussions-about-extension-to-Kai-Tak-airport-1969 — Page 49

NOTHING TO BE WRITTEN IN THIS MARGIN

W(B)L 51-7406

purposes, including a grant of about £50,000 to Hong Kong in 1950. It was clear from the

discussions that a contribution of this nature

would be regarded as helpful in all the

circumstances.

7.

Finally, Moreton asked Cowperthwaite what

he would regard as a fair contribution to the

project from HMG given our present economic

circumstances and as a visible demonstration

of our self-interest. Cowperthwaite replied that waiving the outstanding repayments of the existing loan for Kai Tak (£1.4 million now

outstands with a further repayment of £200,000 due on 1 October) would be so regarded.

8. It seems to us that we now have the

possible ingredients of a satisfactory package deal and our Minister (Lord Shepherd) has

instructed that I should press ahead on the following basis :-

9.

(i) Remission of the outstanding balance

of the 1959 loan;

(ii) 50% grant from C.D. & W. funds

(iii)

towards the cost of the air traffic

control system; and, if possible,

a statement by ECGD that cover would be available for any part of the

contract awarded to British firms.

I am taking up (ii) and (iii) with the ODM and ECGD respectively and will send you

copies of my letters to them. I would be most grateful if you would give early consideration to (i); in view of Cowperthwaite's remarks it must be regarded, I think, as the lynch-pin in any acceptable

solution.

10. I am sending copy of this letter to Coe (Board of Trade) and Lucas (Treasury).