TNAG-0275-FCO40-311-Development-of-Kai-Tak-airport-at-Hong-Kong-1970 — Page 49

CONFIDENTIAL

sources have been explored without result.

3. On financial grounds Hong Kong's case for seeking assistance

is weak. Government reserves at about 280 million are consider-

able (although there will be many heavy calls on these in the

years ahead); Government revenue continues to be buoyant,

throwing up a steady succession of budget surpluses.

The case

for assistance must rest largely on political grounds and on

meeting the strong public feeling in Hong Kong that the UK has

an obligation to share in the cost of maintaining an airport from

which British aviation interests derive substantial benefit and

where the traffic rights are controlled by HMG in those interests.

4. The political casc also rests on the need to counteract the

feeling in Hong Kong that has been growing for some years now that

Britain regards the Colony as a nuisance and an impediment

(sce Brief No. 13A), This requires the occasional gesture which

demonstrates our concern for and confidence in Hong Kong.

Assistance for this project would be a most suitable and appropriate

gesture, particularly since we have such a strong interest of our

owm in it. Our failure to contribute to it can be expected to

increase pressure from Hong Kong for a greater say in the control

of traffic rights, Hong Kong's argument being that if it is to

shoulder the burden of financing the airport it must be allowed

to maximise use and revenues. The more aggressive of the

unofficial numbers can be expected to make much of this latter

point. The less aggressive are likely to avoid it, resting

their case on the need to show our confidence in the future of

Hong Kong.

CONFIDENTIAL

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