TNAG-0210-FCO40-246-Briefs-and-background-notes-for-visit-of-Deputy-Under-Secret-1969 — Page 90

CONFIDENTIAL

Board of Trade votes do not run to sums of the order

required.

11.

After discussions in Hong Kong last June, Lord Shepherd instructed that we should press for the following package deal in favour of Hong Kong:

12.

(i) Remission of the outstanding balance of an

interest free loan made to Hong Kong in 1959

for airport development.

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

of the air traffic control system; and if possible,

(iii)

A statement by E.C.G.D. that cover would be

available for any part of the contract awarded

to British firms.

We have attempted to negotiate the elements of this

package deal with the Departments concerned. So far the

results have not been promising.

(a) The Treasury argue that in pressing for

remission of the outstanding 1959 loan we are

asking for a grant to a territory with buoyant

revenue at a time when we are severely restricted

in the amount of assistance we can offer less

wealthy countries than Hong Kong, They point

out that we are asking them to forego the present annual repayments by Hong Kong at a time when we are publicly doing everything possible to

reduce overseas expenditure.

(b) O.D.M. which has control of C.D.&. grants

are adamant that they are unable to agree to the grant of aid funds to Hong Kong, in the circumstances of the Colony's present flourishing economy when aid could only be given

CONFIDENTIAL

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